The only realistic way for some farmers to expand is to sell in a high land price area and buy more acres in a cheaper county.
This has always happened but the trend may grow as the range of land prices widens, says Mark McAndrew of Strutt & Parker.
“Land prices are all over the place, anywhere from £5,000 to £10,000 an acre,” he said at the firm’s Rural Land Briefing. “You might be able to get £10,000 an acre in Wiltshire and almost double your farm size by moving to Northumberland.”
While prices generally were increasing, the range was widening and the investment buyer was a relatively small but important part of the market.
In counties including Gloucestershire, Wiltshire and Berkshire, prices of £8,000-11,000/acre had been achieved in recent farm sales.
Land prices would rise again this year by 5 to 10% on a cautious estimate and by 10 to 20% on an optimistic one, said Mr McAndrew.
Good commercial arable farms were the easiest to sell, he said, and good dairies were in strong demand too – but they must be in a prime dairy area such as Cheshire, carry at least 150 cows and in very good condition.
At the top end, the market for large estates was quite tricky – buyers were very pernickety and wanted no warts at all.
Let land with FBTs of only one to two years carried hardly any discount, Mr McAndrew added, and the demand for good arable land was so great that even a five to 10 year FBT might only discount values by 5% to 10%.