Farmland in the UK Outperforms London Prime Property
London’s prime residential property market has always been among the sturdiest performing sectors within the UK, however, property firm Savills have released figures from the first quarter of this year that show UK farmland values have increased across the country, outperforming even the prime London property market.
Prime arable UK farmland values increased by an average of 1.9% on the year whereas London prime residential property market increased by 1.3%.
Prime arable farmland increased to £7,800 per acre in the first quarter of this year although this was not seen throughout the whole of the country, the rate of increase differs from region to region. The East Midlands enjoyed a 4.9% rise while the West Midlands and South West stayed fairly static.
Private investors and institutions seem to have the highest level of investment interest, driving the growth forward, especially in large blocks of commercial farmland. Data shows that this year has already seen farmland fetch £10,000 per acre and more, proving that this asset class is currently and probably sustainably very much in vogue.
The availability of farmland in the UK or rather lack of it remains the most prevalent problem. In the first three months of this year there were only 13,100 acres put out to the market in the whole of the country, which is a very significant 28% drop from the first three months of 2012.
Scotland saw a 71% drop in availability and the north of England fell by 61%, the east of England’s supply fell by 42%, however, the East Midlands supply increased by over 50%.
Whilst Farmers still make up the vast majority of farmland buyers, Investors are also keen to snap up quality agricultural properties in the hope of capturing future capital growth driven by a rising population demanding more resources such as food, fuel and feed for livestock.