Quiet start to 2014 land market

Most agents have bookings for farm sales in spring, but the year starts very quietly, despite cash buyers being ready to snap up well-equipped commercial holdings.

Many agents feel, however, that there is no longer the strength and depth of buyers there was in the past couple of years, so an increase of 10% or more land on the market could have a big effect on prices.

Savills estimates that, in total, 143,500 acres was openly marketed last year. In addition to this it suggests that about 30% of the land traded each year is sold on the private market.

Over the next few years, while the influences for future farmland (value) growth are finely balanced against the risks, the firm believes that the reasons for growth outweigh the negatives. The increased demand on land for renewable energy is one driver.

Interest rates, debt, pressure on profitability and cashflow, alongside changes to taxation and subsidy regimes all have the potential to increase supply and therefore put pressure on price growth, Savills said in its end of year report.

The same report predicts average value growth of 6% over the next five years but also significant variation between rates of growth across the market.

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