UK Farmland Values Appear To Have Topped
The credit crunch and the fallout from the City is now beginning to impinge on farmland values. These have come to a stumbling halt as the bonus boys pull back from buying farms as a way of mitigating potential inheritance tax liabilities.
‘Lifestyle buyers, especially those from the finance and banking sectors, have been prominent in the farmland market in recent years but the credit crunch and global economic crisis means their activity has declined substantially,’ said Andrew Shirley, head of rural land research at chartered surveyor Knight Frank.
‘According to our prime country house index the value of farmhouses has fallen by 7.5% over the past 12 months. Selling farms where the bulk of the value is in residential property is becoming much harder,’ he warns.
English farmland values fell slightly in the third quarter of 2008 and annual growth has fallen to 27% from a peak of almost 38% last quarter. The average value of agricultural land is £5,060 an acre, up from £3,997 an acre a year ago.
Knight Franks reports that farmer optimism has been dented by falling commodity prices, increased input costs and a wet harvest and that farmland prices are forecast to decline further over the next 12 months.
‘The spectacular rise in farmland values has come to a juddering halt after some of the strongest growth ever seen by the market,’ says Shirley.
The value of English farmland, according to results from the Knight Frank Farmland Index, fell by just under 1% in the third quarter of 2008 following growth of 11.9% and 10.4% in quarters one and two respectively.
‘Arable farmers, who were strong players in the land market earlier in the year when wheat prices climbed to over £180 a tonne, are now more cautious following a dreadful harvest,’ says Shirley.
‘Feed wheat is now worth under £100 a tonne and the cost of drying wet grain this harvest has been astronomical for many businesses. Sharp increases in fertiliser and other input costs have also added to the gloom.’
‘Lifestyle buyers, especially those from the finance and banking sectors, have been prominent in the farmland market in recent years but the credit crunch and global economic crisis means their activity has declined substantially,’ said Andrew Shirley, head of rural land research at chartered surveyor Knight Frank.
‘According to our prime country house index the value of farmhouses has fallen by 7.5% over the past 12 months. Selling farms where the bulk of the value is in residential property is becoming much harder,’ he warns.
English farmland values fell slightly in the third quarter of 2008 and annual growth has fallen to 27% from a peak of almost 38% last quarter. The average value of agricultural land is £5,060 an acre, up from £3,997 an acre a year ago.
Knight Franks reports that farmer optimism has been dented by falling commodity prices, increased input costs and a wet harvest and that farmland prices are forecast to decline further over the next 12 months.
‘The spectacular rise in farmland values has come to a juddering halt after some of the strongest growth ever seen by the market,’ says Shirley.
The value of English farmland, according to results from the Knight Frank Farmland Index, fell by just under 1% in the third quarter of 2008 following growth of 11.9% and 10.4% in quarters one and two respectively.
‘Arable farmers, who were strong players in the land market earlier in the year when wheat prices climbed to over £180 a tonne, are now more cautious following a dreadful harvest,’ says Shirley.
‘Feed wheat is now worth under £100 a tonne and the cost of drying wet grain this harvest has been astronomical for many businesses. Sharp increases in fertiliser and other input costs have also added to the gloom.’
