Land News

Land price rise boosts confidence

Lawson Fairbank , 21st January, 2007

2006 saw arable land prices rise by 7.5% with an average price of £3,161 an acre in England.

The latest Farmland Database figures from Strutt & Parker show that 73,200 acres of land were sold in England, an increase of 24% on the previous year.

Despite a 4% increase of land being marketed in 2006, some 111,185 acres of land were marketed, yet prices still rose with Strutt & Parker's Tim Fagan forecasting further price rises this year.

“We are expecting English farmland prices to rise by around 10pc in 2007, thanks to confident, well-financed buyers from both inside and outside the farming industry and a slight decline in the amount of land likely to come forward for sale,” he said.

“In 2006, working farmers returned to the land market in some force and, with the agricultural outlook looking reasonably good, we expect them to stay in the market in 2007 alongside the lifestyle buyers who have been very active for some time now and whose buying power shows absolutely no sign of being diminished,” said Mr Fagan.

Mr Fagan said that the amount of land sold last year was boosted by a handful of large one-off sales that are unlikely to be repeated this year.

“We're expecting to see a slight fall in the amount of land coming to the market in 2007, not least because the improved outlook for agriculture means farmers will be keener to hang on to what they've got,” he said.

Strutt & Parker report that in 2006, 46% were bought by farmers with lifestyle buyers also making up 46% of sales. Equestrian buyers accounted for 5% of land purchases with 3% by conservation bodies. Average grassland prices in England were £2,870 an acre.

Charles Dudgeon, of Savills, speaking at the 17th Semex Dairy Conference in Glasgow, reported renewed buoyancy within the UK agricultural property market with land prices on the rise and the majority of properties being bought as going concerns by “coalface producers”, including dairy farmers.

“We are seeing real growth in demand for land parcels and working farms including dairy farms and, significantly, this is from practising producers wanting to grow their existing businesses and secure land for succession.

“In addition to domestic buyers, there is a lot of interest from international buyers, particularly Danish and Irish producers, for whom the availability in the UK of sizeable ring-fenced properties at good value and with less red tape is proving an attractive proposition,” he added.

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