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31 Spring / Summer 2019 Aspects of Land
T here were those
who thought
there would be
a significant
increase in how
much land came
to market in 2018, as farmers
responded to proposed
changes to agricultural policy
and the prospect, for some, of
rising debt.
However, although supply
was up by 31% compared to
2017, this was mainly due to a
couple of very large offerings.
“The ‘flood of land’ fears
didn’t materialise,” says Alex
Lawson of Savills National
Farms and Estates. “If you
exclude the two or three very
large land holdings, the amount
of land on the market was
broadly in line with the 10 year
average. There are plenty of
active buyers and the majority
of farms and land offered for
sale have sold.” To date, in
2019, there is no sign of a large
acreage becoming available.
Last year, farmers accounted
for about 45% of buyers, the
vast majority of whom were
buying to expand their current
operations. “When farmers
see neighbouring land coming
to market, which might only
happen once in a generation,
they’re usually still keen to
secure it,” says Alex.
Prices can vary enormously
depending on how much
competition there is.
“The market has become
even more polarised,” he
explains. “For the very best in
class, or when there’s serious
competitive interest, prices
often spike, but without it, sales
can be much more difficult.”
Charles Dudgeon of Savills
Farms and Estates, Scotland
has noticed a parallel trend
with Scottish sales. “We’ve
seen prices paid for Class 3
land vary from between £5,000
per acre to more than £10,000.
It all depends on the location
and expansion plans of other
farmers,” he says. “It makes
targeted marketing and setting
the strategy for a particular
sale vitally important.”
Overall in the UK in 2018,
land prices fell by 1.8%
compared to 2017. “There
has been a gradual softening
of prices since the peak of
2014-15,” says Alex. “But
in the decade and a half up
to that point values had
risen astronomically, so a
mild market correction was
inevitable. Most land is still
worth four times what it was
in 2000.”
Almost 50% of buyers
were looking for amenity and
lifestyle properties, rather
than a working farm. “They
want somewhere private, well
located and with the right
facilities for them: it could be
sporting potential, somewhere
to ride or an opportunity to
plan and create something for
future generations to enjoy.
This trend will continue. Some
buyers are purely driven by
financial returns, while others
are just looking for the perfect
family home,” says Alex.
In the current market, a
property that offers more than
one source of income will
always attract more interest
than one that doesn’t. In
Scotland, Charles has seen
farmers sell their farm to
buy an alternative because it
gave better opportunities to
diversify. “It’s not always about
expanding a farm,” he says.
“It’s about how the land is
occupied to create an income.”
One study has predicted
that Britain’s agricultural
production area could shrink
by 30% by 2050, which will
certainly shake up how land
is occupied. “It is likely to be
those people with the most
enterprising ideas who profit
most from change,” says Alex.
For more on land prices, click
research on
Adjust to fit ~
A decade and a
half of land-value
rises has led to an
inevitable mild
market correction.
However, most land
is still worth four
times what it
was in 2000
Land prices vary hugely depending on demand
MARKET
UPDATE
SOURCE: SAVILLS RESEARCH; COMMITTEE ON CLIMATE CHANGE