England’s farmland market is busier than it has been for at least four years. The arrival of spring marked the start of a significant surge of activity, putting the market back on track after an unusual 2020 and a quiet start to 2021.
Demand is, in general, outstripping supply. The number of viewings per property is considerably higher year-on-year, due to pent-up demand which has now been released as lockdown restrictions have been eased. We are currently seeing multiple buyers for most of the farms we are selling, with some prime properties sparking bidding wars and selling for well in excess of their guide price.
One farm recently marketed by Strutt & Parker, being sold in lots, attracted bids from 31 bidders and went under offer for £1m more than its guide. Another went under offer within a week of it being put on the private market. In fact, our analysis shows that the majority of farms and estates that have sold in recent months have exchanged hands for more than their guide. One of the factors behind this is the wide range of buyers currently looking for land, with farmers, private investors, lifestyle buyers and green investors all in the mix.
Supply does continue to be tight – particularly when it comes to the open market. The Farmland Database shows that while supply did increase in Q2 the amount of land publicly marketed during the first half of the year is still below the five-year average at 36,200 acres. However, there is also a significant amount of land being marketed privately, with private sales now estimated to account for as much as 50% of the land being sold in some regions. This does mean that supply is higher than it first appears, although in historical terms total volumes are still low.
Matthew Sudlow Head of Estates & Farm Agency 07912 391202 matthew.sudlow@struttandparker.com
Cover image - Beckerings Park Estate, Lidlington, Bedfordshire, 1,306 acres, £17,000,000 – For Sale
30,400 acres of farmland came to the open market in Q2 2021.
The volume of land publicly marketed since 1 January is 8% lower than the five-year average.
Significant deals are also being struck on the private market.
Demand is outstripping supply, with the market busier than it has been for some time.
Many properties are attracting multiple bidders and there have been instances of gazumping.
Demand is being fuelled by the wide range of buyers in the marketplace.
Over 70% of farms launched in 2021 (which have sold) achieved more than their guide prices.
In Q2 2021, the average price of arable land was £9,000/acre and pasture land was £7,100/acre.
The difference between the lowest and highest prices paid appears to be shrinking.
The average price of arable land sold during Q2 was £9,000/acre, which is slightly down on the £9,200/acre we reported back in Q1. However, this is based on a relatively small number of sales and our instinct is that average prices have risen if private sales are also factored in.
2021 is the year when cuts to farmers’ direct payments, paid through the Basic Payment Scheme, start to bite, but as yet we are not seeing this directly impact the market. There is still rollover money to be invested and buyers driven by environmental objectives are starting to bid on more properties (see the analysis in the Demand section). There also remains strong demand for prime residential estates. All of our agents are currently very active, handling viewings of recent new launches, negotiating on sales launched in the spring and dealing with upcoming sales.
The Croston Estate, Leyland, Lancashire, 1,045 acres, £12,500,000 – Under Offer.