The UK farmland market is not immune to the wider economic climate, and the marketplace is becoming increasingly diverse. Forecasters remain downbeat about the outlook for the UK mainstream residential market for 2012, whereas the prospects for agriculture are generally good but tempered by increasing volatility, rising input prices and the future CAP reforms causing some uncertainty.
On the one hand, the opportunities presented by good quality large commercial farms (income generation and capital appreciation) are highly attractive, with a shortage of this type of farm ensuring prices achieved are often significantly above the average figures reported in this bulletin.
Conversely, amongst buyers there is a resistance to poor quality farmland and to smaller farms where the residential aspect dominates. Sensible guide prices and realistic vendor expectations are key to securing sales in these sectors of the market during 2012.
We expect increased competition for the best commercial farms, which will further widen the price gap between the best and poorer quality farmland – continuing the trend illustrated in Graph 2 in the gallery.
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