Data from the latest Carter Jonas Farmland Market Update shows that the average farmland values in England and Wales fell slightly in the second quarter of the year, as potential buyers become increasingly cautious.
Arable land values fell by 1.1% to £9,700/ac compared to the first three months of the year, while pastureland declined by 0.7% to £7,900/ac. Carter Jonas states that this is due to several factors and is not true in all areas, with values varying between postcodes.
Andrew Chandler, head of rural agency, said the data suggested an easing in buyer appetite for some assets. “There remains healthy levels of demand for prime assets with prices often being achieved ahead of expectations, particularly when there is interest from local farmers and investors looking to expand their operations and in locations with a strong rollover buyer presence.
“Other assets are being approached with hesitancy. As a result, the gap between prime and secondary or tertiary land has widened further.”
The volume of new, publicly marketed land picked up in the second quarter, which has led to downward price pressure in some areas, and the pipeline is predicted to remain steady in the coming months.
“Rather than one main factor driving the increase in supply, a combination of mounting pressures is prompting some farmers and landowners to review their business strategies and financial position, sometimes leading to a decision to sell,” says Sophie Davidson, research associate at Carter Jonas.
“Volatile commodity markets, increased employment costs, the effects of climate change, impending inheritance tax changes and ongoing adjustments to the policy landscape are other factors that could have an impact.”
The company advises both buyers and sellers to proceed with care and clarity, with over-pricing likely to disadvantage an asset and reduce interest. Buyers should likewise stay well-informed.
“Where land offers strong long-term potential, there are still opportunities – but careful due diligence and a clear understanding of current risks are essential,” Andrew said.
