National property consultancy Carter Jones has announced that farmland values have increased for the eighth straight quarter. Two years of rising land values were confirmed as arable land increased by 0.4% to £9,272 per acre, while pasture rose by 0.5% to £7,511 per acre between January and March.
Year-on-year arable land has increased in value by 4.3% and pasture by 3.4%, however, Carter Jonas added that growth had slowed considerably when compared to the start of 2022.
“Rising land values have been a key feature of the past two years,” said Carter Jonas head of farm agency, Andrew Chandler. “We have seen pasture grow by a healthy 5.5%, and arable by 4.8% (annualised).”
Strong demand
In the same period, lower-quality land has reportedly risen at a faster pace, driven by the demand by capital investors to purchase land for environmental and biodiversity enhancement.
Secondary and tertiary pasture land values have increased by 8.7% annually in the last two years, while secondary and tertiary arable has seen 6.1% annualised growth in the same period.
Pasture land is now just £100 per acre (1.3%) behind the 2016 peak, illustrating its ability to rebound after falls even when there is sustained pressure on the market. Arable land remains £849 per acre (8.8%) behind its peak.
Long-term, land has continued to be a stable investment. Over the last ten years, pasture and arable land has seen annualised growth rates of 3.5% and 2.7% respectively.
“Although the UK has avoided a technical recession, the sustained economic downturn continues to challenge the market,” said Mr Chandler. “Most notably, with the Bank of England’s decision to raise interest rates for the eleventh time in 18 months, finance is becoming increasingly expensive, and investors are less inclined to borrow.”
He added that sustained inflation continues to impact the agricultural sector, restraining profitability. However, despite this, it is encouraging that market values across England and Wales continue to move upwards.
For more information go to www.carterjonas.co.uk
