Knight Frank has said the average value of bare agricultural land in England and Wales reached a new record high of £9,335/ac in the second quarter of 2024 despite “pre-election uncertainty”.

The property consultancy has launched its latest Farmland Index for Q2 2024, which reveals a 0.9% increase from the previous quarter and a 5.5% rise over the past 12 months.

The report shows that farmland values have increased by 32.8% over the past five years and 24.2% over the last decade, highlighting the strong long-term performance of this asset class.

The 5.5% annual growth in farmland values outperforms other property classes, including prime central London residential, which saw a decrease of 2.4%, and the wider UK housing market, which experienced a modest growth of 2.3%.

According to Knight Frank, while the UK general election caused some investors to pause their property plans, the farmland market remains “robust” from a supply and demand perspective.

The volume of land for sale has increased compared to 2023 but remains at historically low levels, with under 50,000ac coming to market by the end of June.

Head of farms and estates at Knight Frank, Will Matthews, said: “It is becoming increasingly hard to say how much farmland will sell for because the prices we are achieving vary so widely.

“There are so many factors influencing the market, from tax planning to environmental aspirations, that every parcel of land or farm that comes up for sale exists in its own microclimate that will determine its value to the eventual purchaser.”

“For example, we have recently sold a very large block of land for over £20,000/acre and a smaller, but still sizeable, holding for around £45,000/acre. Conversely, some blocks have sold for closer to £10,000.”

Matthews said it is generally a given that property markets tend to slow down in the run up to big political events and said that this general election has proved to be no different with potential buyers and vendors “sitting on their hands”.

“What impact the change of government might have on the farmland market remains to be seen.”

The report highlights that despite pre-election concerns, many positive factors supporting the farmland market are likely to persist.

These include the introduction of biodiversity net gain requirements for property developments, potential increased demand for land to support ambitious housing targets, as well as renewable energy and tree-planting targets.