Green investment in farmland on the rise

The number of people looking to buy farmland so they can manage it to improve biodiversity or generate carbon credits is on the rise, according to land and property specialists Strutt & Parker.

“One of the most notable developments in the marketplace over recent months has been increased demand from green investors looking at alternative land uses to food production,” said Matthew Sudlow, head of estates and farm agency.

“They still represent a very small subset of the market, but it does look as if that proportion is set to grow.

We now receive phone calls on almost a daily basis from buyers interested in purchasing land to be managed environmentally – with their plans involving tree planting, rewilding and other conservation and carbon-offset projects.

“Interestingly, such buyers are starting to become active in lowland areas of England, as well as the uplands,” he added.

“Growth in environmental land investment is a trend we are also seeing in Scotland and Wales.”

Role of non-farmers in buying farmland

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 that while farmers remain the biggest buyers of farmland, non-farmers are playing an increasingly large role in the market.

The proportion of farms bought by farmers has dropped to 52%, which is its lowest level since Strutt & Parker’s survey started over 20 years ago. Whereas the proportion bought by lifestyle buyers and private investors has risen to its highest level – accounting for 47%.

Strutt & Parker’s data shows the volume of land coming onto the market remained at record low levels during the first three months of the year.

“Only 20 farms were publicly marketed in the first quarter of the year, which is below the five-year average of 24,” said Sudlow.

The farms were also smaller than in previous years and so the 4,600ac publicly marketed is well below the five-year average of 6,100ac.

“With demand also remaining relatively robust, this means prices have remained virtually unchanged at an average of £9,200/ac for arable land and £7,000/ac for pasture.

“However, prices continue to be very variable around these averages, depending on supply and demand within a localised area,” he concluded.