Agricultural land values on rise as supply shortage bites

The farmland market was strikingly robust in 2021, with a wide range of buyers showing an appetite for almost all types of farms in all locations. This led to a 1% rise in average arable and pasture prices, compared to 2020 levels, with an increase in the number of farms and estates selling at or for more than their guide price. Taking the year as a whole, the average value of arable land was £9,400/acre, while the average price of pasture was £7,400/acre.

Low levels of supply continue to be a key feature of the marketplace. Analysis of our Farmland Database shows that the volume of land launched to the open market in 2021 was one of the lowest on record at 55,000 acres. Although a growing number of vendors did choose to sell privately in 2021, the rise in off-market transactions will only have partially offset the fall in public sales.

Demand, however, remained strong with a growing range of buyers in evidence. This includes farmers, private investors and lifestyle buyers. Farmers still buy more than half of farms which are sold, so they are a crucial part of the market. However, there is also a growing list of other buyer types who are interested in investing in farms and estates for reasons which do not always relate to farm profitability. 2021 saw rising numbers of lifestyle buyers seeking to purchase a slice of the countryside, leading to good results for any vendors of residential farms. Meanwhile, companies and individuals wanting to buy land for tree planting, rewilding and other conservation and carbon-offset projects were also increasingly visible in the marketplace. We noted early last year that we were getting lots of enquiries from environmental buyers. This is now translating into purchases, with green investors active in both lowland and upland England.

Read our full market update for:

• Market outlook
• Supply of farmland
• Demand for farmland
• Pricing and region specific breakdowns between arable and pasture land