Farming is ‘star performer’ for estate incomes

Average incomes from rural estates have increased by 8.3% since last year to £178/acre, according to the 2009 Savills estate benchmarking survey.

The survey of 200 estates, representing one million acres across the UK, recorded increases across all income streams, but agriculture was the “star performer”.

In 2009, agriculture contributed 36% of gross income, a level last seen in 2005.

The contribution from residential assets fell slightly to 36%, while the amount of income from commercial assets fell below 15% for the first time in two years.

Within the farming sector, Agricultural Holdings Act rents increased 16% across all estates to an average of £185/ha (£75/acre), with the greatest rise in the arable sector where average AHA rents increased 20% to £205/ha. Farm Business Tenancy rents were up slightly to £234/ha (£95/acre) and continued to gain a bigger proportion of the let agricultural area.

For the first time in 10 years, average in-hand farm incomes exceeded both AHA and FBT rents to contribute £272/ha, however Savills acknowledged that position was unlikely to be maintained as profitability came under pressure from falling commodity prices and higher input costs.

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