Carter Jonas has announced that farmland values continued to soften in the final quarter of 2025, with experts predicting that the market would remain selective but active in 2026.
Arable land values fell by 0.6% to £9,494/ac during the final three months, a steadying of the market compared to the 1.5% drop recorded in Q3. It was a similar picture for pasture land, which fell 0.4% to £7,778/ac compared to 1.2% in the three months before.
“Speculation ahead of the autumn budget kept the markets cautious for several months, yet the measures announced ultimately did little to alter the broader outlook,” says Andrew Chandler, head of rural agency at Carter Jonas.
“In late December 2025, the government announced an increase to the proposed APR and BPR threshold from £1m to £2.5 million, offering breathing space and much-needed stability for many family farms and rural businesses. Though only a partial policy reversal, it should help improve market confidence by offering greater clarity and supporting longer-term planning.”
He added that no widespread sale of assets was expected ahead of the implementation of inheritance tax reforms in April, although there was little evidence of this prior to the thresholds changing. The changes should boost confidence in holding or investing in assets, particularly for smaller holdings.
Despite this, cashflow challenges are expected to continue, driven by increased labour costs and the delayed launch of the Sustainable Farming Incentive, while the cost of finance continues to be a critical factor, even as interest rates start to ease.