Average farmland values in England and Wales during Q1 2019 remained broadly flat but regional variations were apparent amid an uncertain climate in the UK, new data shows.
However, regional variations were apparent and buyers and sellers continued to remain cautious due to Brexit uncertainty.
Whilst transactions levels traditionally decrease during the first quarter of the year, there has been a significant reduction in activity across the sector, and this languid market has impacted on pricing levels.
Data from Carter Jonas shows average arable land values now sit at £8,719 per acre, down by 0.3% on Q1 2018.
Average pasture land values fell across both the quarter and annually, by 0.9% and 1.3% respectively, to £6,803 per acre.
Across the regions, buyers are still keen to acquire land for the right price. However, with the exception of the South of England where activity remained robust, limited availability has restrained the market.
Assets that are best-in-class, well-located or offer viable development potential remain attractive and, in some cases, sales have been agreed at or in excess of the guide price.
Andrew Fallows, Head of Rural Agency at Carter Jonas, said that with the UK facing a heightened level of uncertainty over the past few months, these findings are not unexpected.
“Undoubtedly, limited supply and wider economic and political concerns have caused people to take stock, with many waiting for clarity over Brexit before launching or buying assets.”
He said that in the current climate, demand for land is being driven by location and opportunities to add value and diversify.
“For example, land with development potential has long since commanded a price premium, particularly when compared to the steady performance of agricultural land values,” he said.
“An ongoing relaxation in planning policy has unlocked more opportunities for the development of agricultural land, with developers and house builders, on the whole, willing to absorb those costs.
“Additionally, in some areas, rollover buyers continue to stimulate activity, looking to acquire in the locality of their existing holdings.”
Support remains available for agricultural purchasers. This is reflected in debt levels which are at record highs. Low interest rates continue to benefit the sector and there is clear evidence of purchasers looking at long term fixed rates.
“Whilst we cannot avoid the current challenges impacting on the market, we are starting to see signs of improvement. Buyers are continuing to drive activity and some land, particularly smaller parcels, are attracting premium prices,” Mr Farrows added.