Market Intelligence Report
English farmland market review 2012 Values rose to record levels for bare and equipped land Record low amount of land for sale
All figures in this review, from Smiths Gore’s research department, are from our comprehensive database of all sales of publicly marketed farmland in England over 50 acres; they exclude sales where the residential value of the sale is greater than 50% of the total. Therefore all figures are transaction-based, not opinion based.
smithsgore.co.uk
January - March
April - June
Values flat as market remains quiet
Fewer sales in traditionally the most active quarter
All land The all land price rose by 1% to £8,800 per acre.
All land Values rose 2% to £8,900 per acre. But this overall figure hides the difference in performance between bare and equipped land.
Equipped land Values remained at an average of £9,500 per acre. Bare land Values stayed around the £6,000 per acre mark.
Equipped land Values rose by 1% to £9,600 per acre, up 1% since the start of the year and have risen for 11 consecutive quarters. Arable values are rising faster than livestock ones.
Supply Market activity is always low in the first quarter of the year and the amount for sale has been consistently low in the last three years.
Bare land Values rose by 5% to £6,300 per acre, up 6% since the start of the year and so have risen for 10 quarters in a row.
You can really see the lack of land for sale when the figures for specific farm types in specific areas are looked at:
The stronger performance of bare land is not surprising as farmer buyers, who continue to dominate, look to expand their farming operations but not take on residential property.
Number of farms for sale
Number of farms for sale over 250 acres
Dairy farms in North West and North East England
3
3
Arable farms in the South East
2
0
Livestock farms in the West Midlands
4
0
All types of farm over 1,000 acres
1
n/a
Land for sale in England in 1Q2012
Supply Only 35,900 acres were marketed, compared with 57,100 acres in 2011, 52,800 in 2010 and 57,600 in 2009. The reduction is almost entirely due to 41% less equipped land being marketed. Demand The evidence of a two-tier market which we reported at the end of 2011, where quality land in desirable farming locations continues to sell well but poorer land in less desirable locations is struggling to find buyers, continues to build. This makes quality of marketing even more important.
January – March 1Q
April – June 2Q
July – September 3Q
October – December 4Q
£8,800
£8,900
£8,900
£9,100
% change since previous quarter
+1%
+2%
0%
+0%
% change since start of 2012
+1%
+3%
+3%
+5%
% change in previous 12 months
+11%
+9%
+6%
+5%
£9,500
£9,600
£9,500
£9,700
% change since previous quarter
0%
+1%
-1%
+0%
% change since start of 2012
0%
+1%
0%
+3%
% change in previous 12 months
+9%
+7%
+3%
+3%
£6,000
£6,300
£6,600
£7,000
% change since previous quarter
-1%
+5%
+4%
+6%
% change since start of 2012
-1%
+6%
+10%
+17%
% change in previous 12 months
+8%
+12%
+13%
+17%
Land for sale in England - All land
16,200
35,900
29,300
11,300
Amount for sale since start of 2012
16,200
51,800
81,400
90.500
-2%
-30%
-29%
-30%
Land for sale in England - Equipped farms
12,400
28,800
24,700
8,700
Amount for sale since start of 2012
12,400
41,100
65,900
73,200
+7%
-32%
-30%
-30%
Land for sale in England - Bare land
3,800
6,900
4,600
2,600
Amount for sale since start of 2012)
3,800
10,700
15,300
17,300
% change in amount for sale since start of 2012 compared with 2011
-23%
-17%
-29%
-29%
Average price in England - All land
Average price in England - Equipped farms
Average price in England - Bare land
% change in amount for sale since start of 2012 compared with 2011
% change in amount for sale since start of 2012 compared with 2011
July - September
October - December
Values break the £9,000 barrier for the first time
Year ends with historic high values and historic low supply
All land The all land price broke the £9,000 barrier, as we predicted, but then dropped back slightly to £8,900. Values have risen by 3% since the start of the year and by 6% in the last 12 months.
All land The average price climbed to £9,100 per acre in 4Q2012, up 5% in 2012. For 2013, our statistical model of the market estimates that values will rise 7%, however, this may be bullish and the rise could be lower. We expect bare values to increase faster than equipped.
Equipped land Values dropped back £100 per acre to £9,500, level with the start of the year. We stated that the market may have reached a natural threshold in terms of values for equipped land but this will only be tested once more land becomes available. Bare land Values rose by 4% to £6,600 per acre. Supply Only 29,300 acres were marketed, 30% less than in the same period last year. Less than 100,000 acres could be marketed this year, the lowest amount ever. We expected less to be sold in 2012 as the amount of land for sale before a CAP reform always drops. Demand Farmers remain the dominant buyers and are competing strongly for bare land. As most bare land sales are for smaller areas than equipped farms, more farmers can raise the capital to bid for them, so there tends to be more competition. There is growing evidence that availability of capital is affecting the market.
Equipped land Values are £9,700 per acre, an historic high, up 3%on 2012. Bare land Values rose by 6% to £7,000 per acre, also a record high, up 17% in 2012. Supply Just over 90,000 acres were marketed in 2012, a record low level. This is 30% less land sold than in 2011. In 2013 we expect less than 100,000 acres for sale as there are few forced sales and landowners wait to see the detail of the CAP reform, which looks more benign than at first. Demand Market fundamentals have not changed - the amount of land to buy is still small and demand from farmers, in most places, remains strong. Local demand is the key and can make up to £2,000 an acre difference. There is a two-tier market with the demand for and price of best quality land being well supported. Poorer quality land is attracting fewer bidders and is being negatively affected by lack of finance for some buyers. We expect this to continue into 2013. Farmer buyers will also be less enthusiastic about units with significant residential value so we are more positive about the outlook for bare land compared with equipped.
Area of English farmland marketed Acres
£/Acres
English farmland values
Number of equipped farms and bare land units for sale in England in 2012 The lack of land for sale is demonstrated when we look at the types of farm for sale by region. Arable
Dairy
Farm Size*
S
M
L
Total
S
East Midlands
33
6
1
40
1
East of England
30
16
2
48
North East
3
1
L
Total
S
1
21
1
11
3
5
North West
9
South East
14
6
1
21
South West
11
4
1
16
4
West Midlands
17
4
1
22
1
Yorkshire and The Humber
21
5
Grand Total
138
41
* Farm size
M
Livestock
9
S = Small <250ac
3
5
8
3
185
9
M = Medium <750ac
9
L
4
Total
Total
S
M
L
Total
21
4
3
2
9
71
11
10
2
1
13
73
9
3
2
1
6
18
34
4
38
5
1
6
61
27
2
29
20
6
26
76
7
52
4
57
17
5
22
102
1
22
22
6
2
2
10
55
18
3
1
3
7
51
205
68
22
9
99
507
26 6
M
Mixed
18
17
1
189
15
1
1
L = Large >750ac
Contacts Our regional farm agents would be pleased to give you more information about the land market in your region or county. Please do not hesitate to contact them: National Head of Farm Agency
Giles Wordsworth
Oxford
01865 733302
Northern England – Head of Farm Agency
Sam Tydeman
York
01904 756303
North East North West Yorkshire and Humber West Midlands East Midlands
Iain Welsh Simon Waller Sam Tydeman Ed de Lisle Luke Humphries Andrew Teanby
Darlington Clitheroe York Lichfield Peterborough Lincoln
01325 370500 01200 411052 01904 756303 01543 266407 01733 559322 01522 539555
Southern England – National Head of Farm Agency
Giles Wordsworth
Oxford
01865 733302
East of England South East and South Central South West
Bennett Swayne David Slack Giles Wordsworth Harry St John Simon Derby Toby Perry
Newmarket Maidstone Oxford Oxford Taunton Exeter
01638 676748 01732 879053 01865 733302 01865 733304 01823 445036 01392 294891
Wales
Charles Orr-Ewing
Sennybridge
01874 636868
Scotland – Head of Farm Agency
John Coleman
Edinburgh
0131 3440881
Southern Scotland Northern Scotland
John Coleman Kay Paton Jamie Watson
Edinburgh Dumfries Fochabers
0131 3440881 01387 274394 01343 823005
If you have any questions about this review, please contact Dr Jason Beedell, Head of Research, on 01733 866562 or jason.beedell@smithsgore.co.uk