Supply

Just short of 176,500 acres of farmland were publicly marketed across Great Britain in 2015. This was an increase of 24%, or an additional 34,000 acres, compared with 2014.

Across England, market activity increased by 16% to around 120,000 acres with a clear divide between the eastern and western regions of the country (see Figure 1).

Increased supply was recorded in the eastern regions, most notably in the East Midlands where 19,000 acres were publicly marketed. In contrast, reduced supply was recorded down the western side of England, most notably in the West Midlands where less than 10,000 acres were marketed in 2015.

Just over 12,000 acres were publicly marketed in Wales during 2015, 32% higher than in 2014 but at a similar level to 2013.

Almost 44,000 acres were publicly marketed in Scotland in 2015 compared with 30,000 in 2014; an increase of 47%.

Our analysis of farm transactions across Great Britain, where Savills acted for the buyer or seller, continues to show the range of motives amongst buyer and seller remains diverse (see Figure 3 below).

^{Source: Savills Research}

Sellers

Our research of seller profiles in 2015 shows that:

■  Farmers were sellers in 50% of all transactions. This is the highest level for seven years and reflects the pressure on commodity prices and the weak short-term outlook for agriculture.

■  26% of all sellers in 2015 cited retirement as the predominant reason to sell, which was the highest level for seven years. However, 40% of farmers who were selling cited retirement as the reason to sell. Evidence suggests some farmers, especially those without successors, took advantage of high land values to retire.

■  Across all sellers (farmers and non-farmers) the proportion selling for debt-related reasons was just below 20%. As Figure 2 shows, this is one of the highest levels for many years despite base rates of 0.5%. This proportion is comparable to the years when base rates were around 5% and not significantly less than the 25% recorded in the years after base rates touched 15%.

■  Debt was a significant issue for farmers, with 30% giving debt related reasons as the primary reason for selling.

■  Relocation was given as the motive to sell in 22% of all transactions and investment elsewhere in another 24%.

Source: Savills Research

Buyers

Our research of buyer profiles in 2015 shows that:

■  Farmer buyers in 2015 represented 43% of all buyers, which was the lowest proportion of the market since 2003 reflecting a much more cautious sentiment to acquisition. Three-quarters of farmer buyers gave expansion as a reason to buy.

■  Non-farmers, new and existing, represented 47% of all buyers in 2015.

■  The proportion of non-farmers (lifestyle) who are buying for the first time was 16%. This was lower than the 23% recorded in 2014 but back to a similar level recorded in 2013. This suggests more caution amongst this sector of buyers who may not be familiar with owning and managing land.

■  Institutional and corporate buyer activity accounts for around 10% of transactions, which is similar to historical levels.

■  Residential and sporting as a motive to purchase farmland was given by 21% of all buyers – the lowest level for five years – and reflects the reduced activity of new non-farmer buyers. Existing non-farmers are buying to expand their holdings (reflected in Figure 3).

■  Cash, in almost 80% of transactions, remains the predominant source of purchasing funds. This includes rollover proceeds, which was the source of funds used by 7% of buyers. We expect this to increase as post recession development activity increases.

Source: Savills Research