Latest analysis shows that 7,400ac of farmland has been publicly marketed in the first three months of 2024, which is 6% more than the same period in 2023.
This is according to Strutt & Parker’s Farmland Database, which found that the volume of farmland currently available available in England is also above the five-year average.
Head of estates and farm agency for Strutt & Parker, Matthew Sudlow, said: “We predicted that supply would increase in 2024 and there are some early signs that this is happening.
“However, the number of farms put up for sale publicly is actually lower than at the same point last year, highlighting that the increase in acreage available is largely down to the launch of a handful of sizeable farms and estates.
“There is no one reason why supply has increased. It is often said that it is the three Ds – death, divorce and debt – which drive the land market and we are seeing that the need to reduce debt, as interest rates have risen, is a factor in some instances.”
However, Sudlow said there are probably more examples where farmers are choosing to retire because they have no successor or where vendors are motivated by “profit-taking” after a period of sustained growth in values.
“This could be just the market returning to some normality after the Covid-affected years or a wider trend. Either way, buyers should have a bit more choice than they did 18 months ago,” he said.
The database also found that almost 75% of the farms marketed in 2023 have now sold or are under offer, which is typical for the past five years although lower than in 2021 and 2022.
There is a clear split in the market, Strutt & Parker said, as mixed, arable and residential farms are more likely to have sold than lowland grazing, hill grazing and dairy farms.
A record 70% of arable land sold for £10,000/acre or more in 2023 and over a quarter sold for £12,000/acre or more.
Farmland sales
There have not been enough sales concluded in 2024 to give a reliable average for the first quarter of the year, Strutt & Parker said, but the average arable price for 2023 was £11,200/ac, which was up 3% on 2022 levels and up 22% in five years.
However, there can be stark differences in the prices people are willing to pay for land depending on location, the estate agency said.
“In some instances, land is selling for around £20,000/ac because it happens to be in the right place for a very motivated buyer, but equally it can be possible to secure arable land for around £8,000/ac in other parts of the country,” Sudlow said.
“As we look further into 2024, values are likely to continue to be highly variable. We expect premium prices to continue to be paid for prime properties located in hotspot areas, but elsewhere there may be some downward pressure.
“It could be a busy summer for new launches, but then things are likely to slow down closer to the general election, which at the time of writing is expected to take place in the second half of the year.”
