Tricky terrain: The UK farmland market

Despite a substantial amount of UK farmland coming to market in the last quarter, year-to-date supply is 16 percent lower than at the same time in 2016, according to Savills, the estate agent. Taking a longer lens, even Q3 was disappointing, at more than a quarter below the 10-year average. For 2017 to finish on par with typical deal volumes achieved over the past decade, Q4 would have to be 70 percent above its usual performance – a “doubtful” prospect, if only because of a tendency for more transactions in the first part of the year, Savills noted in recent research.

Values did not give more reasons to be optimistic, with pricing across land of all types down 2.2 percent year-to-date and 1.3 percent from the previous quarter. The current average value of £8,956 per acre for UK prime arable land is now 9 percent below its 2014 peak.

Fortunes contrasted across regions, however. In terms of pricing, the East Midlands took the biggest hit, with values falling 4.6 percent. Volume wise, Wales suffered most from the slowdown – down 47 percent year-on-year – with a more modest contraction in Scotland and England. Within England, differences persisted, with a 30 percent drop recorded in the South East and West but a 65 percent year-on-year increase in the West Midlands.