Sales in the South East started 2021 relatively slowly while the UK was in lockdown. The marketplace became more active during the summer months and into the second half of the year, say agents.
The supply of land on the open market has remained tight in the region, with strong competition reported for both premium and marginal land.
Prime arable land values increased by 3.6% year-on-year in 2021 to £9,646/acre, according to Savills’ data. Average prices across all land types rose by 2.6% on the previous year.
See also: Land in your area 2021: East of England
Buyer interest prevails
The 2021 farmland market in the South East, in line with much of the rest of the country, started slowly due to Covid-19 lockdowns and a late spring, but activity increased considerably in the second half of the year.
The number of farms marketed was actually back up to 2019 levels, after a reduced supply in 2020, although the acreage on offer was still low compared with 2017 and 2018 levels.
Demand continues to be strong, with lifestyle buyers looking for residential farms close to London and farmers who are keen to expand driving the market.
Another noticeable trend is demand for properties where there is scope to implement an environmental or conservation project.
This solid demand, combined with tight volumes, has meant values have slightly risen, with arable land selling for between £7,500/acre and £11,300/acre – reflecting a continued range in prices.
Given the number of potential sellers we have been advising of late, we expect the next six months to continue to be busy, with activity both on and off the market.
Liza Howden, associate director, Strutt & Parker
Continued demand for land
The past 12 months highlighted a lack of stock across all rural asset classes. While the well-documented (and largely Covid-induced) surge for country houses remains at a frenzied pace, the desire for land ownership equally sees little let up.
There are, however, very few opportunities at present and possibly more so in the South East than any other region.
While the market is still spearheaded by farmers with rollover money from development and expanding landowners, we are seeing an ever-increasing number of environmental, social, and governance-led and rewilding-minded buyers.
I believe that land prices will remain strong through 2022 and possibly even go up, particularly as we see woodland and marginal land playing more significant roles in buyers’ decision-making.
The environmental angle of land ownership and the fact this country is not getting any bigger will continue to drive prices and demand.
Will Matthews, partner, Knight Frank
What sold well?
Suffield Farm, near Guildford, Surrey was sold by Strutt & Parker for more than its £5.5m guide price in multiple lots to a combination of local buyers.
The property was set across 120 acres and included a five-bedroom house, one cottage and equestrian facilities.
What sold well?
Knight Frank sold the 1,011-acre Roundtown Estate, near Basingstoke, Hampshire. The listing had significant interest from a range of buyer profiles and sold well under competition.
The estate is made up of a mix of arable land, pasture land and woodland and includes a range of modern farm buildings.