Posted by: davidgarnerconsulting | March 15, 2010

Market for Farmland to Remain Strong

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THE year started with the launches of a few large 400-acre-plus farms, and agents remained nervous of the interest they would receive.

As it turned out, bare land, farms and estates remained popular with a huge variety of purchasers.

It has been well-documented that the trough of the residential market was in February-March 2009, but this did not impact on the demand being received for agricultural properties.

For many reasons, land was seen as a safe investment, and thus has received continued interest from lifestyle buyers, investment buyers, institutional buyers and the ever-expanding local farm buyers.

Last year turned out to be another fantastic one for the farm agency with all major farm instructions selling throughout the South West. Clients were pleased with land prices, especially with bare land arable values exceeding Pounds 7,000 per acre on several sales. This appetite for agricultural land will be certain to continue in 2010, but may not be fuelled by speculators and investors, but by expanding farming business. This will clearly require the backing from the leading agricultural banks, as the majority of farmers require funding of some sort.

Click Here to Download Your FREE Guide to Farmland Investment and Agricultural Investment

I am pleased to report that in the recent transactions of farms which we have sold for between Pounds 2 million and Pounds 3 million, banks have supported their clients in extending their farming operations. Although lending criteria has certainly tightened since the slack approaches of a few years ago, a good farming business is sure to attract support for the right opportunity. This eagerness for farms to expand is one of the main reasons why the agricultural demand for land will continue this year.

A lack of current supply is certainly what is increasing the land value. However this could be delicately balanced, as I hear from a number of my colleagues in other firms that farms are being readied for the market in the next few months. This, coupled with the farms we have privately on the market, will provide relocating farmers with a much wider choice. Having said that, if a farm is to be launched which has an expanding farmer as its neighbour, the agent could relax, knowing that instant interest could well be received. As I am lucky enough to work for a national firm, we frequently see farms offered purely to local farmers. While this may result in a quick sale for the local auctioneer, the client must be confident that the farm has been promoted to a national and international audience.

This we successfully achieved last month with the sale of Warson Barton to a city businessman off the guide price of Pounds 2.75 million. On the other hand, we must never discount the local market, as we are about to exchange contracts of a 400-acre farm to a farmer within 30 miles of it, which is guided at Pounds 3.1 million.

Click Here to Download Your FREE Guide to Farmland Investment and Agricultural Investment

Source: findarticles.com

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