Farmland market remains strong and safe
The EU referendum created some uncertainty at the beginning of this year, but as we reach the end of the year, the market is holding strong in the face of political change.
The spring farmland market in England was quieter than normal, which was undoubtedly due to uncertainty in the run-up to the EU referendum. However, activity since the vote suggests that sales will more or less catch up in the latter stages of 2016.
"Farmland is still very much a traditional market with the majority of sales in the spring and autumn period. While the referendum probably resulted in some land being held back in the spring, there are some big estates which have come to market since the vote," says Rhydian Scurlock-Jones of Savills rural professional services in the West Midlands.
"Savills research shows that just over 162,000 acres were publicly marketed across the UK in the first nine months of 2016, which is slightly up on the acreage marketed during the same period of same last year. Within that, in England activity was down by 1 per cent, tempered by uncertainty, but in Wales activity was up 43 per cent.
"While there remains some uncertainty around support payments during and post-Brexit, government confirmation that current levels will be guaranteed until 2020 has helped settle the market. Interest in estates launched in the late summer and autumn has reflected this confidence," said Rhydian.
"Though income yields tend to be low from farmland, it is seen as a very secure and tangible asset against other more volatile markets. This, coupled with the scarcity of land, will continue to drive the market.
"If it was purely down to the profitability of farming then the uncertainty around Brexit and other variable in agriculture might have a more significant impact. As it is, people also buy for a huge range of other reasons, including capital growth, lifestyle, diversification or conservational interests."
"There has been a strengthening in the amenity farm markets for units of around 250 acres or less, after a period of stagnation since the 2007 recession.
"While the complexities of the Brexit process are likely to create some uncertainty, a continuing lack of supply and the attraction of farmland and estates to a variety of buyers mean interest should remain firm for the near future."
