Continued demand combined with a further reduction in the volume of arable farmland has resulted in the best first quarter growth in farmland values since 2008.
This continued demand is supported by the number of new applicants registering to buy farmland, which were 16% up during the first quarter of this year compared with the same period of 2010.
High crop prices and the fundamentals of feeding the world’s population continue to drive the interest in farmland as an investment asset, especially at a time when the performance of many alternative assets is muted.
Across Great Britain, average grade 3 arable land recorded growth of 2.3% during the first quarter of 2011 with the eastern regions of England recording the strongest growth in values of 5%.
Supply 2011
Our research shows supply was constrained during the first quarter of 2011, with a 22% reduction in the volume of farmland marketed across Great Britain compared with the same period of 2010.
In England, just under 13,500 acres were publicly marketed during the first quarter of 2011, around 1,000 acres fewer than for the same period of last year.
However, as illustrated in Graph 1 in the gallery, this pattern was not consistent across all the English regions. Increased supply, albeit from a low base, was recorded in the North of England, East and West Midlands, where supply increased by 78%, 63% and 58% respectively. Although representing a relatively small number of farms, this increase in activity was generally made up of more farms, rather than larger farms coming to market.
In Scotland just over 1,600 acres were publicly marketed in the first quarter of 2011 compared with just under 4,600 acres in the same period of 2010, a decrease of 65%.
The above figures do not account for any privately marketed farms. However, anecdotal evidence suggests that privately marketed farms have already this year made up a fairly significant part of the total farmland market activity, particularly in the eastern counties.
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