Cash buyers boost interest in farmland sales

Savills said that this tied in with its analysis of transactions where it acted for the buyer or seller, which showed that the proportion of buyers in 2008 who cited cash as the principle means of purchase was just over 50%, the highest level recorded for four years. High level funds also remain strong.

Despite this, the volume of farmland marketed during the first quarter of this year fell significantly across England and Wales, being 70% and 60% respectively of that in the first quarter of last year, Savills research revealed.

This pattern was the same across all the English regions with 13,600 acres publicly marketed compared with almost 20,000 acres for the same period of 2008.

In contrast, Scotland recorded a substantial increase in supply of 61%, although from a low base, the increase amounted to 1500 acres, taking the total acreage marketed during the three months to 4000 acres.

David Cross, Director Savills said: "It seems this year the farmland market has moved towards a later selling season and judging by the number of farm visits we are undertaking I expect supply to pick up during the second and third quarters of the year."

Savills’s farmland Value Survey shows that, as the firm forecast at the end of last year, average values across Great Britain have fallen slightly, by 1.4%, in the first quarter of 2009. This follows on from the softening in values recorded during the second half of 2008.

In England, the average value of grade 3 arable land fell less than 0.9% to £4575 per acre in the first quarter with average pasture values easing more than arable, which had recorded greater falls during the second half of last year.

Cross said: "Our research shows agricultural incomes have not been unduly hampered by past recessions. In this recession, although there is price volatility and reduced levels of subsidy, there are undoubtedly opportunities which may not have existed in past recessions.

"A fundamental difference is low interest rates. With this in mind we expect that values will regain the recent lost ground. In fact we are already seeing signs that values may well rally soon largely based on the amount of cash available and continued pent-up demand."

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