A growing number of farmers in the south west of England are looking to market their farms privately this autumn, rather than launch them on the open market.
Charlie Evans, Strutt & Parker's Head of Estates and Farm Agency in the South West Region, said he has ten farms, totalling 2,385 acres, available privately this autumn.
This compares with four farms a year ago, totalling 864 acres.
He has an additional 2,336 acres available in south west England on the open market.
“The trend does seem to be for an increase in private marketing,” he said.
“Normally I would expect the ratio to be 75:25 in favour of open market sales.
“There are two key reasons for this happening. The first is uncertainty about how the market will perform this autumn because of the impact of the Brexit vote.
"Some people are thinking they don’t want to lose the impact of their farms in the market through a public launch if it turns out the market is weak, so this is a way to test the market discreetly.
“I also think the current climate, in terms of profitability, is leading others to question why they are farming.
"Some have decided if they can get a good price for their farm they will sell, but don’t want to alert neighbours, suppliers or staff to the fact they are open to leaving the industry.
"Selling privately gives them privacy, so that they can carry on with business as usual for the time being.”
Private marketing
Mr Evans said off-market sales typically accounted for 25% of sales in the region, which was broadly reflective of the position nationwide.
“Private marketing is attractive to people who are looking to move but cannot buy before they sell.
"They want to be ready to buy when they find the right thing. It also appeals to those who want to sell, but continue trading as normal in the meantime.”
Mr Evans said one recent off-market sale in Devon had completed at 8% above the guide price, showing that it was still possible to achieve premium prices selling privately.
“It is still possible to get a premium, particularly a premium for exclusivity, if the farm is only offered to a single buyer or to a neighbour.
"However, it is harder to generate competition from multiple buyers.
"The main concern people have about private marketing is that you will never be absolutely certain you have got the highest price as you cannot expose the farm to the market.”
Mr Evans said the recent announcement from the Treasury that farm subsidy payments can continue at current levels until 2020 had been met with relief and gave some short-term certainty to buyers.
“Overall, prices remain stable and there is good local demand in some areas.
"But, as has been the case for some months, the market is very location specific.”
