Farmland values in England rose modestly during 3Q2013 with bare and equipped land increasing by just 1%. Equipped farms are now averaging £10,300 per acre while bare land values are hovering around £7,200 per acre.

30% more land was marketed in 3Q2013 compared with the same period last year. While we may be witnessing a return to a more ‘normalised’ market, given the severe shortage in supply last year, there is some anecdotal evidence which suggests that landowners may be concerned about the potential effects of the CAP reform, (albeit the reform appears more benign than we originally thought) with support for agriculture set to continue but at reduced rates; the threat of capital taxation on land if there is a change of government and landowners wanting to capitalise on the high values still being achieved for prime farmland.

More than double the supply of bare land was available on the market compared with a year ago with 8,900 acres being marketed against 4,100 in 3Q2012; there was also a more ready supply of equipped land available with 26,700 acres publicly marketed compared with 23,400 acres this time last year.

The increase in supply was to be expected, given the paucity of land that was marketed in 2012 and therefore comparisons with 2010 and 2011 are more insightful and, while we can see that the volume of land is similar to these two years, the rate of increase in values has not been as quick. Relative to 2010 and 2011, 16-17% less land was marketed in 3Q2013, however we expect the total amount of land marketed at the end of the year to be  on a par with 2010/2011 figures.

 
Dr Jason Beedell, Head of Research at Smiths Gore,  comments: “Despite the relative increase in supply, large blocks of land continue to be a rare commodity; only three properties over 750 acres were marketed in the last quarter – one arable farm and two mixed farms. Only 5 dairy farms were publicly marketed, of which only two were over 250 acres.”


Regional variations continue to exist with South Central and the South West marketing the most farms.  The South East is the most ‘inactive’ area of the farmland market with only 12 farms being publicly marketed with a total acreage of 1600.


Detailed figures for Q32013

All farms
201 farms and parcels of land over 50 acres were marketed in 3Q2013, which is higher than the number marketed during the same period of 2012 (152) and 2011 (185).

The amount of land for sale in 3Q2013 was higher than in 2012. 35,600 acres have been marketed so far in 2013 compared with 27,400 acres in total in 2012. However, there was 16% less land available in 2013 than in 2011 when 42,200 acres were marketed in this period.

Equipped farms (Farms with buildings)
128 equipped farms were marketed in 3Q2013, compared with 116 in 2012 and 136 properties in 2011.

The area of equipped land marketed during 3Q2013 was 26,700 acres, 14% higher than in 2012 (23,400 acres) and 20% lower than in 2011 (33,500 acres).

Bare land
73 parcels of bare land were marketed in 3Q2013, the number of bare properties has increased considerably compared to recent years as 36 were marketed in 2012 and 49 in 2011.
8,900 parcels of bare land were marketed in this period, a 119% increase on 2012 (4,100 acres) and similar to 2011 (8,700 acres).

Predictions
Jason adds: “The stability of land as an asset class has not gone unnoticed by investors, particularly in light of the economic turmoil which has heavily impacted the returns of other property related asset classes. According to our Smiths Gore Farmland Market Model, we are expecting a 7% rise in values this year which is hardly suprising considering investors are unlikely to exit an asset class that continues to show both positive capital and income growth.”