The price of farmland in England rose 12% to reach a new record high of £10,600/ac, £600/ac more than the previous peak of the market in 2014/2015, according to the most recent data from UK property consultants Strutt & Parker.

Strutt & Parker’s Farmland Database, which records the details of all farms, estates and blocks of publicly marketed farmland over 100ac, also shows that the volume of farmland which came to the open market in 2022 was nearly 20,000ac more than in 2021.

However, the consultancy said that demand continues to outstrip supply. This can be seen, the consultancy said, in the fact that 85% of farms sold for at or more than their guide price in 2022.

“A series of events has combined to make the land market very competitive,” said Matthew Sudlow, head of estates and farm agency for Strutt & Parker.

“While we saw a rise in the quantity of farmland on the market last year, the total volume available was not up by enough to meet demand.

“Demand has been particularly strong for larger blocks of commercial arable land, where competitive bidding has meant, in some instances, the price per acre achieved has been well in excess of the national average.”

In 2022, private and institutional investors – that typically buy the larger farms and estates for sale – accounted for 30% of transactions, compared to an average over the past decade of about 22%.

Strutt & Parker added that this trend of private investors seeing land as a relatively safe place to hold capital is “likely to continue”. However, it said that prices may start to level off and the market become more settled.

While demand is strong, supply also grew this year, with 77,400ac publicly marketed in 2022, which is the most since 2018. This rise is likely due to a small number of significant sales in terms of acreage, rather than farms available, as 77,400ac is not a large amount in historical terms. According to Strutt & Parker, the 20-year average is 86,700ac.

The number of farms available was actually below the five-year average in every region other than the North West and South East.

Looking ahead, the consultancy firm added that interest rates rising mean that where buyers need to borrow money, then the outlook is challenging.

However, it is anticipated that there will still be a pool of cash buyers – including farmers – who are keen to buy land either for expansion, tax reasons, capital growth, amenity, lifestyle or environmental reasons.