Arable values take a tumble
Arable values take a tumble
By Andrew Shirley
ARABLE land values floundered during the first quarter of the year, according to a national firm of land agents.
Figures in the latest edition of Strutt & Parkers Farmland Update show average arable land prices fell by 7.7% to £5918/ha (£2395/acre), and are now close to the five-year low of £5600/ha (£2267/acre) reached in June 2001.
Prices have been on a downward spiral since 1997 when values peaked at just under £8000/ha (£3237/acre). There was a brief upturn last year, partly due to the lack of supply caused by foot-and-mouth, when very few farms could be brought to the market.
But Ian Hepburn, head of rural agency at the firm, reckons the price slide is not necessarily the start of a more drastic decline. "I think this drop is more a reflection of the uncertainty in the market at the end of last year after Sept 11 and foot-and-mouth than being indicative of the beginning of a collapse. Values should pick up by the end of the next quarter."
The agent is more cautious for the longer-term prospects. "In commercial areas like East Anglia the balance between supply and demand is okay at the moment, but if more land is put on the market values for less-productive land might come under pressure."
Some producers, however, are convinced that prices have already tumbled and believe many deals are being done privately at lower levels than the figures released by agents. Mr Hepburn denies this. "We try to factor private sales into our arable land index and these are pretty realistic figures. There are not as many deals done privately as farmers might think." *