The RICS/RAU rural land market survey has just been published for H2 2016 which points to a further softening in demand for farmland during that period. Demand fell across both mixed use and commercial farmland sectors during the second half of 2016 largely as a result of uncertainty over Brexit and future subsidies as well as low commodity prices. The bare land opinion based survey suggests that values at the end of 2016 were an average of £8,625 per acre for arable land and £7,250 per acre for pasture land.
The survey also confirmed that the availability of farmland decreased nationally, but despite that, the weaker demand is expected to lead to further decline in prices over the next 12 months.
Richard Greasby, Head of Butler Sherborn’s Rural Department, contributes opinion and market evidence to the RICS/RAUI survey. Richard reports that for our Cotswolds and Oxfordshire market, prices achieved for land sales continued to differ widely depending on land quality, amenity potential and proximity to buyers with roll over money to spend. Arable farms are likely to attract more demand than limited grassland farms unless there is equestrian potential that can be unlocked. The Cotswolds is still a favoured area with generally healthy demand from a variety of farming and non-farming buyers. There still remains uncertainty over how Brexit will actually work out and how that will impact on land ownership and farming in the future.
Although the RICS/RAU survey predicts a continuing fall in prices during 2017 Richard does not anticipate a significant or sustained fall fundamentally due to the increasing demands on land for production of food and fuel, opportunities for development and favourable tax benefits.
Butler Sherborn buy and sell land and farms for clients in the Cotswolds and Oxfordshire and are always happy to provide marketing recommendations free of charge and without obligation.
For further information contact Richard Greasby 01285 883740 and firstname.lastname@example.org.