South West Farms and Land 2022 Review

George Alder, Stags Partner and Head of Farm Agency, examines the farms and land market in 2022 and offers his predictions and advice for 2023.

The farms and land market across the South West continued to perform strongly during 2022. We saw a broad range of buyers including commercial farmers, residential and amenity buyers and an increasing number of non-farmers motivated by environmental, conservation and carbon capture interests. These strong levels of demand have been matched by constrained supply, and this scarcity has helped values across all farms and land types to remain firm. The Stags Farm Agency farms and land database saw average land values of all types of land over 10 acres increase across the South West from £7,471 per acre in 2021 to £8,427 per acre in 2022, an increase of 12.8%. 

George Alder comments “2022 continued to see demand outstripping supply, in particular, fewer commercial farms coming to the market. Of those that did come to the market this year, 88% were sold as a whole, of which 75% of these buyers had cash funds and were not reliant on selling another farm or property. Two of the largest farms sold in the West Country were undertaken by the Stags Farm Agency team, being Huish Barton in West Somerset at a guide price of £6 million and Clannaborough Barton, near Crediton, at a guide price of £7.5 million. Both attracted significant national interest with demand coming from farmer buyers.” 

With fewer opportunities for buyers to invest in agricultural property, we have seen the farmland market continue with confidence, with the key drivers for demand and growth being a combination of:

• Food security becoming a top priority. With the events of the past year making the job of producing food throughout the world much harder, agricultural land is seen as a long-term investment and a safe haven for farmers looking to continue to reinvest in agriculture and where possible, expand. 
• Demand for bare land is higher than it has ever been, and we have seen a broad range of buyers looking to buy land for tax reasons, protecting and preserving wealth for future generations but also to buy land for biodiversity or carbon offset. Some of these markets are still in their infancy but already look clear to grow rapidly.
• Personal desire to own land continues for many buyers from throughout the UK, wishing to own their own part of the countryside to meet their own biodiversity objectives or to own land for smallholding purposes.

 

How long will this positivity continue?

Over the last 12 months, there has been increasing pressure on input costs, while output values are, at present, remaining strong. Despite multiple challenges, most farming businesses have seen a good year, particularly arable and dairy farmers, with prices remaining buoyant. 2023 could be a tougher year, with input cost pressures and changes to BPS subsidies reducing by 50%. However, we have been through tougher times and, in the past, have seen farms and land remaining firm in value. In particular, we have seen prices remaining firm as a result of farming businesses continuing to expand or typically through farmers who have sold land for development or HS2 and are looking to rollover their capital gains. 

If anyone is considering the sale of their farm or land, we would recommend you take advantage of Stags Farm Agency’s knowledge, particularly as we are now going through a period of policy change, with stronger demand for food security and land now seen to help deliver energy as well. Please feel free to contact a member of the Farm Agency team to take advantage of our market knowledge and reputation as leading South West farm agents. Contact Stags Farm Agency on 01392 680059 or 01872 255728.

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