What’s going on in the UK farmland market?
The average price for bare agricultural land in the UK has held firm so far this year, according to the latest Knight Frank research.
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Earlier this year we were predicting that more land would have come to the market by now and that we would have a clearer picture as to where prices were heading.
That, however, was of course based on there being some clarity regarding the Brexit process, clarity that is still at the time of writing sadly lacking.
According to the latest results of the Knight Frank Farmland Index (to Q1 2019), average prices for bare agricultural land have been treading water so far this year, holding firm at just under £7,000 per acre, 5% lower than they were five years ago, but still 50% higher than in 2009.
Uncertainty among both vendors and potential purchasers has created a bit of a pressure cooker situation where only those strongly motivated to buy or sell are active.
My own feeling was that a Brexit deal of any form as scheduled would have allowed the market to let off steam and we might have even seen a slight bounce in values by the summer. Not necessarily back to the highs of 2015, when our farmland index broke the £8,000/acre barrier, but perhaps enough to wipe out the 3% slide of the past 12 months.
But with the deadline for reaching a deal now extended to October it seems unlikely that we will see any meaningful movement in prices for the rest of the year. By mid-May the amount of land advertised for sale publicly was well down on 2018 and I don’t see too many signs of this trend being reversed, although activity has picked up slightly.
