Farmland in 2010 and predictions for 2011

Andrew Pearce, Head of Rural Agency  at Chesterton Humberts comments:

Over the course of 2010 farms have continued to sell extremely well, both publicly and privately, throughout the south-west, the south and the east in particular.

With the agricultural sector performing well and a limited supply of land on the open market, land prices are continuing to rise. The RICS Rural Land Market Survey reported at the end of June that prices had increased during the first half of 2010 by over 6% and that the average price of farmland at that time was 13,530 per hectare (5,478 per acre), compared to 12,715 per hectare (5,148 per acre) at the start of 2010. In some cases we have seen land achieving in excess of this.

There is a great deal of land currently being sold, most of which is exchanging hands privately or even before it comes to the market. We are estimating that private sales account for at least 25% of the overall market and this will increase as vendors opt for ultimate discretion when it comes to selling an estate, farm or farmland.

Farmers still represent the majority of buyers, either expanding their acreage or looking to relocate to a different part of the country.  Private investors, funds and international buyers are still active in the market.  The Danes and Irish are no longer so prevalent, but buyers from the Middle East have begun to enter the market.

The south-west in particular has been a particularly active area of the country where there is still keen demand for rural properties of all shapes and sizes. We are fortunate to have secured the instruction to sell the Trevarno Estate near Helston in Cornwall, which in all extends to 723 acres and is described as an enchanting agricultural, residential and commercial estate situated in an unspoiled part of Cornwall. The property is guided at 10m and includes a principal house, currently used as offices, a restaurant and shop, exceptional woodland gardens with a large lake, 10 further houses and cottages, traditional buildings with potential for development, 7 mainly arable farms and the potential for an excellent shoot.  The property is already an established visitor attraction with around 80,000 visitors per annum. Interest is coming from both the domestic and international market.

Our predictions for the remainder of 2010 and into 2011 are that prices will continue to rise and the range of prices per acre of Grade 3 arable land will widen, currently it stands at 5,500, to 9,000 depending on the location. Supply will remain limited throughout 2011 unless interest rates increase causing more land to come to the market and we anticipate that commodity prices will remain stable at their current levels.