The number of acres brought to the market in north-east England in the first three-quarters of 2021 was down 66% on the previous year, according to Strutt & Parker’s Farmland Database.
This period is traditionally when the vast majority of land and farms are launched, meaning it is unlikely much more will become available as the year progresses.
However, other agents have reported an improvement in supply on 2020, which was unusually stifled by the effects of the Covid-19 pandemic.
Average values have also increased, by 5% for arable land and a more significant 27% for pasture.
Values picking up
Sam Johnson, associate partner, Carter Jonas
The imbalance between supply and demand continues to prevail for the North East.
Over the past six months, average values have picked up a bit across the region.
Our most recent quarterly land market update estimated that the average price for arable land is £7,000/acre, £5,500/acre for pasture, £2,000/acre for hill ground and £11,750/acre for lifestyle.
Properties that offer a diversified income stream remain keenly contested as the market looks to a period beyond the Basic Payment Scheme (BPS).
However, the strong commodity prices experienced over the past year have meant that the looming reductions of BPS monies are further from the mind of farming businesses than they may have been otherwise.
There are signs that the concept of natural capital is beginning to manifest itself, as we see an increase in demand of more marginal land in both the uplands and lowlands, with the resulting impact of a rise in values.
Values of land capable of afforestation have also increased, underpinned by attractive tree-planting grants.
Huge lifestyle interest
Harry Morshead, associate, youngsRPS
While figures suggest that the number of properties advertised in 2021 may be up on 2020, 2020 was 65% down on 2019.
The North East saw little public transactional activity, but huge demand and high values paid, with arable land exceeding £10,000/acre and grazing values soaring.
The lifestyle market has increased dramatically. Woodland and land for planting is in huge demand and the traditional investment market now includes green investors seeking to capitalise on new natural capital revenue streams.
The rollover buyer remains a constant and may increase, with government policies looking to increase development. The traditional farmer buyer remains, with price and location being a key driver.
Unknowns remain with government policies on both subsidies and potential inheritance tax implications, alongside concerns regarding input costs.
Nevertheless, the outlook for the farmland market should be seen as extremely positive; those wishing to sell shouldn’t be fearful of the uncertainties portrayed by other markets as the supply and demand equation is heavily weighted to the vendor.
What’s on the market?
Near Tow Law in County Durham, Savills is selling the 271-acre Low Houselop Farm, with a guide price of £2m.
The upland livestock farm comes with a three-bedroom house, a large range of buildings and grazing rights on the adjoining Sand Edge Common.
Additional lowland grazing and a moorland allotment may be available by separate negotiation.
What’s on the market?
Horseholme Farm, near Gilsland on the border of Cumbria and Northumberland, is on the market with youngsRPS.
The upland farm has 773 acres, a four-bedroom house and a fully equipped steading with both modern and traditional buildings.
It is available as a whole guided at £1.3m or in two lots.