Sales agreed on a series of farmland deals across the East Midlands during 2016 have demonstrated important indicators of demand, despite a year of political change and uncertainty, according to Richard Gadd of Savills farm agency team in Nottingham.
He explains: “During the first half of the year, supply was fairly limited and buyer interest was incredibly parochial which resulted in some exceptional sale prices at both the high and low end of the region’s range. The referendum delayed a number of purchasers who otherwise would have offered without delay, resulting in a more active autumn market. By the year end, 180,000 acres of farmland had been marketed in Great Britain, an increase of two per cent on 2015.
“Volume in the East Midlands was up and average values remained remarkably resilient, whilst prime arable land in the UK fell by approximately 3.3 per cent to £9,170 per acre. The region’s prime values remained stable at around £8,828 per acre for well placed blocks of land.
“From the Nottingham office, we agreed deals on over 1,500 acres of land across the East Midlands with a value in excess of £14 million, including: 577 acres of productive arable land in Papplewick; 247 acres of productive cereal and root cropping land near Mansfield; 30 acres of arable land to the north of the county achieving in excess of £10,000 per acre; nine acres of strategic land at Woodborough which achieved over £25,000 an acre; and 180 acres of bare arable land in South Yorkshire, achieving in excess of £9,000 per acre.
Savills research indicates that UK farmland values are expected to rise by 5.5% over the next five years, whilst farmland supply is expected to increase by 10% in acreage over the same period.
Richard adds: “Looking forward into 2017 the market seems set fair albeit with growth relatively subdued. Whilst uncertainties regarding the EU negotiations will overhang the sector, the underlying fundamentals supporting land purchase remain. For so long as supply remains tight, progressive farmers and those with rollover funds to reinvest will continue to underpin the commercial market while demand for good residential, amenity and sporting farms is stronger following a resurgence of lifestyle buyers.
“Selling a farm has the potential to be a hugely stressful process particularly when it combines the disposal of a home which has been occupied by the same family for many generations: a business, a livelihood and an inheritance.
“For the majority of owners who have decided to sell the primary objective is to achieve the best price. In order to achieve this, preparing for the sale well in advance of any marketing is essential and will help to avoid delays or potential conflicts later on.”
The Savills farm agency team is supported by an experienced rural department in Nottingham comprising: estate managers; valuers; and food and farming consultants who work closely alongside the development, residential and commercial teams.