Following a late start to open market activity this year by the end of June 85,400 acres had been marketed, a 16% increase compared to the same point in 2022 and the highest level of supply since 2018.

Prime arable land values

Prime arable land continues to be the most valuable farmland asset across each home nation with average values now exceeding their previous highs of 2015 as follows: England £10,290 per acre, Scotland £9,885 per acre and £8,000 per acre in Wales.

Alex Lawson head of Savills rural agency comments, “Well-equipped commercial farms and significant acreages of bare arable land are often being bought in competition by buyers with capital gains rollover funds who have a time sensitive window for investment. This demand has helped support values and there have been cases where the prices paid are significantly more than the current averages recorded in our farmland value survey.”

Supported by buyers looking for environmental solutions and opportunities across the home nations values for poorer quality pasture land have also increased by an average of 13.5% in the last 12 months to average £5,290 per acre across GB.

Market mixed for highly residential properties

“Farms and estates with a significant proportion of the value apportioned to residential assets are in some cases being more affected by rising interest rates. It is now critical for new launches to have the right marketing strategy, possibly including flexible lotting, as well as realistic guide prices. That said, best in class properties in the popular locations are still highly sought after and deals have been agreed within a few weeks of launch at prices in excess of the guide price.”

Supply in Scotland increases

In Scotland 14,400 acres of lowland farmland were marketed publicly during the first six months of this year, representing a 21% increase from the same period of 2022 although average values remain unchanged.

Evelyn Channing head of rural agency in Scotland says, “Activity so far this year has been for all types of property with buyers including a significant proportion in possession of capital gains rollover funds, as well as interest from lifestyle buyers and those from south of the border looking for value.”

Highest supply in 20 years in Wales

The public market for farmland in Wales has been exceptionally active so far this year, with a new 20 year record set. By the end of June 8,400 acres of lowland farmland had been launched for sale, this is the most since 2000 when 9,500 acres were launched in the first half of the year. By comparison across the last ten years on average 5,900 acres have been launched in the first half of the year.

This increased supply feeds into a market where values have been rising strongly, average farmland values in Wales have increased by 14.7% over the last 12 months.

Daniel Rees head of rural agency in Wales comments, “One of the primary motivators for farm sales currently is retirement, either where there is no successor or where the next generation does not want to farm. Also debt is creeping in as a reason for a sale a factor which may become stronger if interest rates continue rising.”