Bank reviews could encourage sales of off-lying parcels of land and be motivation for the sale of farms as pressure on commodity prices drives farmers from the industry. Other sellers may be tempted to take their land profits on purchases made before 2006.
Whilst agricultural land values increased by 2.5% (Q1-Q3) this year, 2015 witnessed the lowest rate of increase since 2009, indicating that now could be the time for owners to take profits and recycle their capital.
Investment buyers driven by opportunity rather than location are still very active, creating pockets of activity that can see vastly different values in land sales only 10 miles apart.
Investors are not necessarily bad news for local farmers. While they add competition, great news for all those who own their holding, they invariably do not farm the land themselves so create opportunities for innovative contractors or opening the gate to farm business tenancies.
During 2015, Carter Jonas has dealt with 32,900 acres, both on and off the open market, with many of those sales made possible by our management teams negotiating deals to obtain vacant possession of farms prior to sales.
Across the whole of the UK, buyers are both less numerous and more focused to the investor or rollover purchaser. The farmer purchaser is less visible and tends to focus on the 50 to 200 acre blocks either over the hedge or at least quite close by. “Off market” activity remains very strong thanks to robust demand for trophy assets.