Farmland prices in the East Midlands have almost tripled in the last decade, according to research from property adviser Savills.
Average prices in the area for an acre of grade 3 arable land now average £5,500, whereas grade 1 arable land can reach £7,000 an acre in some places. In 2001 the average East Midlands price for an acre of grade 3 arable land was £1,800 per acre.
The research also shows how Savills is the top agent for farmland in the area in 2011, with a 26% share of all farmland marketed.
Antony Oliphant from Savills Nottingham comments: “Although prices have gone up over the last ten years, it’s important to remember that in a difficult market where buyers are choosy, having the correct marketing strategy is essential. Guide pricing, method of sale and lotting are all important factors to ensure best price for a sale. For example, there have been several auction sales giving disappointing results in the Midlands recently and we are finding sale by private treaty the best method.”
He believes it is also essential to be match land with buyer needs and this is often best achieved through a private treaty sale where there is more flexibility. This flexibility can include the introduction of a tenant on the farm to create an investment opportunity for non farming investors.
Ian Bailey, head of Savills rural research comments: “We expect farmland growth rates to slow during the second half of this year as the market become increasingly polarised, with a strengthening correlation between values and land type, quality and location.”
Overall, farmland values across England continue their upward trend, rising by 3.3% during Q2 2011 following a 2.7% rise in the first three months of this year.
Alex Lawson, Director of Savills, said: “There are some good sales taking place but sensible and realistic pricing is extremely important in order to generate competition. The market is showing signs of becoming two-tiered and where land is not of the best quality, where there are no interested neighbours, or there are significant blights, farms can take longer to sell. In addition to farmers, investment buyers are around for the right proposition and amenity estate buyers are returning. We have seen more open market sales than private deals so far this year”.