GSC Grays has predicted land prices that have already reached more than £15,000/ac will continue to rise in 2024.
Head of farm and land sales at the estate agency, John Coleman, expects farmers to use the ongoing imbalance in supply and demand as an opportunity to service existing loans by selling land to reduce their borrowing.
“Land has already reached £15,000+/ac from small parcel sizes but it is true to say that prices are expected to continue to rise whilst the current supply and demand imbalance remains,” he said.
“Demand for land is currently high and there remains a significant amount of roll-over money which is looking for a home as well as a willingness from the banks to lend to those whose businesses can support greater borrowing.
“With demand continuing to outstrip supply I would certainly recommend moving now to be in the first batch of farms offered for sale in 2024 to ensure the most competitive bidding.”
Coleman said 2024 being the first year without Basic Payment Scheme (BPS) entitlement payments will put more pressure on farmers.
“With 2024 the first year without BPS entitlement payments – although there will be some diminishing de-linked payments for the next two years – this is likely to put some farmers under pressure to service their outstanding loans,” he said.
‘Ring fence’
GSC Grays said one aspect of the market noted by it is the desire of some farmers to bring their operations within a “ring fence”.
“Most recently we have noticed demand from famers who have built their businesses up by buying and or renting blocks of land nearby their main holding but who now want to rationalise that and bring their operations within a ring fence,” Coleman said.
“With the scarcity of farms of this nature we expect competition will continue for the viable and commercial farms of 350 to 450ac with the result that the disparate blocks they had been farming coming to the market in return.
“If the volume of land for sale starts to increase beyond the demand capability then it is possible that prices may start to fall back, but I am not expecting this to happen next year despite the likely change of government and a potential refocussing on Agricultural Property Relief threatened by parties from all sides.”
