The market for farmland in 2023 continues to see demand outstrip supply, but the number of farmer buyers has fallen by nearly 10%, while private investors and lifestyle buyers have becoming increasingly active according to agents GSC Grays.
John Coleman, head of land and farms sales at GSC Grays, explained, “In the buyer market in any one year we would expect the number of active farmer buyers to be at or just over 50% but in 2023 this is falling closer to 40%. The lack of farmer buyers has been compensated by private investors, lifestyle buyers, institutional investors, and environmental buyers.
“The last two groups prefer larger farms or land holdings as their need for ‘green credentials’ is hard to fill in smaller lumps. ESG investment funds have been hugely influential recently and capital funding for environmental groups has made them very competitive with the need for Biodiversity Net Gain (BNG) and in Nutrient Neutrality (NN) where the better the land taken out of agricultural production the greater the reward and benefit to the environment.
“How long these conditions can continue is open to debate, as the government are threatening the removal of Nutrient Neutrality (NN) to assist housebuilders. The lifestyle buyer and private investor face change as their competitive advantage over farmers comes from capital tax reliefs through Agricultural & Business Property Relief (APR & BPR) which a new government may affect.”
While there is a perception the supply of farmland has seen a significant increase, John says analysis of the market, particularly across the North of England, suggests otherwise. “Various reports say anywhere from 33,000 to 62,000 acres of openly marketed land was on offer by the end of June 2023 – down on 2022 and at least 10% below the 10-year average,” he commented. “For land parcels and farms greater than 50 acres, the amount of land offered for sale in the north is around 5% up on last year and similar to the 10-year average.”