High average price disguises falling trend
By Louise Rose
DESPITE the average price of farmland increasing during the first quarter of the year to £3029/acre, at a number of sales considerably lower prices were achieved reflecting the increasing difficulties in the agricultural industry.
"The high average disguises much lower values being achieved for poorer quality holdings in, for example, the hill farming areas of Wales and the north and south-west," finds the latest research in the Farmland Price Survey published by the Royal Institution of Chartered Surveyors.
Also the range in farmland values is widening as farms with good residential appeal find strong demand from the non-farming sector. Blocks of bare land adjacent to or near farms, where an expansionist policy has been undertaken, often are achieving considerably more than those lacking neighbouring demand.
Good quality whole commercial units are continuing to generate interest if they are well located.
However, plenty of surveyors practising in the rural property markets expect prices to decline later in the year as more farmers decide to take advantage of current prices and sell up.
The most marked increase in the volume of land available was in the dairy sector as the recent fall in milk prices hit more farmers pockets but the pace of decline in demand appears to have slowed in some sectors.
The anticipated increase in the volume of land available will eventually have an impact on values with surveyors their most pessimistic in about 18 months time.
"Many surveyors expect farmland values to decline later in the year after recent signs that more farmers have decided to take advantage of the current situation and sell up," found the survey.
Also a number of surveyors are expecting demand to fall in the next year with the outlook most uncertain in Wales and the Midlands.
*The first quarter figure is based on a low sample. The survey records sales of 12 acres and above but excludes land sold for development or forestry, gifts, inheritances and compulsory purchases. Farmland where the farmhouse constitutes more than 50% of the sale price is analysed separately.
Average price of bare land sales
Quarter 1 – £2766/acre
Quarter 2 – £2261/acre
Quarter 3 – £2190/acre
Quarter 4 – £2395/acre
Quarter 1 – £2152/acre
Quarter 2 – £2324/acre
Quarter 3 – £2342/acre
Quarter 4 – £2354/acre
Quarter 1 – £2774/acre