English farmland market’s upward trajectory continues

Prices hit all time high as demand continues to outstrip supply

“Farmland prices in England rose by 4% in the first quarter of 2011 to an all time high of £7,900 per acre, showing the strength of the market compared with others, like the housing market, which is still weak”, says Dr Jason Beedell, Head of Research at Smiths Gore.

Both bare and equipped markets strong

At the end of the first quarter, bare land values averaged £5,600 per acre – up 5% on the previous quarter, whilst equipped land averaged £8,600 per acre – up 4% - another all time high. Both bare and equipped land values have now recovered from the dip which followed the peak of the market in 2008.

Supply mirrors 2010

“Prices are still rising due to strong demand, from both farmer and non-farmer buyers, and the continuing low supply of land for sale”, says Giles Wordsworth, Head of Farm Agency at Smiths Gore. Just over 16,000 acres were marketed in January to March, the same as last year. But the constricted supply is more obvious when you look at the amount for sale in the six autumn and winter months:

Land for sale in England between September and March

acres 2007/08 40,500 2008/09 38,500 2009/10 27,300 2010/11 26,000 Source: Smiths Gore “You also appreciate just how small the market is when you look at individual regions, let alone counties. There have been only two blocks of land over 50 acres for sale in the whole of the North East since Christmas”, says Jason Beedell.

All farms

92 farms and parcels of land over 50 acres were marketed in 1Q2011. This is comparable with the same period last year (86 farms) and 48% more than during the equivalent period of 2009 (62 parcels marketed). 16,100 acres were marketed in 1Q2011, which is equal to 1Q2010, and more than 1Q2009 when 13,700 acres were for sale.

Equipped farms (Farms with buildings)

60 equipped farms were marketed in 1Q2011, compared with 56 in the same period in 2010. Slightly less land was marketed (11,300 acres) than during the first quarter of last year (11,700). The area marketed was also comparable with 1Q2009 when 11,100 acres were brought to market. Average unit size this quarter was 188 acres, smaller than the 208 acre average for 2010.

Bare land 32 parcels of bare land were marketed in 1Q2011, which is more than the same period in 2010 (30 properties). 4,900 acres were marketed in 1Q2011, 9% more than in 2010 (4,500 acres).