English agricultural-land values fell the most since 2008 in the first quarter as weakening commodity prices and concern that the U.K. might vote to exit the European Union damped demand.
Prices dropped 3 percent from the previous quarter to less than 8,000 pounds ($11,600) an acre, broker Knight Frank LLP said in a report on Friday. About 25 percent fewer acres of farmland were advertised for sale in the period, the report shows.
Wheat fell to a near six-year low in the U.K. and farm incomes tumbled 29 percent last year as prices for meat and dairy products also declined. A vote to leave the EU would create uncertainty about subsidies and trade treaties, Knight Frank’s head of farms and estates Clive Hopkins wrote in the report. In Britain, more than half of farmers’ income comes from the EU.
Land values may fall further because of weak commodity prices, even if the U.K. remains part of the political bloc , Hopkins wrote. However, “we will see more land coming to the market and deals being done,” he said.
Farmland prices fell 5 percent in the three months through December 2008 as the financial crisis hurt values. Since then, it has been one of the best performing real estate sectors, even beating luxury homes in central London.
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