Interim Farmland Market Values

02 June 2009

Category: Bespoke Rural & Land Research

Farmland values hold firm despite massive increase in amount of land for sale "The spring land market has taken off with more farms and land for sale since the start of April than for the same period in 2007 and 2008. Over 120 farms and parcels of land were marketed and the area of land marketed has almost doubled to 30,000 acres", comments Giles Wordsworth, Head of Farm Agency.

"Values for equipped farms and bare land have stayed the same as at the start of the year - an average across England of £7,100 for equipped farms and £5,100 for bare land.

The firmness of prices, when most other property values are still falling, shows the resilience of the farmland market, which is mainly due to the strong and continuing demand from farmer buyers - who are driving the market compared to non-farmer or residential buyers.

For example, we have just auctioned over 1100 acres for UK Coal in Leicestershire, Derbyshire, South Yorkshire, Co Durham and Northumberland and the vast majority sold well. In Leicestershire, Derbyshire and South Yorkshire, the prices achieved were well above the guides and we often had three or more bidders for each lot. The best arable land sold for over £8,300 per acre and the average was comfortably over £6,000 per acre.

Normally you would expect prices to fall if the amount of land for sale increases but it is the underlying profitability of land coupled with farmers' general optimism about the medium-term prospects for commodity prices and markets which is maintaining their demand for land."

Looking forward to the rest of 2009, Giles adds: "The market is proving to be more robust than we had expected - this is a good indicator of the strength of the market and bodes well for the rest of the year. We still expect prices to rise slightly during the summer and then remain the same until the end of the year."

All Farms

According to our Research Department over 120 farms and parcels of land were marketed - up from 70 in 2007 and 75 in 2008 respectively - and the area of land marketed has almost doubled to 30,000 acres.

Equipped farms

There was a big increase in equipped farms for sale.

Almost 90 farms have been marketed since the start of April, up from 60 in the same period in 2008 but almost 80% more are for sale (25,000 in 2009 compared to 14,000 acres for the same period in 2008). This is a result of larger units being marketed - the average size rising from about 240 acres in 2008 to 285 acres this year.

Prices have stayed at an average across England of £7,100 per acre - the same as in the first quarter of the year and about 20% lower than the peak prices asked at this time last year.

Bare land

The bare land market has really taken off.

There have been more parcels for sale - 30 parcels over 50 acres compared to 16 for the same period in 2008 and 12 in 2007. And the area for sale has almost doubled to 5,200 acres compared to 2,600 in 2008.

Prices have also stayed constant at an average of £5,100 per acre - the same as in the first quarter and well above levels a year ago.

Farm Types & Regions

There have been more arable, dairy and mixed farms for sale than in previous years but fewer livestock units.

The South East and South West continue to be the most active regions, with over twently sales each while Yorkshire and the North East are the quietest with less than ten sales each.

For further information on our Farmland Market Research, please contact:

Dr Jason Beedell, Head of Research on 01733  866562 or e-mail jason.beedell@smithsgore.co.uk or Giles Wordsworth, Head of Farm Agency, on 01865 733302 or e-mail giles.wordsworth@smithsgore.co.uk.