Soggy but bouyant
Dripping wet it may be after the heaviest rainfall on record in England but the farmland market is still apparently bouyant, according to propety agents.
According to agents Savills, Bedfordshire farmland rose in value in 2012 and it expects that trend to continue into 2013 and beyond.
One of the key factors behind rising prices relates to the law of supply and demand. There is a dwindling supply of farmland available to buy, forcing prices up, says Savills.
Notable sales in Bedfordshire in 2012 include a 295-acre farm at Langford which sold, after competitive bidding, for something like 23 per cent above its guide price achieving around £9,500 per acre.
Another 263 acres about 10 miles away at Haynes West End, with a guide price of £7,200 per acre, was purchased by Savills on behalf of a retained client.
Investors recently purchased a 542 acre farm near Milton Keynes, which Savills was marketing privately, and due to competitive bidding paid significantly above the guide price of £7,380 per acre.
Catherine Scandrett, of Savills’ regional office in Cambridge, said: “There continues to be a real thirst for good quality blocks of arable land from a wide range of buyers and the biggest issue is the lack of supply.”
She said for other land types buyers are increasingly discerning. Savills finds putting a house and a few acres together in a separate lot from the ‘bare land’ is ‘the most successful route to maximising a sale.’
In terms of supply, volume is down by 25 per cent in England with the most significant falls recorded in the eastern side of the country. In the East of England, including Bedfordshire, Savills says volumes fell by 28 per cent.
Prime arable land values rose by 4 per cent for the first three quarters of 2012 to average £7,700 an acre. However, as much as £11,000 an acre is being achieved in some cases in Bedfordshire and the surrounding counties.
This increase is lower than the 7 per cent recorded across Great Britain as a whole where prices reached an average of just under £7,200 an acre. Whilst demand is still strong it may be a sign that prices are reaching a ceiling in the east.
Savills believes prices may be reaching a ceiling after seven years of gains.