Despite the record low offerings of 2019, publicly marketed farmland looks set for another record-breaking low in 2020, as the extent of the pandemic lockdown begins to show in market activity figures.

Across Britain, just 19,100 acres were publicly marketed to the end of May 2020, down 68 per cent on five and 10-year averages. The largest decrease was seen in Scotland where a total of just 2,600 acres were marketed, 77 per cent down on the 10-year average, while Wales showed only a 30 per cent decrease on the same metric with 2,500 acres advertised. England, making up 73 per cent of the farmland supply, was 67 per cent down for the year to 31 May at 14,000 acres.

The average size of farms marketed was also down, averaging 126 acres during the same period compared with the 10-year average of 205 acres.

The chart below shows the seasonality of farmland supply and tracks the extraordinarily low current supply.

For those who follow the farmland market, such low supply will not be surprising as potential sellers were, and in many cases continue to be, cautious. 

Without pressures to sell (often rare in this market) the inclination for many is to wait until a fully functioning or confident market returns. Our agents’ have, however, seen a number of deals through to completion over the past few months, either where the transaction was well under way prior to the Covid-19 lockdown or where the buyer was a neighbour, who already knew the land on offer. Once viewing restrictions were eased, all agents reported a substantial number of enquiries and requests to view property.

Signs that market activity is beginning to increase are also backed by a rising number of farm advertisements as lockdown restrictions are relaxed.  Furthermore, analysis of Savills website traffic has shown interest in rural property is up 50% on pre lockdown levels. Interestingly, the search terms farms and estates are now well above the pre-lockdown levels.

The pandemic has prompted many buyers to reconsider what they desire when purchasing a property. In our recent residential survey 49 per cent of 660 respondents said the amount of garden or outside space had become more important since the lockdown period. A village or countryside location now seems more attractive to 40 per cent of those surveyed, increasing to 50 per cent for those with school-aged children.

For this reason, interest remains strong for lifestyle and amenity properties particularly among those with proximity to London. Evidence of buyers looking further afield for better value property across  northern England and Scotland is also apparent and may also be a factor of pent-up demand.  

Indeed, this pent-up demand is evident across the farmland market, with buyers increasingly frustrated by a prolonged period of limited supply. Commercial farms, be it for sale or let, have received strong interest, indicating fresh confidence in the sector. Those with environmental service delivery potential remain desirable. 

While its clear Covid-19 has impacted the market sentiment, the fundamentals of this market continue to be underpinned by a wide variety of factors. Although the current market is unlike anything we have seen before, its track record in times of economic uncertainty speaks for itself. We also know to expect a decline in sales prior to a major policy change.

But as the agricultural transition has been reaffirmed, and signs of pent-up demand bubble around, the question for those hanging on is, what are you waiting for?

Further information

For more information on how Covid-19 has impacted the rural sector, see  our Webinar: The rural sector and the impact of Covid-19 recorded 14 May 2020 and keep an eye out for our half yearly farmland market summary expected in early July.