October Property Market Update
Throughout the year, Fisher German has been reporting excellent land sales from each of its six Midlands offices and the latest national Rural Land Market Survey from the Royal Institution of Chartered Surveyors reinforces this. With the headline “Farmland prices reached unprecedented levels in the first half of 2007”, it went on to report:
Prices
- Prices increasing by 22.6% on a year earlier (compared to 18.1% in the second half of 2006)
- Weighted average price of farmland increased to £8,850/ha. (£3,582/acre)
- Arable land increased by 23.3% to £9,287/ha. (£3,758/acre) on last year
- Pasture land increased by 21.8% to £8,412/ha. (£3,404/acre) on last year
Demand
- Demand continues to boom in agricultural & non-agricultural sectors
- With strong commodity prices, commercial farmers are keen to expand
- Sales to individual farmers increased by 50% (the highest since the survey began)
- Competition from Denmark & Ireland, where land prices are far higher than the UK
- Demand for residential farmland driven by record City bonuses
Supply
- Farmland supply picked up during the first half of 2007 (although still relatively low against demand)
Volume of Sales
- Farm sales fell by 29% in the first half of 2007
- Farm sales are now at 2004 (first half) levels
- Institutional investors doubled their share of purchases from 2% to 4% (highest share on record)
- Non-farmer individual purchases reduced slightly, from 38% to 37% (reflecting the lack of available product on the market)
- With high commodity prices, farmers are under less pressure to sell
For the West Midlands…
- Land prices rose by 12% compared to the first half of 2006, which was slightly less than the second half of 2006 (15%)
- Demand however continued to increase as fast in the non-residential sector, slightly easing in the residential sector although still remaining strong
- Land availability increased in both sectors at the fastest rate recorded
- Individual farmers share of purchases fell slightly from 46% to 45%
- Individual non-farmers share of purchases fell from 41% to 38%
- Agri-businesses share of purchases increased from 6% to 7%
- Investors share of purchases increased from 1% to 3%
Staffordshire has always been a county known for its strong agricultural connection, but with improved communication routes opening up the county to more lifestyle buyers, competition for land has never been so fierce. We are seeing high commodity prices bring farmers back to the market to compete with non-agricultural buyers and, as such, a restricted supply of farms being offered. Once more, we expect prices to remain high for the year ahead, if not increase further.
For further information, or if you would like a free appraisal of your farm, please contact James Pegrum at the Stafford office either by email james.pegrum@fishergerman.co.uk or telephone 01785 273980.
- Ashby de la Zouch
- 01530 412821
- Banbury
- 01295 271 555
- Knutsford
- 01565 757970
- Market Harborough
- 01858 410 200
- Newark
- 01949 851815
- Southampton
- 02380 883150
- Stafford
- 01785 220 044
- Worcester
- 01905 453275
