British land prices rise as supply tightens
Farmland values in Britain increased by 2.5pc in the last six months of 2014, while the overall amount of land openly marketed throughout the year decreased by 15pc. The most recent report by major British property consultants, Carter Jonas reported that farmers were the main customers for land in 2014, ahead of lifestyle buyers and investors.
The supply of land became increasingly restricted last year. A total of almost 120,000ac openly marketed across the Britain in 2014, a decrease of 15pc on the previous year.
The tightening supply of openly marketed land led to a significant increase in the volume of off-market sales during 2014. These accounted for a third of all Carter Jonas transactions, with clients increasingly opting for private deals.
Demand became increasingly localised across the farmland market during 2014, with lot sizes over 1,000ac proving most attractive. Farmers (28pc) accounted for the highest proportion of transactions completed by the firm during 2014, closely followed by lifestyle (24pc) and investors (20pc).The report identifies growing and distinct regional variations with land values in the south and east of England achieving around €18,730/ac while the South West witnessed values of €12,,041/ac.
Location, type and quality remained key factors in the prices achieved, along with the strength of the local market.
Andrew Fallows, partner in Carter Jonas' national farms and estates team, said: "The halo effect surrounding London remained significant and is expected to build momentum during 2015 as the capital continues to thrive in performance and remuneration levels are set to outpace inflation.
"The halo effect is particularly prevalent in the country house market with a maximum of 50ac, although holdings with larger parcels of land continue to benefit, albeit to a lesser extent," he said.
"The inevitability of increasing interest rates, currently predicted to occur in the second half of 2015, is also expected to impact the general tone of the land market and our forecasts predict that average land values will increase 3% during 2015," Mr Fallows concluded.