Few opportunities for Essex farmland buyers in 2012

Whilst headlines in 2012 proclaimed the continuing rise in agricultural land prices buyers in some areas were unlikely to have found something to purchase.
Availability:
Just over 2,600 acres of farmland was offered for sale in Essex in 2012, in 16 blocks averaging 166 acres each. Three good sized farms failed to find a buyer meaning that only 1750 acres were sold in the open market achieving a total sale price of around £16.5m.
Private sales have increased the total sales slightly but not to the same extent as previous years.
Suffolk, on the other hand, saw over 7,000 acres publically offered for sale and the vast majority found ready buyers at prices averaging over £8,500/acre.
Prices:
The lack of available land in the south of the region has resulted in very variable prices achieved as some frustrated buyers pay a premium for particular blocks whilst other farms have still to attract an acceptable bid or have been withdrawn. Notwithstanding this, good grade 2 arable land has generally made over £8,000/acre with land values varying from £6,500/acre to over £10,000/acre in exceptional circumstances.
The majority of land has been sold to farmer buyers, many of whom have made money outside the farming sphere. In many cases the prices have been chased up by investors looking for an asset class that offers stability, tax advantages and the prospect of continuing value growth.
Prospects:
The prospects for 2013 are strong with high crop values from the 2012 harvest swelling deposit accounts. Money in the bank continues to offer a poor return and machinery manufacturers and land sellers are likely to see the benefit of continued spending.
Demand remains strong from expanding farmers and those looking for a fully equipped residential farm, a particularly rare beast in the Essex market.
During 2013 it will be difficult to buy grade 2 arable land for less than £8,500/acre and determined buyers will have to be prepared to pay more in the event of competition.
Funding:
Agriculture is fortunate to be very well supported by the banks and is considered a safe sector. Our clients have continued to receive competitive offers from their bankers and this has underpinned confident bidding. We see no reason for a credit squeeze in 2013, in fact lending margins are continuing to fall. Fixing rates for a period is well worth considering whilst we are in a historically low interest rate environment.