Top banner

Spring Agricultural Land Market

Andrew web
25/04/2006 Andrew Ranson MRICS FAAV Partner Partner, based at the Banbury Office, Andrew has wide ranging professional experience including the sale of most types of rural property, particularly farms and development sites...


The supply of farmland in the south midlands, although slightly greater than last year, has still not returned to pre SPS (Single Payment Scheme) levels. The pent up demand over the last couple of years is keeping prices very strong and generally at levels of more than £3,000 per acre, not including the SPS Entitlement.

Despite recently agreeing the sale of a small 250 acre estate near Brackley, Northamptonshire, for close to it guide price of £3.2 million (a lot of the value of this was clearly tied up in the residential elements), most of the other deals that we have done, either sale or acquisition, have been for bare land, rather than complete farms. In most cases, purchasers have not been very focused on whether Entitlements are included or not and the delays in the payment of most farmers’ 2005 SPS cheques does not appear to have affected values.

As is often the case, many purchasers point out how little these values reflect the current and likely future profitability of agriculture. The fact is, and has been for some time now, agricultural profitability is just one of many drivers in the market and in most cases has little influence. In this area, Lifestyle buyers are the strongest influence, particularly for residential farms, but also for smaller blocks of land. IHT investors are also a regular influence having replaced the once common Rollover purchaser.

It will be interesting to see if the increasing availability of farmland to rent, reduces the number of commercial farmer purchasers in the market. Irrespective of this, I doubt that values will fall to the same pre SPS levels in the short term. Any increase in the availability of land for purchase would certainly be very welcome, but in my view, unlikely to satisfy the pent up demand in this area.


Go to News & Views

Offices:

 

Property search

Linesearch

RICS