Farmer buyer activity has improved when compared with the past couple of years and expansion is cited in most cases as the reason to buy and, anecdotally, especially where the next generation is wanting to farm. In addition, with the uncertainty surrounding the future of trade outside the UK’s borders, there is a serious consideration of relocating to a holding which offers more flexibility and opportunities for diversification, renewables and other no farm income streams.
Our research shows that almost one-third of farms and estates offer holiday accommodation (including caravans, camping and glamping). A similar proportion open their house or garden, a quarter host weddings and receptions, and more than 10 per cent operate a farm shop (see below). Other popular choices include cafés and restaurants, filming and photography and corporate events.
In contrast, the proportion of purchasers, who have cited investment as the principal reason to buy, has weakened, possibly due to investment in alternative asset classes. There was a slight increase in activity from overseas buyers when compared with the past 10 years post 2008's Global Financial Crisis, suggesting the weakness of the pound against other currencies is continuing to generate opportunities.
Sales data for the first six months of the year indicates the proportion of farmers selling has reduced. There are a few factors that could be at play here including the adoption of a ‘wait and see’ position in the current political and agricultural policy climate and the weather, which delayed or prevented the marketing of some farms.
Debt is always a driver behind some sales but our data does not show any increase in the number of debt-related sales during the first half of this year, despite national agricultural debt levels at their highest since the late 1980s.
However, the current drought and increasing interest rates may drive more debt related sales especially where the pressure to service borrowings is already high. We will be closely monitoring the supply side of the farmland market equation over the coming months.
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