Average farmland values rise to highest level since 2018
The average value of arable farmland in England rose to £9,700/ac in Q3 2021 – the highest quarterly average since early 2018.
Matthew Sudlow, head of estates and farm agency for Strutt & Parker, said the rise is a reflection of historically low levels of supply in the marketplace, combined with firm demand from a wide range of buyers.
“We predicted back in July that there would be a rise in average values in Q3 given the market sentiment was positive,” he said.
“This has proved to be the case, with a number of sales going through at more than £10,000/ac.
However, given there is a relatively small number of transactions each quarter, the average for the whole of 2021 may be a more reliable measure of trends in average prices.
“This is currently £9,200/ac – which has been the average since 2017 – with 60% of sales agreed during 2021 at £8,000-10,000/ac.”
Analysis of Strutt & Parker’s Farmland Database, which records the details of all farms, estates and blocks of publicly marketed farmland in England over 100ac in size, shows fewer than 10,000ac came to the market in Q3 2021, which is about half the level typically expected.
To date, only 157 farms have been marketed openly this year in England, which is about 40 fewer than usual.
“This does initially feel surprising, as the market has certainly felt much busier than it did this time a year ago,” said Sudlow.
This is probably because the private market is also active. We estimate private sales currently account for about 25% of the market nationally, and up to 40% in some regions.”
However, even taking private sales into account, there are some areas where there are virtually no farms left unsold because demand continues to outstrip supply.