Land Values – stable but variable

Another year – erratic weather and another period of uncertainty.

So what has changed?

As we start a new decade it would be wrong not to look back over the last year, for once the weather was not the sole topic of conversation.

The wet summer of 2019 has affected the amount of winter sown wheat and barley, so the forecast is not great for arable farmers in terms of quantity for 2020. In other sectors away from the topic of the weather, growth in domestic milk production in 2020 is expected to be limited due to a smaller dairy herd and lower growth in yields which might help firm the dairy market into the first half of 2020. In the beef and sheep sector production is expected to fall by 4% and 5 % respectively in 2020, this after another significant drop in 2019. From a policy perspective, 2019 seemed to have been an extension of 2018 as two Brexit deadlines came and went, but at least the overwhelming Conservative majority in the General Election has at least given some clarity to the Government Policy and direction of Brexit, we have two readings of the Agriculture Bill in the Houses of Parliament without too much fuss  so it looks likely the majority of the text and policy will get adopted.

So what has this done to the Agricultural Land Market? – Well the answer is very little to be honest! – we at Armitstead Barnett have marketed and sold over 1300 acres of Agricultural land in Lancashire and Cumbria in 2019, both on the market and off market privately. Most buyers have been from an existing farming business keen to increase their land holdings. In terms of values, there is a huge swing between the highest and lowest £7,000 – £10,000 per acre covers the main range of sales, but with notable sales well above (and below) this range.

The uncertainty in Brexit, future trading positions and commodity prices doesn’t seem to delay or deter some farmer’s decisions which has resulted in a strong and positive land market in Lancashire and Cumbria which is not fully reflected in the National UK market which has seen land values fall slightly year on year. What’s the forecast into 2020? probably something very similar, well placed productive fertile blocks of land will continue to meet strong demand, the test will be in the more marginal upland areas and secondary land sectors which are dominated by beef and sheep farmers, who might not have the same appetite for acquiring land as compared to the dairy and arable sectors of Lancashire.