English Estates & Farmland Market Review | Autumn 2023
The average value of arable land in England has plateaued following eight successive quarters of sustained growth.
Our Farmland Database, which records the details of all farms, estates and blocks of publicly marketed farmland over 100 acres, shows the average value of arable land sold so far in 2023 is £10,900/acre.
This is slightly lower than the £11,100/acre reported for H1 2023 but the same as the 2022 average, which itself was 15% higher than in 2021.
The data shows that despite rising interest rates and a squeeze on farm profitability, the farmland market remains extremely resilient.
While the growth in values has slowed in some locations in Q3, more than 60% of the arable land traded in England this year has sold for more than £10,000/acre, compared with 33% in 2021.
The feeling among agents is that demand is more variable than it was a year ago, but prime farms in popular areas of the country continue to sell well. Buyers include farmers with rollover money to spend, private individuals, the investment sector and green investors.
Supply did rise in Q3, taking the total amount brought to the open market in England during the first nine months of the year to 65,600 acres, which is 9% above the five-year average. There also continues to be plenty of activity on the private market, but overall supply remains constrained in historical terms.
Looking ahead, the outlook for the coming year remains positive, although greater polarisation in values is a possibility. While it does feel as if the bull run in the farmland market might be over for now, our forecast is that we are in a period of stabilisation, rather than facing any significant decline in values.
Farmland remains a solid investment prospect, with a proven track record of capital growth for a range of buyers.
Since 2000, arable farmland has outperformed the commercial and residential property sectors, and equities, delivering an annualised return of 7.8%
Read the full English Estates & Farmland Market Review – Autumn 2023 for more detail on:
- Market outlook
Download a copy of the English Estates & Farmland Market Review | Autumn 2023.