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Farmland sales surge as Brexit concerns grow

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The volume of farmland being publicly marketed in the East of England has increased almost three-fold in the first nine months of this year raising concerns that Brexit is prompting some landowners in the region to sell-up.

Figures from Strutt and Parker show some 30,000 acres of farmland has been publicly marketed in the first three quarters of 2018, compared to 11,100 acres in the same period in 2017. Across England, more land has been publicly marketed than at any point in the past 10 years, according to the agent; some 96,600 acres in the first nine months of which 50,000 acres has hit the market in the past three months.

Michael Fiddes, head of estates & farm agency for Strutt & Parker, said: “We’ve gone from very tight supplies earlier in the year to a position where we’ve seen more land put on the open market than at any point in a decade….. There have been more farms for sale in the East of England, including six larger than 1,000 acres (compared with two in 2017).  He said it was too early to say whether this increase in land supplies was a trend or a blip. Underlying factors which have always led to sales –  death, debt and divorce – were still as relevant as ever.“ That said, the prospect of Brexit does seem to have acted as a prompt for some landowners to reflect on their long-term future in land ownership.”

He added: “Farm profitability is just one of a number of factors affecting farmland values and while the removal of direct payments will have a significant impact on farm incomes, profitability will also be affected by post-Brexit trading arrangements which are yet to be agreed. In addition, we don’t know at this stage how the drop in direct payments might be offset by a new environmental support system.”

Arable land sold in 2018 has averaged £9,500/acre, similar to 2017 and 2016. Overall, the firm said demand is patchy, with a third of the farms marketed in 2017 still available or withdrawn, but the farms that are selling, sell well with most achieving their guide price or more.

Agriculture Bill

Mr Fiddes said following the publication of the Agriculture Bill, questions were inevitably being asked about its possible impact on long-term values. “In our view, there are still so many uncertainties it is too soon to come to any firm conclusion.

“We’ve already had two years of uncertainty and on the whole land prices have held up remarkably well. As we approach the implementation of a new British Agricultural Policy we expect this to remain the case and there to be a continuing wide variation in prices achieved.

“Farmers may be less willing to commit to purchasing land, especially on borrowed money, and it is possible that in commercial farming areas the quality of the land may become more important to buyers than it is now.

“However, there has never been a direct correlation between farm profitability and land prices. This is because there have always been people who buy land for lifestyle or tax reasons and there continues to be a good demand from money made outside agriculture.”

Last Updated ( Wednesday, 24 October 2018 07:58 )