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George Alder MRICS FAAV, partner and head of farm agency, discusses the 2023 market so far and touches on some notable auction sales from this year.
Despite some unseasonal weather this year, farms and land within the South West have continued to remain popular with buyers, whether they originate from the wider UK and abroad or are more locally based.
Farm buyers have remained confident and keen to make a purchase in order to either expand their current holdings, invest rollover funds, relocate to a larger farm, or even become a farmer for the first time. One noticeable trend has been that purchasers of larger farms, and farms with houses and barns in tiptop condition, have seen strong interest and competitive bidding. Properties requiring improvement and modernisation are still in demand, but due to the increased cost of building materials, buyers are carrying out more detailed research before deciding where to pitch their offer.
So far in 2023, we have seen a greater number of smaller farms come to the market with just over 75% having been either sold or sale agreed to a total value of £18 million.
Agricultural land continues to achieve fantastic results and whilst values are at an all-time high, location still remains key. We at Stags have an in-depth understanding of local market conditions, who the active buyers are, which farm businesses are expanding, and whether a particular area is likely to have a prevalence of rollover funds.
Using this knowledge allows us to provide accurate pricing advice and in a market which is more price sensitive than it was, due to increased costs of borrowing, this knowledge can be the key to achieving the best possible sale price. To date this year, we have sold and agreed just over 2,000 acres with the average price currently standing at £11,398 per acre.
Smaller land parcels continue to achieve a premium in all areas of the West Country. This has been particularly evident in some recent auctions with many sales selling well in excess of their guide prices. Some examples of this include:
Looking ahead, Stags Farm Agency have farm and land instructions which we are preparing to bring to the market and we expect supply for the rest of the year to remain tight.
How will farm and land values perform going forward? This is a difficult question to answer, but the contrasting views are that, with higher interest rates and higher input costs, we could be seeing the land market reaching its peak with buyers becoming more cautious. Alternatively, the lack of supply may result in farms and land continuing to hold their value.For up to date advice on the farms and land market contact Stags Farm Agency on 01392 680059 - email@example.com or 01872 264488 - firstname.lastname@example.org