A number of the UK’s top land agents have said that the price of agricultural land is likely to remain steady throughout 2017, despite the uncertainty of domestic and international events.
A representative from Strutt & Parker recently revealed in an interview with leading publication, Farming UK, that the impact of the Brexit vote had been negligible.
“Brexit’s biggest impact was to cause uncertainty, which did result in a slowdown in the amount of land coming forward over the first nine months of the year. However, there was resurgence in the last quarter,” said Strutt & Parker.
“The big story in the farmland market has continued to be the impact of the squeeze on farm profits as a result of low commodity prices.
“With around half of all farmland transactions being “farmer-led”, it is not surprising that as farm incomes have dropped, so have average land prices. Arable values are averaging 4 per cent lower than a year ago.
“An improvement in commodity prices, due mainly to the weakening of sterling, may well have a positive effect on land prices going forward.”
Research from Knight Frank’s Scottish Farmland Index seems to reflect this and showed that average arable land prices during the last quarter of 2016 matched those sold in the same period in 2015.
“The market in the second half of last year remained relatively resilient thanks to a lack of supply versus strong demand,” said Knight Frank’s head of Scottish farms, Tom Stewart-Moore.
However, when interviewed by the publication Savills said the average value of all types of farmland across Great Britain would ‘remain under some pressure’ due to debt within the industry.
Savills rural associate, Jamie Wedderspoon added: “The longer term outlook for land value remains very positive, with values forecast to grow by 5.5 per cent across the UK over the next five years.
“In the short-term, the downside of Brexit on farmland values is likely to be muted. The weak pound creates a favourable buying environment for overseas buyers and this, along with the potential reduced supply driven by uncertainty, will help support farmland values.”