Agricultural land values in England have reached their highest level since 2016, according to analysis by Strutt & Parker on its Farmland Database.
The database records the details of all farms, estates and blocks of publicly marketed farmland in England over 100ac in size, and shows the majority of farms and estates are now selling for at, or more than their guide price.
In fact, the consultancy's data shows that 73% of farms marketed in the past 12 months sold at or for more than their guide price - the highest level since 2014.
Most arable land is now selling for between £8,000 and £10,000/ac according to Strutt & Parker.
The average value of arable land is currently at £9,500/ac it said – a rise of £100/ac since the end of 2021.
The figures also show that in 2021, only 11% of arable land sold for £8,000/ac or less. In recent years, this figure was typically 20-25%.
Commenting, Matthew Sudlow, head of estates and farm agency at Strutt & Parker said:
“Land values continue to march upwards – the average value of arable land is now 2% higher than a year ago and not far off the values seen at the peak of the market in 2014/2015.
"The average value of pasture is £7,500/ac, which is also 3% higher than 12 months ago. Of course, averages do mask that there is still wide variability in the prices being paid, dependent on location and the level of local interest, but the trend over recent quarters has been one of growth.
“High values are being fuelled by strong demand, coupled with a shortage of farms and estates up for sale," he continued.
"Demand continues to outweigh supply, leading to stiff competition for the best properties. We are seeing some properties sell for well over their guide price and are hearing of some sales in hotspot areas where buyers are resorting to gazumping.”
However, Sudlow said that they are expecting more land on the market this year, due to the end of Covid-19 lockdowns and high prices encouraging people to sell.
“However, it seems unlikely that supply will increase so much as to significantly change the balance of the market, given the level of pent-up demand for farms and estates," Sudlow said.
"Farmer buyers may take a more cautious approach, mindful of the impact of soaring input costs and the phasing out of Basic Payments on farm margins. However, there is still plenty of rollover money to be spent and environmental investors are starting to become more active in some areas.
"Demand for residential farms with a manageable acreage also remains extremely strong, although interest levels do very much depend on the quality of the house.”