Farmland found to be the most in demand development type during Q3

Property investors and developers are focusing their efforts on purchasing farms, according to new analysis which found that over half of farmland plots available in the current market have already been sold.

Related topics:  Property,  Investment,  Development,  Land
Property | Reporter
29th September 2023
land 884
"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"
- Mitchell Fasanya - Searchland

The latest research from development site sourcing specialists, Searchland, looked at the 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 figures for Q3 show that 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.

Farms can be attractive to developers as they’re less polluted than other land types, while there’s less of a need to demolish buildings if you want to convert the land and in recent times, they have become a popular choice for large logistics warehouses, such as Amazon distribution warehouses.

Other investment opportunities

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

After that comes industrial developments, as 37.4% have been purchased, followed by commercial developments, at 36.1%.

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

Commercial demand falls

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

This reduction is driven by falling interest in land-only plots, falling by -2.3% quarter-on-quarter. Meanwhile, there was a -1.5% drop in residential development demand and a -0.3% reduction in industrial development.

Commercial developments bucked the trend, where demand rose by 1.1% to reach 37.4% in the third quarter.

Regional look

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 Midlands, at 45.5%.

Industrial developments meanwhile lead the way in 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, commented: “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.”

More like this
Latest from Financial Reporter
Latest from Protection Reporter
to our newsletter

Join a community of over 20,000 landlords and property specialists and keep up-to-date with industry news and upcoming events via our newsletter.