Farmland Market Awaits Spring Changes

Smiths Gore research showed that UK farmland market is on the cusp as both, sellers and buyers are anticipating the direction that the market will take this spring. In previous years, smaller amounts of land were sold between January and March as sellers awaited seasonal changes brought by spring so that farms looked more aesthetical. However, this year only 11,000 acres were sold – 50% less than in 2008. Experts believe that this figure can be explained by a large number of transactions in the summer of 2008, which were followed by falls in the second half of the year. It should also be noted that the size of marketed farms was much smaller than usual. Now both, sellers and purchasers are waiting to see what changes will be brought by spring. However, Smiths Gore research data shows that prices on bare and equipped land have increased since Christmas. At the moment of the research, bare land was priced at £5,100 per acre, while equipped farms cost £7,100 per acre. Unfortunately, the small number of sales transactions on the farmland market does not allow valeurs to say that land prices across the UK remained stable. Research data also showed that although buyers’ confidence has increased since Christmas, they still remain cautious of overpriced land purchases. At the same time, sellers continue to be prudent, which makes experts believe that the stock of marketed land in 2009 will be less than earlier. Smiths Gore estimates suggest that 30,000 acres will be marketed in 2009, compared to 172,000 acres of land marketed in 2008. Reduced market stock and steady demand for land at the right prices is likely to ensure that land values will remain more resilient than other property types.