Farm values hit new record
The market for agricultural land ended 2023 on a high
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Agricultural land ended 2023 on a high with the value of the Knight Frank Farmland Index, which tracks the value of bare land (no houses or buildings) in England and Wales, rising by 2% in the final quarter of the year to break the £9,000/acre barrier for the first time.
On an annual basis average farmland values increased by 7%, a performance that only gold could draw level with. The FTSE 100 equities index could only muster growth of 4%, while most house price indices fell into negative territory during the year.
A lack of supply and continued strong demand from a wide variety of buyers helped support values, despite high inflation, rising borrowing rates, weak commodity markets and a drop in farm subsidies.
The volume of farmland advertised publicly did rise by 15% during the year, but the total acreage for sale was still well below 100,000 acres, which is historically very low.
There have been few large blocks of bare land put up for sale and those that have hit the market have generally created competitive bidding with prices reaching as high as £20,000/acre. Buyers have often been wealthy local landowners competing with tax-motivated farmers. Environmentally motivated buyers have also been in the mix, but have secured relatively few large purchases.
Labour’s pledge not to remove agricultural and business property relief if it wins power at the general election later this year has helped calm political nerves and there are very few forced sales at the moment, according to Will Matthews, our Head of Farms and Estates Country Department.
Over the course of 2024 we expect values to remain firm with few signs so far that there will be a glut of land for sale.
Main image - The Rothbury Estate, Northumberland - a unique 9,486-acre agricultural, sporting and natural capital opportunity guided at £35 million - was the standout launch of 2023 and is still available to buy