Farmland is climbing in value with the average price of arable land in England forecast to reach £10,000/ac by the end of the year.
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, shows that more than 50% of arable land sold so far in 2022 has sold for more than £10,000/ac – the first time this has happened.
This compares to just over 30% in 2021.
The proportion of land selling for more than £12,000/ac has also risen.
Tight supplies, coupled with strong demand, have pushed the average price of arable land sold during the first nine months of the year up 4% to £9,800/ac.
Land is also going under offer at the fastest rate for at least five years.
The average price of pasture has risen by 6% over the same period, to a record-breaking £8,000/ac.
“Our expectation is that by the end of 2022 the percentage increase for arable land could be about 6% too,” said Matthew Sudlow, head of estates & farm sgency for Strutt & Parker.
“There is currently a large amount of arable land under offer at prices which – once the sales have completed and the sold prices added to our dataset – are likely to push the average arable value to over £10,000/ac.
“The last time we saw average prices at this level was when the market peaked in 2014/2015.”
Supply has been growing, with 66,200ac publicly marked by the end of Q3, which is more than was marketed during the whole of 2021 or 2020.
However, most of this rise can be attributed to a small number of significant sales in terms of acreage – a number in the East of England – rather than a rise in the number of farms and estates being marketed.
Although the volume of land has increased compared to the past couple of years, supply remains at historically low levels and demand continues to outstrip supply.
