'Burst of activity' in English land market misses livestock farms

21.04.2017

Livestock farms have been left behind by a "burst of activity" in the English farmland market which, in clearing a backlog of unsold properties, has fuelled some revival in values of arable operations.

Strutt & Parker reported a "flurry" of deals since Christmas, which has reduced a "significant carryover" of land left over from 2016, after a busy end to the year for farms coming to market.

Indeed, more than 40% of English farms put up for sale in 2016 were still unsold at the end of the year, "a far higher proportion than we have seen before", the land agency said.

However, a "considerable amount of this has now gone under offer", said Michael Fiddes, head of estates and farm agency for Strutt & Parker.

About 25% of land marketed in the first three months of 2017 "also looks to have found a buyer".

'Buyers are more cautious'

However, despite the "burst of activity", the agency also flagged that "it is now taking longer to get sales to the point of completion".

"Buyers are being more cautious than they were when there was greater competition in the marketplace," Mr Fiddes said.

Furthermore, some livestock farms, and those with a high proportion of their value wrapped up in houses, were proving relatively tough to shift.

"Our analysis also shows that over half of the livestock and residential farms put on the market last year are still available or have been withdrawn, which is a higher proportion than for other types of farms," Mr Fiddes said.

The comments come against the backdrop of a UK housing market which Rics, the chartered surveyors' group, said in a much-watched briefing last week "continues to lack impetus, with new buyer enquiries and agreed sales stagnant".

Price outlook

However, Strutt & Parker, in cropland, flagged some improvement in prices in the January-to-March period, as measured by sales values, putting the average at £9,800 an acre.

That represents a £300-an-acre rise on the average price achieved in the October-to-December period, although remains below the high of £10,700 an acre reached in the April-to-June quarter of 2015.

On prospects, the land agency said that while supplies of land for sale may increase again, they were "unlikely to exceed those seen in recent years".

"This is likely to support prices, although undoubtedly a wide range in values will continue to be achieved dependent on location," Mr Fiddes said.

"Overall the market remains pretty resilient given the uncertainties associated with Brexit."
    


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