Why the Danes flocked to Lincolnshire

UK - In parts of the country it felt like a Viking invasion last year, says Robert Hurst, head of Savills Farm Agency in the East Midlands. In Lincolnshire alone nine farms were purchased totalling 7,000 acres.
calendar icon 22 January 2007
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National Pig Association

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The total area publicly marketed in the East Midlands for 2006 was something in the region of 11,000 acres.

So where did the rest go? Firstly, the Danes picked up only 13 percent from the open market; the rest they bought in private off-market deals or were farms which had been publicly marketed in the previous year and only found buyers in 2006.

The vast majority of buyers were from within the locality. There were also some English buyers from outside the area investing in the East Midlands with proceeds from development land sales or for other tax driven reasons.

The Irish were also quite active but didn’t always come up with offers. They did, however, seem to be attracted to the fens, picking up two commercial blocks in South Lincolnshire.

At the start of 2006 most market pundits predicted an increase in the supply of land which for commercial farms could have put downward pressure on values. The supply did increase but the demand more than outstripped this, resulting in prices rising for some land from £2,500 an acre in spring to £3,500 by the autumn.

The biggest rises were seen for commercial cereal growing land in the centre of Lincolnshire whereas there was less demand for fen soils and less spectacular price increases were experienced.

So what do we forecast for 2007? In short, a generally level supply and a continuing strong demand. In supply terms it is difficult to predict but in general the year-on-year trend over a considerable period is that less land is offered for sale each year.

Strengthening commodity prices have taken some pressure off the farming industry but with signs of rising inflation and interest rate rises those farmers who are in two minds whether to stay or sell may decide to lock into this strong demand.

We see the Danish and Irish interest continuing and the primary reason for this is that they are experiencing land values in their own domestic markets of £10,000 per acre plus. They also view the English land market as lagging behind when compared to many of the other highly populated parts of Northern Europe.

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