More than 46,000 acres were marketed during the third quarter of 2006 taking the year's tally for the first nine months to over 158,000 acres, year on year this is about 4% more than last year. Analysis of the data for England shows that for the same comparative period the increase in supply is 6.4% at 114,750 acres compared with 108,000 acres last year.
However according to Savills rural research, this masks some significant regional variations in supply. The South East, where in Hampshire alone more than 11,000 acres had been marketed by the end of September, has so far had over double the volume of last year. In contrast the supply in the East Midlands, North East England and the West Midlands has been significantly less.
A closer look at the regional data shows that on a county by county basis the picture again differs. For example in the South West, In both Cornwall and Somerset the area marketed during the first half of the year increased by 45% compared with the same period of 2005. In contrast, market activity in Wiltshire decreased by 36% from 3,250 acres in 2005 to 2,100 acres, while supply in Devon and Cornwall accounted for more than half of the total acreage marketed to 30 September in the South West.
For the West Midlands region, the number of acres marketed in Gloucestershire decreased significantly to just under 800 acres compared with over 3,500 acres in 2005, a fall of 80%, but market activity in Shropshire increased by 5%.
Although there is more land on the market, strong demand continues to drive up values. Our Farmland Value Survey showed that across Great Britain the average value for all types of farmland increased by almost 5% during the first half of 2006 putting the total increase since the beginning of 2005 at 18.4%. The highest increases in the average value of farmland were recorded in the South East of England (10.7%) and the East of England (7.1%), despite the increased supply in both these regions.
Jessica Simpson of Savills farms sales team comments, "Amenity value and foreign buyers for commercial farmland have kept prices high, while the imbalance of supply has led to further increases in land values in the UK. Looking ahead, our outlook remains positive for the farmland market, we currently see no reason why present values can not be sustained. The combination of the agricultural industry seeming to be turning a corner, with commodity prices improving and an increased demand for alternative energy crops, and anticipated large City bonuses is likely to mean that competition for farmland should remain strong."
