Carter Jonas is reporting that farmland values have continued to rise in the first quarter of 2025, despite political and economic challenges.
Arable land values rose by 0.9% to £9,881/ac, while pasture jumped 0.8% to £7,959/ac.
“At this time, supply is significantly down year on year as some landowners continue to delay property launches while they evaluate their positions following announcements made in the autumn budget,” says Andrew Chandler, head of rural agency at Carter Jonas.
“However, there is evidence to suggest that supply is improving as we move into the traditionally busier sales period and are constantly reviewing the market.
“We are seeing a subtle increase in values from this time last year, with arable up by 1.5% and pasture rising by 1.9%. While arable land remains 3.5% below its 2016 peak, grassland continues to reach record levels and is now 4.5% above its peak.”
Northern regions have reportedly fuelled recent increases, with the pattern of growth varying from quarter to quarter, emphasising the importance of local market dynamics. Competition for land is also fierce, with demand exceeding supply.
“There is anecdotal evidence of values being achieved well above guide prices where land is well-positioned and there is a strong commercial interest,” says Sophie Davidson, research associate at Carter Jonas.
“In particular, there are active requirements from commercial farmers seeking equipped farms with existing infrastructure, or the opportunity to build it. Outside of these markets, some types of land are experiencing increased price sensitivity, which could potentially lead to value readjustments or acceleration in lotted sales to broaden buyer appeal.”
Commercial farming enterprises remain a key driving force, as well as those buying for environmental or amenity interests. Andrew notes that the market remains unpredictable, with financial pressures limiting some.
“Higher-than-target CPI inflation, strong wage pressures, and weak economic growth make predicting the timing and extent of future interest rate cuts challenging, although following the fallout from US tariffs cuts will probably be a little more rapid to help boost demand in the economy,” he says
“Furthermore, global economic uncertainties, including aggressive US trade policies and ongoing geopolitical tensions in Europe and the Middle East, pose upside risks.
“Economic pressures continue to limit debt-financed purchases and tighten profit margins.”
The full Farmland Market Update can be read at www.carterjonas.co.uk