The average value of English farmland reached £9,800 per acre during 4Q2013. It rose 9% in 2013, compared with 4% in 2012.

Equipped land (land with houses and buildings) values rose by 5% in the final quarter and by 12% throughout the year, ending 2013 at an average of £10,800 per acre.  Values will have been boosted by the recovery in house prices, which spread across the whole country.  Another factor is that smaller farms were being sold, which tend to have higher values per acre.  The average size of equipped farms marketed was 145 acres, the smallest we have recorded since our survey began in 2007.  For comparison, it was 193 acres in 4Q2012.

Bare land averages £6,900 per acre, having fallen 2% in the final quarter, and has risen by 2% since the start of the year.

Farmland has been a good investment through the recession.  Since January 2008, bare land values have increased by 90% and equipped values by 38%.  Since the start of 2010, bare land values have increased by 48% and equipped values by 51%.

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Land availability recovers

Over 120,000 acres of land were marketed during 2013, up 34% on the record low of 90,600 acres in 2012.  Over the last five years, between 110,000 to 130,000 acres have been usually marketed each year, so supply has returned to levels that are more normal.

There was a large increase in the amount of bare land for sale, with the 26,500 acre total for 2013 being a 51% increase on the area available in 2012.

Dr Jason Beedell, Head of Research at Smiths Gore, comments: “Despite the increase in supply, large blocks of land continue to be rare.  Only one property over 750 acres was marketed in the last quarter and only 15 in the whole year, which is the same number as in 2011 and 2012.”

Outlook

“Now that the EU has reached agreement on the latest Common Agricultural Policy reform, an element of uncertainty has been removed from the land market. Our previous analysis has shown that the amount of land for sale reduces before a reform of the Common Agricultural Policy, and we saw it again with the historic low in 2012. It is now up to the Member States to decide which elements of the reformed CAP they are going to implement and crucially how.

In England, Defra has already made its preferences clear, and so we would not expect developments over the coming months to have an impact on the land market.  An exception could be Upland areas, as there are proposals to significantly increase their CAP funding, which you would expect to translate into increased land values; however, the situation is not that simple as funding for upland environmental schemes is likely to reduce”, notes Dr Jason Beedell, Head of Research at Smiths Gore.

Land availability by region

The South Central and South West regions continue to be the most active and the North East the least active, with only one farm being publicly marketed during Q4.

Detailed figures for 4Q2013

All farms

98 farms and parcels of land over 50 acres were marketed in 4Q2013, which is higher than the number marketed during the same period of 2012 (69) and 2011 (70).

The amount of land for sale in 4Q2013 was higher than in 2012. 13,100 acres were marketed in 2013, compared with 11,400 acres during the same period of 2012 and 13,200 in 2011.

Equipped farms (farms with buildings)

61 equipped farms were marketed in 4Q2013, compared with 44 in 2012 and 50 properties in 2011.

The area of equipped land marketed during 4Q2013 was 8,900 acres, 4% higher than in 2012 (8,500 acres) and 15% lower than in 2011 (10,400 acres).

Bare land

37 parcels of bare land were marketed in 4Q2013, so a significant increase on the 25 marketed in 2012 and 20 in 2011.

4,200 acres of bare land were marketed, a 45% increase on 2012 (2,900 acres) and 48% higher than 2011 (2,800 acres).