Carter Jonas has revealed new market data for land values across England and Wales, stating that it reflects an improved sentiment from buyers, with growth in land values accelerating noticeably during the past 12 months.
Arable land values across England and Wales increased by 4.5% during 2021 – its fastest growth rate since 2016 – reaching £8,833 per acre. Pasture also recorded a strong rate of growth, at 6.2% over the year, with average land values reaching £7,161 per acre. This marks a turnaround from 2020, where values fell by 1.3%.
Low quality pastureland also rose in value by an average of 9.5%.
According to the data, 64,000 acres were publicly marketed in 2021, similar to the 2020 figure, but well below the 10 year average of 138,000 acres. However, Carter Jonas notes that a significant quantity is being sold privately.
Carter Jonas head of farm agency, Andrew Chandler, said: “While the amount of land marketed publicly remains well down on the long-term average, those seriously committed to buying a farm should be talking to agents about land and property available privately. From our experience, there is about 15-20% more available off-market.
“Wealthy private individuals are particularly active at the moment, and we are also seeing no drop off in interest from those looking to make strategic purchases.
“Looking ahead we expect more institutions to return to investing in land during these uncertain times. With volatility on the global markets and inflationary pressures, history shows that there is typically an incentive to buy land and other real assets for the security they offer investors.
“We have observed the emergence of a new type of buyer in recent months, with an interest in agricultural land for the public good it facilitates, rather than simply in its farming potential.
“Looking ahead, the roll-out of broad agricultural policy changes over the course of this year, will focus the minds of sole farming operators over potential income loss and lower profitability, pushing them to assess their position and consider restructuring or diversifying.
“The phase-out of BPS entitlements will expose those mid-scale farming enterprises which have been unable, or unwilling, to adapt to the changing subsidy regime. We may therefore see more of these types of holdings come to the marketplace in 2022.
“Supply is expected to rise modestly for the rest of this year, but it will still take time for the market to return to balance, given the low levels of new stock seen over the last two years. Supply remains constrained across much of England and Wales and, with demand strengthening, we expect further upward pressure on land values during the year.”