Property investors clamour for farmland in Q3

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Developers are focusing their efforts on purchasing farms, according to new data. 

More than half of farmland plots available in the current market have already been sold and put under offer - the highest demand levels seen across all land types - according to the latest Land Development Demand Index from Searchland, the development site sourcing specialists. 

The research monitors appetites for land plots across England based on the number of available opportunities within the market that have already been snapped up by developers.

The latest index for Q3 shows 42.7% of total land development opportunities listed in the current market have already been snapped up by developers. 

The most in demand land development type in Q3 is farm plots, with 55.3% sold subject to contract or under offer, with interest surging by a substantial 12.4% between the second and third quarters.

Land-only developments also remain popular, with demand at 43.7%, giving investors a clean slate to build what they want. 

The least popular area for investors is residential developments, at 33.8%, which are generally considered safer but can be less lucrative investments.

Overall demand for development opportunities has fallen by 1.8% between the second and third quarters to stand at 42.7%.

While farms are broadly the most popular land type, this is only the case in around half of regions. 

These are the South-west, with demand at 65.0%; the North-west, at 66.7%; the North-east, at 52.4%; the East of England, at 52.6%; and the East the East Midlands, at 61.5; London, at 38.5%; and Yorkshire and the Humber, at 100%, reflecting how those regions are awash with a plentiful supply of brownfield land ready to be developed.

Co-founder and CEO of Searchland, Mitchell Fasanya, said: “Farmyard developments are all the rage, and this high demand is being driven by the ability to convert these land plots into large logistical sites such as Amazon warehouses. 

“However, growing interest in farms is something of an outlier, as broadly speaking investor demand has cooled since the summer. Some are likely put off by difficult market conditions, where high interest rates make it harder to turn a profit when securing finance.

“With demand being more balanced, at least it gives savvy developers more opportunities to haggle on price, potentially making a greater return in the process.”

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