A storm of looming tax rises, reducing debt and lower profits is forcing a lot of farmers to sell up, as research from Savills shows farmland for sale at a post-Brexit high.
If you dream of owning a farm, now might be the time to buy, according to recent data from Savills’s rural research team. That’s because farmland market has been at its most active since 2018, with 169,000 acres of farmland, covering 864 holdings, on sale across Great Britain this year. That figure is 30,200 acres more than last year, and 15% above the average for 2012–2016, Savills’s pre-Brexit comparator.
Not only is the total number of acreage for sale increasing, but that increase is spread across holdings of all sizes, from 50 acres to 1000+. The supply also extends across all farm types, and most significantly in regions with arable and livestock.
So that is the what. The question is why. Per Savills, high interest rates have led more farmers to sell small or off-lying blocks of land to reduce debt. This is backed up by farm liabilities falling from £21 billion in 2022 to £19 billion in 2023, which was reported in Defra’s Farm Business Survey. Savills suggests that this trend is likely to continue into 2024.
Another reason is that confidence in farming is at an all-time-low, due to recent poor weather and profitability challenges, as well as changes to subsidies and farm support. In the most recent Farmer Confidence Survey conducted by the NFU, 65% of respondents said ‘their profits are declining or their business may not even survive’.
This lack of confidence is also being exacerbated by concerns about upcoming changes to inheritance tax in the upcoming budget, specifically Agricultural Property Relief (APR). Speaking to Farmers Weekly, Gavin Jones, chartered financial planner at accountant Old Mill, said: ‘This could include reducing the rate of relief or introducing a lifetime limit to cap the value of the relief.’
Farmers Weekly also reported that land agent GSC Grays has listed ‘twice as much land for sale so far in 2024 than in the same period last year’. ‘Capital taxes impact farms and farmland, with inheritance tax the most influential. We’ve anticipated changes for years, and it seems likely now,’
John Coleman, head of land and farm sales at GSC Grays, told Farmers Weekly. ‘Active farming and business management are expected to be key criteria, meaning those who bought farms for inheritance tax reasons may need to reassess how they run them.
‘The biggest impact might be on the tenanted sector, especially for post-1995 agricultural agreements. If APR is lost or amended, it could discourage landowners from offering land to the tenanted market.’
James Fisher is the deputy digital editor of Countrylife.co.uk. He lives in London
Property Talk: What happens when you buy or sell a country estate?
In every end is a new beginning, finds Lucy Denton, as she examines the highs and lows of the sale
Property Talk: Interest rates on hold for first time since December 2021 — but is it temporary respite or start of the recovery?
Property Talk: The improvements to your house that could pay off several times over when it’s time to sell
In a shaky housing market, doing what you can to make the most of your property's value can really pay
Property Talk: Why do we all love waterside homes?
Rivers, lakes, canals and the sea act as magnets for buyers. Annabel Dixon explores why ‘water always bucks the trend’.
