In our latest Spotlight on the GB Farmland Market we highlighted that the area of lowland publicly marketed during 2020 was a record low of just 114,000 acres. The area was a 7 per cent reduction compared to 2019 and 31 per cent below the five-year average.
Covid-19 had an impact as the first lockdown affected property marketing plans, but market activity continued later into the autumn so lockdown affected the timing of property launches more than the volume of farmland being launched. Almost everything that was offered for sale last year sold and sold well, meaning that limited stock has been carried over into 2021.
In its Agricultural Transition Plan Defra set out detailed plans for the next four years, information that farmers can use to help prepare their businesses for reduced agricultural support payments, and to take advantage of new environmental income streams. This will give some farmers the confidence and opportunity they need to plan their retirement from the industry or perhaps a succession to the next generation.
If these plans involve selling any land, there is currently pent-up demand in the market driven by the established, wide range of motivations associated with land investments. However, in Q1 2021, two buyer types in particular stand out. First, there are buyers looking for residential and amenity properties at all scales, often driven by a desire to have access to open space and enabled by more flexible working practices following the experiences of the Covid-19 pandemic.
Secondly, there are buyers with environmental objectives attracted by the opportunities linked to natural capital focused policy, including Biodiversity Net Gain requirements and the role that land can play in their strategies for achieving net zero carbon emissions.
Momentum from 2020 has been carried into 2021 and while Q1 only represents a small proportion of the annual market, signs are encouraging. During Q1 2021 more farmland was publicly launched than in Q1 of any year since the 2016 EU membership referendum - in Q1 2016, just prior to the referendum - 19,600 acres had been marketed.
Overall 15,000 acres were launched across Britain in Q1 2021 but it is perhaps too early to attribute this to the reduction in policy uncertainty. What we can say is that the extent to which supply increases to meet demand in 2021 will become clear soon because close to 50 per cent of the acreage marketed each year usually is launched during Q2. Many hopeful buyers will be keen to find out.
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