Unnerved land sellers are holding off, but there are keen buyers out there
Brexit-related uncertainty continues to weigh heavily on farmers’ minds, and decisions over releasing land to the market continue to be delayed, according to the latest research from Savills.
Between January and July, supply levels across the country were down, with the exception being the north which was up 32 per cent against the same period in 2018, but that’s down to supply levels in the north being very low in 2018.
The biggest drop however was the Midlands which was down a staggering 61 per cent. This is largely down to the fact that a lot of vendors were waiting for Brexit to happen at the end of March and, when it didn’t, they decided not to sell and instead wait for October.
There are still a good number of buyers around and particularly those with rollover funds to invest and also overseas buyers now seeing the UK as a good place to invest, particularly with the currency differential.
Across England, 62,492 acres of farmland were publicly marketed to the end of July 2019 compared with 86,193 acres in same period in 2018, a 27 per cent decrease. During the same period In Wales, 4,617 acres of farmland were publicly marketed compared with 8,687 acres in the same period of 2018, a decrease of 47 per cent, and 18,526 acres of farmland were publicly marketed in Scotland compared with 30,739 acres in same period in 2018, a decrease of 40 per cent.
It is well documented that market activity over the past 15 to 20 years has been low in the historical context with, on average, farms now changing hands just once every 200 years. However, this year we seem to have almost set a new low. This confirms that in times of uncertainty decisions are delayed until the direction of travel becomes clearer.
To the end of June 2019, almost the lowest recorded acreage has been publicly marketed land since our records began in 1995. The exceptions were 2001, the year foot and mouth closed the countryside and just 61,000 acres were publicly marketed, mainly in the latter part of the year.
However, while sellers appear to be unnerved by the combination of policy change and political change, and consequently are deferring decisions to go to market, buyer behaviour has been less affected, which is demonstrated by relatively strong prices achieved.
It is very apparent that a conundrum exists whereby farm purchasers want to enact their expansion plans almost irrespective of Brexit while sellers seem to find it hard believe that there is in fact an active market for farmland.
Andrew Pearce is head of farm agency at Savills in the Midlands and North