Eastern region farmland market remains robust

Highest farmland prices since 2015 with big increase in poorer land

Farmland values in the east of England are continuing to rise, with the average price of prime arable land now at its highest in almost a decade.

Prices for “all types” of farmland in East Anglia – pasture and arable – averaged £9,747/acre at the end of March, according to the latest quarterly index from land agents Savills – a 15.4% increase on the same time last year.

This was well ahead of the average national farmland price £7,939/acre.

The value of eastern region prime arable land was £10,563/acre compared to £9,140/acre in March 2022. This is the highest average value for the region’s  farmland since March 2015 when the price topped out at £11,028/acre.

But it is poorer quality arable land that has seen one of the biggest increases in value in the East – rising 27.8% from an average of £6,112/acre in March 2022 to an average of £7,808/acre in March 2023.

The value of poor livestock land has also jumped by 14.3% to an average of £2,871/acre.

Significant pent up demand is continuing to drive price growth – with buyers spurred on by a variety of reasons, says Oliver Carr, associate director in the Savills rural agency team for West Suffolk, Cambridgeshire, Hertfordshire and Bedfordshire.

Rollover relief

“A backlog of buyers motivated by capital gains tax rollover relief remain a particular force in the market. These purchasers are required to reinvest within three years of disposing of an asset to qualify.

Mr Carr adds: “Given supply has been constrained for the last three years, the clock is ticking for many. We also continue to see strong interest from buyers in the market for high quality commercial farmland.

“Poorer quality land continues to attract those who have an interest in delivering nature-based solutions such as tree planting, biodiversity net gain (BNG), natural capital, and regenerative farming. The latter are now a significant influence on the market and often backed by substantial funds.”

Some 16,700 acres of farmland were publicly marketed across Great Britain during the first three months of this year. This was the most since 2016 and 30% more than the same period of 2022.

Some 2,925 acres of eastern region land has been publicly marketed so far this year – of which 1,391 acres have been in Norfolk, 1,073 acres in Essex and 461 acres in Suffolk. This is 2% up on March 2022 – with more expected to launch over the spring.

Ready to launch

Will Radbourne (left), of Savills’ rural agency team in Essex, says: “It’s early days and the next few months will be significant in determining the supply side of the farmland market, but that said we have a good number of farms ready to launch as the weather improves.

“As is often the case, some sellers need the reassurance from the visibility of other sales or market activity before pressing ahead with their own sale, and late March in particular has seen a flurry of activity.

“In January and February, a number of properties were offered privately with vendors choosing to test the market rather than embarking upon an open launch. [But] to what extent the increases in supply will meet demand in 2023 is yet to be seen.

“Quarter two will undoubtedly paint a clearer picture, with close to half of the acreage marketed each year usually launched during this period. Many prospective buyers will hope this trend continues.”