New research shows how the supply of farmland offered on the open market in the North of England decreased by -34% in 2014. Partly due to this, prices have increased by 17.5%, with the average value of prime arable land in the north of England now typically just over £10,000 per acre and in some cases the best land is selling for well in excess of £16,000.

Andrew Black, Farm Agency Director at Savills York comments: “We have definitely witnessed a ‘two tier’ market, with higher prices being paid for the best and lower prices being paid for the rest. One of the notable farm sales in the North this year was the sale of Greengill and Maidenhill Farms, Penrith. The property extended to 580 acres lying within a ring fence. It included two adjoining farms which were offered for sale as a whole or in lots at a guide price of £6.85million. As a former dairy holding currently under arable production, the farms offered flexibility to purchasers. The sale generated considerable interest on a national basis, with over 30 viewers including a number of dairy farmers seeking to expand. This resulted in competitive bidding and a sale being agreed as a whole for in excess of the guide price.”

Most of the farms offered for sale in the regions in 2014 have now found buyers, apart from those holdings where the guide prices were set too high and above market levels. In terms of supply we don’t see the level of supply increasing in Q4, however looking to 2015 several factors could come into play that will affect the market. A rise in interest rates and any continued commodity price pressure could result in more farms coming to the market or certainly smaller parcels of off lying land where landowners are taking the opportunity to even out the balance sheet.

Who’s buying local land?

Interestingly in terms of the purchaser profile we have seen the return of the ‘lifestyle’ buyer on the back of the rise in the residential market and also the corporate buyer targeting larger commercial arable acres. The farmer buyer is still very active but has dropped down to the 42% mark, perhaps due to more farmers deciding to expand their business by renting than buying.

The level of ‘off market’ deals has continued to increase again in 2014 and represents approximately 25% to 30% of the overall market.”

• In the North of England 13,605 acres of farmland were publicly marketed compared with 20,480 acres in 2013 (to end September), a decrease of -34%.

• The North of England accounted for 16% of all farmland marketed in England.

• The volume of land marketed fell in Northumberland (-73%) to 1,824 acres compared with 6,793 acres during 2013 (to end September). A decrease in supply was also seen in North Yorkshire (-52%) and Cumbria (-20%).