Tight supply has been a significant feature of the north-east farmland market over the past 12 months.
The number of publicly marketed acres was down by one-quarter last year compared with 2016. And at the time of writing, no land has been advertised for sale in the North East this year.
It has served to keep prices firm and buyers eager, but some agents suggest the prospect of direct support payments being phased out may bring a handful of let and in-hand farms to the market this year.
What’s on the market?
Sunny Bank Farm is a 295-acre diversified stock unit with 350 ewes, but has historically carried a suckler herd. Based in the heart of the North Pennines near Bishop Auckland in County Durham, the land is ring-fenced with a central yard hosting modern and traditional buildings, farmhouse and holiday cottage. Savills has set a £1m guide price as a whole, but it could sell in up to three lots.
What sold well?
Prospect Hill Farm at Corbridge, Northumberland, is a tenanted holding of 285 acres that sold well in excess of its £1m guide. Interest came from farmers, rollover money and investors.
H&H Land & Property said the location of the grassland farm, which is let on a first succession AHA tenancy, helped to attract strong interest.
The market was unusually quiet in 2017. Northumberland particularly so, with fewer than 3,000 acres publicly marketed, down 40% on 2015. County Durham mirrored this trend with only a little over 1,000 acres marketed.
The buyer profile continues to be farmer led. The wider appetite for good-quality land remains strong, with bare land sales underpinned by local farmers looking to expand. More marginal farms or those in less-desirable areas have met more muted demand and sales have been protracted in some instances.
The potential continuation of BPS payments until 2024 provides more certainty in the short term, although we still anticipate a somewhat limited supply in 2018. That should help support values close to current levels and as ever, neighbours will continue to look seriously at opportunities to expand.
William Douglas, associate director, Savills
There will be a number of farming families and landowners in Northumberland considering their succession plans in view of Brexit. This could lead to more farms coming on to the market or to let. We feel supply is going to be difficult to predict for the next year or two.
We understand that high street banks continue to be willing to lend capital for the purchase of farmland. The generous tax regime in relation to active farmers and farmland continues to drive demand.
The desirability for existing operators to expand is also something we do not see fading anytime soon. We haven’t seen any effect of Brexit on land prices to date and time will tell what role it will play.
Tim Sedgewick, associate, H&H Land & Property