Volatility shows need for right pricing strategy
Price variations in the farmland market are widening even at a very local level, as agricultural commodity markets remain weak and buyers show more price sensitivity.
The land market is showing more volatility within regions than in the past, which make it vital that sellers adopt the right pricing strategy.
There is a massive range of prices depending on what the land is, where it is and size.
A year ago it was the larger blocks of land which were most in demand, but in some regions we are now seeing smaller 50-acre blocks securing the higher premiums.
Location is becoming increasingly important as lifestyle and tax-driven buyers become key to a premium bid.
Meanwhile, farmers are looking much more closely at what they might need to invest in land and therefore factoring that more accurately into what they are prepared to bid.
While I welcome the upcoming EU referendum, it has caused uncertainty, with less land coming to the market in recent months while average prices have remained relatively stable.
Many of these sales were agreed before the date of the referendum was announced. However, it does feel like the threat of Brexit is having less of an impact on land values than some commentators had predicted.
There may be some buyers and sellers holding off until they find out the outcome in June, but I don't foresee a significant drop in land values and it will continue to remain a good investment.
According to Strutt & Parker's Farmland Database, the average price of arable land in England sold during the first quarter of 2016 was £9,668/acre, which was down three per cent from the December 2015 figure, but higher than the average price in the first quarter of 2015.
With buyers across the country becoming increasingly discerning it is important to have a sensible guide price, which reflect local circumstances.
You can't always follow average prices for a region, as prices can vary considerably within a very small area.
This means it is absolutely vital to get honest, expert advice on what is selling in your area and how to maximise the potential of any sale.
Mark McAndrew is head of national farm sales at Strutt & Parker
