Farmer activity continues to dominate the UK farmland market representing 50% of buyers and 46% of sellers last year according to the latest issue of Savills Agricultural Land Market Survey with expansion the strongest motive behind a transaction.

The presence of non-farming lifestyle buyers continues, although the proportion of these buyers making their first land, farm or estate purchase was at its lowest level since 1998 and was significantly less than the peak of 42% in 2004. In most cases last year it was existing landowners buying additional land.

Alex Lawson, Director of Savills Farms and Estates comments, "The demand for good commercial arable farms, continues to drive the UK farmland market. We currently have well over £6 billion of buyers' funds registered for a farmland purchase but it is currently impossible to see the level of increase in supply required this year to help satisfy this demand".

After a lull in activity for a few years there was renewed interest from overseas buyers from a wide range of countries from within Europe and further afield as illustrated in the chart below.

 View the Source of Buying Funds pie chart

It is also worth noting that Savills analysis shows that of all transactions, where Savills acted for either the buyer or the seller approximately one-quarter of the total acreage traded with a Savills involvement changed hands privately."

In terms of reasons behind a transaction our research suggests more sellers are moving out of farming for personal reasons, while the number relocating has fallen compared with 2011. On the buying side expansion was the main reason in 44% of purchases.

The majority of purchases continue to be predominantly funded by cash, which accounted for the funding behind 70% of all transactions during 2012. Loans or debt as a proportion of funding source remains fairly static at 30%, a figure which is largely unchanged since 2005.

 View the Source of Buying funds bar chart

Read the full research report

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