To the end of October Wales experienced its lowest number of acres launched to the open market since 2012. The combination of political uncertainty and potential changes in agri policy continue to delay decisions to bring land to the market, but despite this, buyers remain active and farmland values have shown signs of growth.
Total acres marketed in Wales fell to 7,250 acres, representing a 35% decline in land for sale since October 2018. Land availability is now at its lowest level for seven years.
In light of low supply and active demand, green shoots are starting to appear in farmland values. Savills Farmland Values Survey recorded an annual uplift in values of arable, livestock and dairy farmland, with only poor livestock land showing a decrease.
Prime arable land in Wales bucked the trend across Great Britain, recording a 1% increase in average value to £6,720 per acre over the last nine months, compared to an average decrease of -0.5% across Great Britain.
Daniel Rees, head of rural agency for Savills Cardiff, said: “As across all regions of Great Britain supply is down in Wales compared to last year but the positive aspect is that property new to the market is attracting interest from serious buyers who are limited by the lack of stock. The mix of buyers is also encouraging with both agricultural and ‘lifestyle-change’ purchasers looking to find the right property.”
Looking forward, the eventual outcome of Brexit negotiations is expected to increase market activity. Clarity in the political and economic environment may bring more land to the market as farmers assess renewed business objectives. There will always be a market for good quality farmland from those looking to expand their acreage either through renting, contracting of purchasing. Other land types are also attracting interest as attention is turned to filling environmental offsetting agendas.
Intuition would tell you the fundamentals of supply and demand will play out but for now the question is for how long can the market sustain its current imbalance?