South West farms and land market: the statistics
Stags Farm Agent George Alder MRICS looks for trends in the South West farms and land market over the last 10 years.
Stags’ Farm Agency has always collated and analysed the data from the farms and land we have sold throughout the West Country and in 2009 we created a more detailed database. As we have now finished analysing our 2018 statistics, we can look back in detail at the farm and land market over the past 10 years.
So, what have we learned?
The total area of farms and land sold by Stags during the past 10 years totals 37,339 acres, with 200 farms and 1,325 land lots sold.
During the same period we have seen the average value of land in the South West increase from £5,216 per acre in 2009 to £8,594 per acre to the end of 2018 – an increase of 64%.
Looking at each county over the same 10-year period, we have seen land prices in Devon increase by 57%, Cornwall by 73%, Somerset by 57% and in Dorset by 70%. This substantial growth in land values was particularly strong in 2010, 2011, 2012 and 2013 when there was an increase of over 10% each year.
However, what is probably important for most people with an interest in land values is what has been happening to values since the vote for the UK to leave the European Union in 2016.
According to our own statistics, 2016 saw a 3% increase in land values across the West Country, in 2017 a 2% fall and in 2018 a 4% increase.
The 2016 transactions were most likely for sales agreed prior to the EU Referendum, while 2017 transactions were for sales agreed from June 2016 onwards. Some of these would have completed in early 2017 when there naturally would have been some caution due to uncertainty over future trade and farm support.
Last year saw an increase in land values, which was most likely due to a combination of a constrained land supply and farmers taking the opportunity to purchase adjoining or nearby land where this suited their future business plans, with most taking a longer-term view.
So what does 2019 have in store?
Over the next few years, we are likely to see the most significant changes to the British agricultural industry in two generations. This could result in a similar market to that of 2018, which saw a constrained land supply resulting in a stable land market, with certain locations showing demand outweighing supply, resulting in land price increase. On the flip side, there will be some areas where demand is lower and land lots take longer to sell for the expected price.
On a positive note, a common trend is that buyers are taking a long term view in securing farm and land purchases to safeguard the future of their businesses by expanding their holdings.
If you would like any advice on land and farm values please feel free to contact Stags Farm Agency.