Lump Sum Exit Scheme take up could boost farmland supply

The Government’s Lump Sum Exit Scheme (LSES) initiative could boost the supply of farmland to buy in England according to findings published in Savills Spotlight: The Farmland Market.

Data from Defra indicates more than 2,000 applications were received for the LSES by its close last September, representing 2.6 per cent of England’s farms.
In terms of acreage, Savills’ analysis shows a bias towards smaller farms, which can in part be explained by the £100,000 LSES payment cap in place.
According to modelling by Savills research these applications collectively cover 260,000 acres of land, which is 1.2 per cent of England’s agricultural land area, equivalent to 20 per cent of Lincolnshire’s agricultural land area or 50 per cent of Hampshire’s.
Put another way, it’s double the area of farmland offered for sale publicly in England during 2022.

To access the lump sum, retirees must sell, let or transfer their land by May 2024 meaning realistically this year is the only marketing season available.
Geoff Jones, of Savills rural agency team in Salisbury, said: “We predict the amount of farmland for sale will not increase significantly because capital taxation policy continues to encourage its long-term retention. Also, in many cases, the farm is the family’s long-standing home, so ties are strong.”
Further evidence that the LSES and the agricultural transition will lead to some sales of farms and farmland are supported by Savills’ analysis of the reasons for farm machinery dispersal sales.

In 2022 ‘sale of the farm’ was explicitly stated as a reason for the machinery auction in 15 per cent of cases, and higher proportions refer to retirement or a ‘change in farming policy’.

Leave a Reply

Your email address will not be published. Required fields are marked *