Despite the continued uncertainty surrounding Brexit, one thing you can be sure of is that if you are considering buying or selling farmland, it has never been more important to seek expert financial advice.
Over the past 2 years, the farmland market has proved more resilient than many predicted, considering Brexit-related uncertainties and the practical challenges posed for farmers by our very cold winter of 2017/18 and hot summer of 2018.
Average prices have remained stable, despite an increase in the supply of farmland in the market. Arable land in England rose by 2% in 2018 to £9,400/acre and although this is down from its peak in 2015 by £1,300/acre, it still offers good value, and is only a little below the five-year average. Of course, the big question on everyone’s lips is what happens to land prices after Brexit?
The Agriculture Bill, published in September 2018, confirmed the government’s intention to phase out support payments over a seven-year period. Much has been made of the negative impact this could have on land prices.
In addition, some market commentators have predicted that Brexit could slash up to one fifth off the value of Britain’s commercial farms. This would end a decade long boom in agricultural land prices, as the Agricultural Bill moves forward and financial support is tailored.
“It’s going to take some navigating if you are buying or selling farmland this year,” said Afford Bond Agricultural Director, Lindsay Beeston.
“For a good number of years farmland was a better investment than even prime central London property, but the agricultural scene is changing fast at the moment, and if farmland values fall, more farming families might choose to sell as the Agricultural Bill withdraws financial support.”
If you are considering buying or selling farmland, why not talk to one of our agricultural accounting experts first – or email Lindsay.Beeston@affordbond.com – the success of your venture will be in the planning.