The amount of farmland being bought and sold rose sharply in parts of Yorkshire last year with more farmers looking to expand their own farms or buy up new land, research has shown.
Figures released by real estate advisers Savills showed six out of 10 buyers of farmland were farmers, with less land having been bought by private landowners.
The figures also showed the number of overseas buyers of British farmland has continued to fall markedly since the beginning of the economic downturn. Last year just three per cent of the buyers of farmland were foreign, compared with a quarter of sales in 2006.
The drop-off in foreign investors as been attributed to tightening economic conditions abroad, as well as a small resurgence in interest domestically.
However the rise in sales comes against a backdrop of increasing shortages of land available for sale – with the supply of farmland ever tighter in the UK. There is currently less commercial farmland for sale nationally today than there was at the height of the 2001 Foot and Mouth disease crisis.
In the East Riding of Yorkshire there was an 82 per cent increase in land marketed from 2010, while in West Yorkshire it rose by 78 per cent, with the latter example albeit from a very low level. In North Yorkshire there was a 37 per cent increase.
In all around 10,150 acres of commercial farmland was marketed during 2011 in Yorkshire. Half of this was commercial arable land. Savills estimates that the price of arable land in Yorkshire remains in the region of £6,000 to £8,000 an acre.
The actual value of sales stalled in late 2011 but were up six per cent across the country according to Savills. The growth is slower than the nine per cent seen in 2010 but still amounted to sales of £268m.
Nationally 155,550 acres of farmland was marketed
Andrew Black, a director of Savills based in York said: “There is so little land around that it is something of an unnatural market at the moment. Farmers do not always perceive land in economic terms therefore you get good years and bad years sales-wise.”
The contraction in the number of overseas buyers comes after a strong period of acquisitions in the UK by both Irish and Danish farmers, with the latter buying up a lot of land in Norfolk and Lincolnshire, with some purchases in southern parts of Yorkshire.
“The Irish were coming over during its economic bubble period when people were paying huge amounts of money for land there. The Danes were coming for different reasons, with the UK seen as a very stable place to invest in land.”
Mr Black added that a number of market factors had increased confidence among farmers during 2011.
“The arable sector benefited from a rise in commodity prices in the first half of 2011, which in part has fuelled confidence in land as a long-term investment.
“Existing private landowners remain a consistent source of purchasers; last year they represented 10 per cent of buyers, compared with 13 per cent in 2010.
“New private landowners were more active last year but still not back at the 2006/7 levels of 30 per cent to 40 per cent.
“There is a lot more caution amongst the financial sector, yet the investment and taxation benefits of holding farmland are encouraging more interest in farmland as an alternative asset class.”
However Mr Black also said he felt it would be unlikely that there would be a further increase in sales and land being marketed in 2012, saying the sector was “increasingly becoming reliant upon death and divorce”.
“Anyone thinking of selling in the next few years may be tempted to take advantage of the current high values particularly if they can qualify for Entrepreneur’s Relief,” he said.