Land prices that have already reached more than £15,000 per acre could continue to rise in 2024, an expert has predicted.
Because of this, farmers could use the ongoing imbalance in supply and demand as an opportunity to service existing loans by selling land to reduce their borrowing.
This is according to John Coleman, head of farm sales at GSC Grays, who notes that land has already reached £15,000 plus per acre from small parcel sizes.
He predicts that prices are expected to continue to rise whilst the current supply and demand imbalance remains.
Demand for land is currently high and there remains a significant amount of roll-over money which is looking for a home.
There is also a willingness from the banks to lend to those whose businesses can support greater borrowing, Mr Coleman explains.
He says: “With demand continuing to outstrip supply I would certainly recommend moving now to be in the first batch of farms offered for sale in 2024 to ensure the most competitive bidding.
“With 2024 the first year without BPS entitlement payments - although there will be some diminishing de-linked payments for the next two years - this is likely to put some farmers under pressure to service their outstanding loans.”
One aspect Mr Coleman notes is the desire of some farmers to bring their operations within a ring fence.
Most recently, GSC Grays has seen demand from famers who have built their businesses up by buying and or renting blocks of land nearby their main holding but who now want to rationalise that and bring their operations within a ring fence.
Mr Coleman says: “With the scarcity of farms of this nature we expect competition will continue for the viable and commercial farms of 350 to 450 acres with the result that the disparate blocks they had been farming coming to the market in return.
“If the volume of land for sale starts to increase beyond the demand capability then it is possible that prices may start to fall back," he says.
"But I am not expecting this to happen next year despite the likely change of government and a potential refocussing on Agricultural Property Relief threatened by parties from all sides.”
