Shrinking supply continues to typify the East Midlands farmland market, where the number of acres publicly marketed fell for the third year in a row in 2017.
Just 13,900 acres hit the open market across Derbyshire, Leicestershire, Lincolnshire, Northamptonshire, Nottinghamshire and Rutland in 2017 – down 21% on the year before. In 2015, 19,300 acres were available.
A wide range of prices have been paid, with premiums achieved where rollover buyers and neighbours competed – a theme predicted to continue this year.
What’s on the market?
Land at Hoveringham and Caythorpe, 12 miles from Nottingham, comprises 363 acres of predominantly arable land and is owned by Trinity College. Most of the estate was left to them by Henry VIII and has been owned by the college ever since. It’s on the market with Savills at a guide price of £2.6m.
What sold well?
The sale of Underwood Lodge Farm at Melton Mowbray, Leicestershire, showed that not all farmers want whole units if value is tied up in property. The dairy unit had 172 acres of grass and arable land, with a 14×14 direct line parlour, a range of buildings and two houses. It was broken into three lots and sold by Shouler & Son for just over £2.4m.
Looking back at the past 12 months
The range in values continues to be extremely varied and localised, with the region recording the greatest average fall in values for all land types in 2017, according to our data. There is significant demand, but only at the right price and in certain areas.
There has been a severe lack of supply and, consequently, we have several clients who are looking to purchase commercial farms over 400 acres.
A number of these buyers have substantial cash reserves as a result of development proceeds and are looking to invest back into quality land, often without a principle property, which is priced at a fair value.
Buyers have become ever more discerning and aren’t drawn into buying poor-quality land, even when geographically convenient.
Ben Ainscough, rural associate, Carter Jonas
Looking to 2018
The key influences that could affect the market in the next 12 months across the East Midlands are buyers with rollover funds, local wealth, supply and demand, and tax.
Supply and demand is easy if you have the demand in your area, including farmers and landowners who wish to expand – that will lead to prices remaining positive.
The type of land and locality is important, with the swing between good and bad being as much as £5,000/acre.
Rollover availability and local wealth is always in the background and affecting land values. With the abundance of recent planning opportunities on farmland, farmers and landowners are actively looking for ways to reinvest back into land to secure tax relief.
Ben Shouler, partner, Shouler & Son