The average price of bare agricultural land in England and Wales has nudged back above £7,000/acre, according to the Knight Frank Farmland Index. 

Values rose by 0.7% in the second quarter of the year to £7,030, reducing the decline over the past 12 months to just 2%. Prices have fallen 14% since the peak of the market in Q3 2015, but are still almost 50% higher than they were a decade ago. 

A limited amount of land and farms for sale – the acreage advertised publically so far this year in Farmers Weekly is slightly down on 2018 – and continued demand from a range of buyers, including farm businesses, those with rollover relief and lifestyle purchasers, have combined to offset the lack of clarity around Brexit. 

"The majority of farms that Knight Frank has launched this year are attracting good levels of interest, but Brexit and uncertainty over the UK’s wider political future mean potential buyers are often sitting on the fence. However, an offer from one interested party can often be the catalyst for others to make a move. "

For example, competitive bidding meant the guide price was exceeded recently on a good-sized farm in the south west. 

The market remains unpredictable and highly polarised, however. But large blocks of quality agricultural land and out-and-out farms are attracting most interest due to their scarcity. When priced according to market conditions, these are selling well as many forward-thinking and innovative farming businesses are looking beyond Brexit in terms of strategic planning. 

However, it would be overly optimistic to claim that the Q2 jump in average prices is the beginning of a more significant period of price growth. Much will still depend on if and how Brexit is delivered later this year and how the UK’s next governments decide to target the support for agriculture and the environment. 

For more information please contact Andrew Shirley