Supply 2013

Our research indicates that the volume of acres publicly marketed across Great Britain during 2013 is broadly similar to recent years with the long term trend line beginning to plateau.

A total of 144,000 acres of farmland were publicly marketed during 2013 and although this is an increase of 7% on the 135,000 acres of 2012, the overall picture is still one of constrained supply. Graph 2 clearly illustrates how volumes have fallen – 2013 is 18% less than in 2005 and 50% less than 2000. Over the past 50 years turnover of farmland has fallen from around 2.5% to 0.25% of the utilisable agricultural area of Great Britain.

This report focuses on publicly marketed farmland and takes no account of the privately marketed acreage, but anecdotal evidence suggests this market represented about 30% of all land traded in 2013.

In 2013 the months of May, June, July, August and September were the most active with 75% of the year’s acreage marketed in Great Britain during these months.

England

In 2013, 91,470 acres of farmland were advertised across England. This compares with 88,700 acres in 2012 and represents a 3% increase. However, it is still 21% less than the amount of farmland marketed in England during 2011, 26% less than in 2005 and 45% less than in the year 2000 (Graph 3).

All regions across England recorded an increase in activity with the exception of the East and South West. In the South West, both Somerset and Devon saw a fall in the volume of publicly marketed farmland and in the East of England volumes fell in all counties bar Essex.

Scotland

For the second year running, supply increased by 9% in Scotland with 43,300 acres of farmland publicly marketed. Although this is the highest supply in Scotland since 2005 when 43,500 acres were publicly marketed it is still 62% less than the acreage marketed in 2000.

Wales

The volume of publicly marketed farmland significantly increased in Wales to 9,300 acres. When compared to 2012 this is a 37% rise but is 46% lower than the volume marketed in 2000.

Values 2013

According to the Savills Farmland Value Survey, the average value of prime arable farmland across Great Britain strengthened by 12.3% to just over £8,500 per acre in 2013. This follows an 11.2% rise in 2012 and furthermore a 273% increase in average prime arable values during the past 10 years. This compares to 135% for prime central London residential values.

England

In England, the average value of prime arable land increased by 12.8% to £8,626 per acre during 2013. This follows an 11.3% rise in 2012.

During 2013, the strongest value growth was recorded across the eastern regions of the country with prime arable land increasing by 19.4% to average just under £10,000 per acre in East Anglia, 13.8% in the East Midlands and 10.4% in the South East.

In comparison, although not insignificant, with the exception of the South West at 10.1% our research illustrates a picture of slightly softer growth across the North (7.5%) and the West Midlands (6.4%).

Scotland

In Scotland, where market activity was weak during the first half of the year prime arable land values increased on average by 6.6% to £7,941 per acre by the end of 2013. This follows a 9.9% rise in 2012.

Wales

The average value of prime arable farmland remained unchanged throughout the year at £7,000 per acre. Where growth in values occurred it was at a slower rate than recorded during 2012. The strongest rise in values occurred for grade 3 arable land with growth of 3.3% to average £5,683 per acre and prime dairy land where a 2.2% increase pushed average values up to £6,135 per acre.

Growing diversity of farmland market

It is important to note that average values do hide regional variations and the farmland market remains increasingly diverse. Values are closely linked to location, land quality and type as well as the residential weighting of the farm, which has led to the widening in the value gap between the most and least in demand land. The gap currently is as much as £4,600 per acre.

Graph 4 illustrates farmland values adjusted for inflation and interestingly highlights a similar pattern in terms of the difference in value between the best and poorest prices paid for farmland in the mid-nineties.

In 1996, boosted by the introduction of Arable Area Payments (AAPs) in the MacSharry CAP reforms, the value gap at 2013 prices had widened to almost £2,900 per acre and during the next eight years narrowed to around £2,000 per acre until it began to widen again in 2006.

However, where poor lowland grassland is part of a larger holding including either hill land or prime arable land, which are consistently in demand; the value of some of the less profitable rough grazing is being supported.

In addition, according to the 2013 Savills/Tilhill Forest Market Report the forestry market across Great Britain has never been more active than in the last 12 months, with Scottish sales leading the way and significant growth in Wales. The average value per stocked acre which is now at £2,900 is at record levels. This has given an annualised average growth since 2002 of 15.4%. Fifty per cent more forestry property was traded in the last year compared to 2012, to the value of £97.3 million, 8.5 times the value traded in 2000.

Taken from
Market Survey: UK Agricultural Land 2014