The farmland market is becoming more finely balanced leading to a greater range in values achieved according to Savills' most recent review of the GB farmland market with sale prices more tightly pegged to local supply and the number of potential buyers.
 
Continuing their long term growth trend values during the first six months of this year increased albeit at a reduced average rate of 0.2%. This conceals some localised falls in prime arable values, where there is now evidence of more price sensitive demand coupled with reduced competition between farmer and non farmer/investor buyers. Average grade 3 grassland values, which in recent years lagged way behind arable values continue to strengthen with an average uplift of 1% during the half year.
 
Meanwhile, 5% more land was publicly marketed in GB compared with the first half of 2014. Almost half of the acres advertised were arable compared with around 30% in the previous four years.
 
Alex Lawson Director Savills farms and estates comments, “ There is evidence of some farmers, especially those without successors taking the opportunity of current record values to exit the industry.”
 
Non-farmer buyers overtook farmers as the principal buyers of land and the proportion of farmers buyers is now at its lowest since 2003. However, of those continuing to buy land the proportion doing so in order to expand their existing businesses is rising and now accounts for the reason behind half of all purchases.
 
Ian Bailey Savills rural research comments, “There are many entrepreneurs still growing their businesses, despite current commodity prices, reflecting the longer term view they take. It also reflects the fact that many farming businesses now produce significant non-farming income which helps spread business risk.”