Market Intelligence Report
Review of the English and Scottish farmland market April – June 2013 57% more land marketed but don’t get too excited as last year was a historic low and the market is returning to more normal levels Values continue to rise
Key points: • The average price rose by 4% to £9,500 per acre in England and £XXX in Scotland • Both bare and equipped land values remain at historic high levels • Over 50% more land was marketed compared with this period in 2012 but it is a case of supply returning to normality as 2012 was historically low. • Scarcity of land for sale remains the main driver of the price rises, despite the supply rise
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 and Scotland 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 based on opinion like other firms’, apart from the Scottish and regional values which are from our regional farm agents.
smithsgore.co.uk
Scotland – John Coleman
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North East – Iain Welsh
Both bare and equipped land values continue to rise
Over 50% more land was marketed this Spring compared with 2012 in what is traditionally the busiest period for farmland market activity. The increase in supply looks dramatic but, if we look over the past seven years, it is clear that it is more a case of supply returning to normality. In six of the last seven years, 50 – 60,000 acres were marketed in the second quarter. The 35,800 acres in 2012 was an exception. The rise is due to landowners deciding to sell in response to last year’s strong prices and low supply.
Land for sale in England
2Q2013
(acres)
Bare land Equipped farms All land
7,900 48,200
56,100
2Q2012
The average value of English farmland rose to £9,500 per acre. It has risen by 5% since the start of 2013 and by 6% over the past 12 months. Bare land values rose to £7,100 per acre, up 3% since the start of 2013 and by 12% over the past 12 months. 2Q2013
2Q2012
2Q2011
1Q2013
1Q2012
1Q2011
Equipped land values have risen more than we expected and are now at an average in England of £10,200 per acre, up 5% since the start of 2013 and by 6% over the past 12 months.
Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
North West – Simon Waller
Yorkshire and Humber – William Douglas
(% change in last 12 months)
Average price in England (£/ac)
6,900 (16%)
Bare land
2Q2013
2Q2012
(% change since 1Q2013)
(% change in last 12 months)
£7,100 (+1%)
1Q2013
£7,000
£6,300 (+12%)
28,900 (67%)
35,800 (57%)
Area of farmland marketed in England - Q2
2Q2013 2Q2013
2Q2012
Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
2Q2012
Equipped farms
All land
£10,200 (+4%)
£9,500 (+4%)
£9,700
£9,100
2Q2011
2Q2013
2Q2012
2Q2011
Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
South West – Simon Derby
East of England – Sam Tydeman
Area of farmland marketed in England
Farmland values in England 2Q2013
2Q2012
2Q2011
Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
Smiths Gore offices 2Q2013
2Q2012
2Q2011
2Q2012
2Q2011
Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
South Central – Giles Wordsworth
South East – William Banham
2Q2013 Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
2Q2012
2Q2011
£9,600 (+6%)
£8,900 (+6%)
At the risk of sounding like a broken record, the market fundamentals that are driving prices up have not changed – there is too little land for sale to meet buyer demand, which remains farmer-led.
Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
The area of equipped land marketed has increased 67%, compared with a 16% increase for bare land. In response to demand for commercial arable acres, we are increasingly seeing equipped holdings coming to market where the farmhouse has been retained and only the land and modern buildings are being offered for sale.
2Q2011
East Midlands – Luke Humphries
West Midlands – Ed de Lisle
2Q2013
2Q2012
Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
2Q2011
NB The regional bare and equipped values quoted are based on the opinions of our farm agents; the data on number and acreage for sale 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. All data is for 2Q.
2Q2013 Bare arable (£/ac) Bare pasture (£/ac) Equipped (£/ac) Number of farms for sale Total area for sale (ac)
What scarcity looks like You can see the real scarcity when you try looking for a particular type and size of farm. For example, there were only five arable farms over 750 acres marketed in the whole of England and only seven livestock and mixed farms. Bare land
Equipped farms
Small <250ac
Medium <750ac
Large >750ac
09Q2
60
9
0
10Q2
63
9
0
11Q2
47
6
1
Bare Total
Equipped Total
Grand Total
220
289
Small <250ac
Medium <750ac
Large >750ac
157
48
15
72
170
66
10
246
318
54
190
81
10
281
335
69
12Q2
44
6
1
51
112
47
12
171
222
13Q2
84
4
0
88
211
58
12
281
369
If you then look for farms locally â&#x20AC;&#x201C; or even if your region â&#x20AC;&#x201C; the numbers get even smaller. One way to get the land you want is to buy off-market, which means buying land that is not publically marketed. Although only accounting for a small proportion of the market, it is becoming increasingly common, using an agent, like Smiths Gore. Number and area of all land marketed per region All farms (Quarter 2) East Midlands
East of England
North East
North West
South Central
South East
South West
West Midlands
Yorkshire & Humber
England
Number of farms for sale 2Q11
36
26
6
23
35
22
62
27
23
260
2Q12
19
25
4
23
31
7
23
10
17
159
2Q13
27
37
10
21
58
25
56
27
32
293
Total area (acres) 2Q11
10,300
8,000
1,400
3,600
7,800
4,300
10,300
5,900
5,600
57,000
2Q12
4,300
6,000
900
3,600
6,900
1,600
6,600
1,400
4,500
35,800
2Q13
4,400
6,200
6,700
2,400
13,100
3,600
6,600
7,100
6,000
56,100
Our forecasts for 2013 Average value of English farmland up +7%, according to our statistical model of market. However, this may be bullish and the rise could be lower. We expect bare land prices to increase faster than equipped land. Less than 100,000 acres for sale again as there are few forced sales and landowners wait to see the detail of the CAP reform. The main risk to this forecast is landowners selling at what they believe to be the top of the market.
Contacts Our regional farm agents would be pleased to give your more information about the land market in your region or county. Please do not hesitate to contact them:
Great Britain
National Head of Farm Agency
Giles Wordsworth
London
0207 409 9490
England
Giles Wordsworth Sam Tydeman
London Newmarket
0207 409 9490 01638 676743
Iain Welsh Simon Waller William Douglas Ed de Lisle Luke Humphries Sam Tydeman William Banham Giles Wordsworth Harry St John Simon Derby Toby Perry
Darlington Clitheroe York Lichfield Peterborough Newmarket Maidstone Oxford Oxford Taunton Exeter
01325 370500 01200 411052 01904 756303 01543 266407 01733 559322 01638 676743 01732 879058 01865 733302 01865 733304 01823 445036 01392 294891
John Coleman
Edinburgh
0131 344 0881
North East North West Yorkshire and Humber West Midlands East Midlands East of England South East South Central South West Scotland
Head of Farms and Estates Agency Team