Our analysis of farm transactions, where Savills acted for the buyer or seller, for the first half of the year indicates that the profile of sellers remains similar to the past two years. Farmer and non-farmer sellers each represent around 45% of all sellers with the remaining sellers being institutional or corporate.

The reasons for selling also remain broadly similar to previous years, with business reasons, relocation and investment, being the main drivers. Our research indicates that there is an increased proportion of sellers citing retirement as the predominant reason to sell.

Anecdotal evidence appears to confirm that some farmers, especially those without successors are taking the opportunity of current record values to exit the industry. Debt related sales remain responsible for fewer than one in five sales but we expect this to be higher by the close of the year as commodity prices remain under pressure in the short term.

Demand from all, existing and new, non-farmer (lifestyle) buyers appears to have overtaken farmers as the main type of farm buyer. The proportion of farmer buyers has fallen slightly due to a weakening in the positive sentiment of some farmers due to lower current commodity prices.

Farmer buyers are now at their lowest proportion of the market since 2003. However, the proportion of buyers who are buying in order to expand continues to rise and now represents half of all buyers. This indicates that many entrepreneurs are still growing their businesses, despite current commodity prices, reflecting the longer term view that they take. Medium-term (five year) forecasts for most agricultural commodities are positive in terms of demand and prices. It also reflects that many farms now produce significant non-farming income which helps spread business risk.

Farms compete with other type of assets and investments for non-farmers’ money. Our research indicates that the proportion of ‘new’ non-farmer buyers also fell slightly, which reflects the recovery and greater economic and political certainty in other types of asset, such as residential, commercial and equities.

Farmland is seen as a safe haven during a period of recession and, now that the recovery is firmly established, buyers will consider other assets more readily. However, those non-farmers who have already invested in farmland continue to do so, and are an increasing proportion of the market, reflecting that they like the tangibility of the asset and the returns it generates, which are not all financial.

Most purchases remain funded by cash, with only 20-25% funded by borrowing. Almost 10% of purchases in the first half of 2015 were funded by rollover of capital from development and other sales, a large rise from 5% of purchases in 2014 and 2.5% in 2013.

This reflects the recovery in the economy, especially in increased land development. Before the recession, rollover funded 25-33% of deals so there is still plenty of scope for this type of purchase to again become a more influential driver in the next few years.

The majority of buyers of UK farmland are currently British (85%). Overseas buyers have not yet returned to the market in their pre-recession levels.