Sales of farmland 'strongest' in South West
The South West was the most active region for farmland sales during the third quarter of 2012.
But shortage of land was still a dominant factor in the market, according to agents Smiths Gore. Its records show the average value of English farmland remained at £8,900 per acre, the same as during the second quarter, but the amount of land for sale remained at an historic low.
Average values have risen 3% since the start of the year and while prices broke the £9,000 barrier during the third quarter, as predicted, they have now dropped back slightly.
The Smiths Gore statistics showed 27 farms were for sale in the region during the last quarter, compared with just six in the North East and nine in the South East. The 27 farm sales represented a total acreage of 4,300 compared with a total of 7,000 acres sold in the region during the same quarter two years ago.
Simon Derby, a partner in Smiths Gore's Taunton office, said: "Although the South West has had more sales during the last quarter than any other region, we must not forget that there is a serious shortage of land coming onto the market. Our research department is predicting that less than 100,000 acres will be sold in total this year – that's roughly half the size of Dartmoor National Park.
"Farmer buyers remain the dominant players in the market place. As most bare-land sales are for smaller areas than equipped farms, more farmers can raise the capital to bid for them, so there tends to be more competition.
"Investors are still drawn to the market, as farmland continues to perform well as an asset class, and the tax advantages of owning farmland remain attractive."
The demand for Westcountry farmland was exemplified by two auction sales conducted by Kivells. On both occasions the land sold far in excess of expectations.
They included 73 acres of quality land at Hendrawalls, near Davidstow in North Cornwall. The village hall at Otterham overflowed with prospective buyers and a tense atmosphere saw the bidding quickly escalate to exceed the guide price, until the hammer finally fell at £610,000.
Auctioneer David Kivell said he was delighted with the results. "It proves again that the land market remains strong, as demand still outstrips supply with many farmer buyers still seeking to expand," he said.