Balance returns to farmland market

• Forecast remains relatively stable

• Higher value than national average

• Investment benefits are still strong

The amount of farmland coming to the market this year is expected to remain relatively stable – following an increase in sales and lower prices last year.

The East of England saw a rise in the amount of farmland listed for sale in 2024 – with average prices cooling slightly, according to the most recent quarterly survey by land agents Savills.

Some 20,703 acres of farmland had come to market by the end of December last year – a rise of 7.9% on the 19,173 acres offered for sale in 2023. Prices softened – although values remained above the national average for most land types.

“Encouragingly, we agreed deals following the proposed changes to Agricultural Property Relief and Business Property Relief announced in September’s budget,” says Oliver Carr, who leads the rural team at Savills in Cambridge.

“Hopefully that’s a good sign of continued demand.”

Great demands

The assumption is that the benefit of investing in land has been diminished – but demands on farmland have never been greater, says Mr Carr.

“Labour has said it is committed to delivering environmental targets, fast tracking the journey to clean power, investing in infrastructure, building more homes and securing food production.

“For these reasons, we should continue to see a variety of purchaser types in the market, each with their own reasons for investing beyond just the tax benefit.

Mr Carr says he doesn’t expect a huge rise in the amount of farmland coming to the market this year. This is  only likely from 2027 due to inheritance tax changes where sufficient tax planning was not possible, he explains.

Growth prospects

“Farmland values are also expected to hold. Growth is most likely from 2027 by when clearer land use priorities will have emerge and development activity will be increasing, leading to more buyers and more competition.”

Nationally, the farmland market last year experienced its highest activity since 2018, with over 187,500 acres listed for sale. This marked a 19% increase from 2023 and a 14% rise above the 2012-2016 average.

Eastern region prime arable land was trading at an average of £9,914 an at the end of 2024, says Savills. This represents a drop of 2.7% compared to 2023 – but is still higher than six of the last eight years.

Grade 3 arable land was trading at an average of £9,289 an acre – a drop of 0.4% on 2023 but ahead of the national average of £8,855.

Decent prices still being achieved in region

Farmland prices averaged £9,290 an acre in the East of England last year – a fall of 1.12% on 2023 but higher than the national average of £8,299 an acre over the same period.

Oliver Carr, of land agents Savills, said: “A good proportion of the land sold in the east is productive farmland where both buyer and seller are driven by commercial objectives.

“Given the recent uncertainty in the agricultural economy some would-be sellers are waiting for greater clarity before opting to sell.

“This is perhaps in contrast to other parts of the country where the reasons for sale might be more amenity or lifestyle focused and timing therefore tends to be driven by a desire to move rather than commercial opportunity.

Values in the east have historically been among the strongest in the country.Although they have softened more recently, Mr Carr said this reflects variation across the region alongside price rises in other parts of the country.

“For the best properties and where there is limited supply, stronger than average prices continue to be achieved.”