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English Estates & Farmland Market Review – Autumn 2022

2 mins

Farmland is climbing in value with the average price of arable land in England forecast to reach £10,000/acre by the end of the year.

Analysis of Strutt & Parker’s Farmland Database, which records the details of all farms, estates and blocks of publicly marketed farmland in England over 100 acres, shows that more than 50% of arable land sold so far in 2022 has sold for more than £10,000/acre – the first time this has happened. This compares to just over 30% in 2021.

The proportion of land selling for more than £12,000/acre has also risen.

Tight supplies, coupled with strong demand, have pushed the average price of arable land sold during the first nine months of the year to £9,800/acre – the highest it has been since 2015. Land is also going under offer at the fastest rate for at least five years. The average price of pasture has risen by 6% over the same period, to a record-breaking £8,000/acre.

Our expectation is that by the end of 2022 the percentage increase for arable land could also reach 6%. There is currently a large amount of arable land under offer at prices which – once the sales have completed and the sold prices added to our dataset – are likely to push the average arable value to over £10,000/acre. The last time we saw average prices at this level was when the market peaked in 2014/2015.

Supply has been growing, with 66,200 acres publicly marked by the end of Q3, which is more than was marketed during the whole of 2021 or 2020. However, most of this rise can be attributed to a small number of significant sales – a number in the East of England – rather than a rise in the number of farms and estates being marketed. Although the volume of land has increased compared to the past couple of years, supply remains at historically low levels and demand continues to outstrip supply.

Agricultural land values  – the outlook

The current turmoil in the global economy may intensify competition for land further. At times of economic uncertainty there tends to be renewed interest in farmland as it is viewed as a safe investment and good hedge against inflation. The financial crisis of 2008 was certainly followed by a surge in demand for farms and estates and we may see a repeat of this pattern. Unless there is a significant rise in supply – which is not looking likely at present – then we anticipate further growth in values.

 

Read the full English Estates & Farmland Market Review Autumn 2022 for more detail on:

  • Amount of farmland marketed by region
  • Number of farms marketed
  • Type of farms marketed
  • Speed of land transactions
Matthew Sudlow
Senior Director and Head of Estates & Farm Agency
Central & West
+44 1865 988 993
Send a message to Matthew Sudlow
2 mins

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