This spring could see a surge in farms and land for sale, experts say, after weather held off some launches planned for the start of the year.
Property consultant Carter Jonas says it expects the traditional hive of sales activity – linked to the warmer temperatures and longer days in April and May – to be evident.
It comes after 11,400 acres were publicly-marketed in the first quarter of 2024, almost 50% up on the same period in 2023,
“Supply in the first three months of the year is typically a fraction of the level of supply that comes to market in the second or third quarter,” says Andrew Chandler, head of rural agency at Carter Jonas.
“Wet weather has delayed numerous launches, indicating that the usual surge in supply in the spring will be greater than in recent years.”
Carter Jonas’ new Farmland Market Update publication reports the robust demand from a range of buyers is set to continue to drive values upwards.
From 1 January to 31 March average arable land values in England and Wales increased by 0.9% to £9,667/acre, and pasture grew by 0.7% to £7,806/acre.
CPI inflation eased from 4.0% in January to 3.4% in February, falling faster than projected. It is now expected that inflation will meet the Bank of England’s 2% target in the next few months, strengthening the arguments for the Bank to start bringing down the base rate.
Mr Chandler says: “Easing inflationary pressures offer a welcome relief for farming businesses, meaning a potential decrease in the cost of inputs, more stable customer demand and potentially easier access to credit if interest rates follow suit. Nonetheless, there does remain uncertainty in the economic outlook.
“The expectation of interest rate cuts, a significant cash presence, and rising traction within the natural capital market mean the overall farmland market remains optimistic.
“With buyers’ appetites for land remaining strong, we can expect values to continue to continue their upward trend.”
The recent increase in newly-marketed land is likely to be matched by healthy interest, particularly from investors and farmers keen to enter into environmental agreements as the industry adjusts to further reductions to Basic Payment Scheme (BPS) payments.
Sophie Davidson, Carter Jonas research associate, adds: “In the Spring Budget, government announced the extension of agricultural property relief from inheritance tax (starting April 2025) to land managed under an environmental agreement.
“This provides reassurance to farmers who have already entered an Environmental Land Management scheme and removes a major barrier for those looking to enter an agreement.”
Persistent wet weather has encouraged many farmers to opt into the Sustainable Farming Incentive earlier than they may have originally planned.
“With the relentless rain preventing many farmers from drilling winter crops and now delaying spring planting, farmers have been increasingly exploring strategies to ensure a more predictable income,” says Ms Davidson
Defra’s farm opinion survey, published in October 2023, illustrates this trend, noting that 55% of respondents have made changes to their farm due to the weather, up from 46% just six months earlier.
While this predates the recent wet weather, Carter Jonas says it indicates a longer-term trend that is likely to become more pronounced with the shift towards more extreme weather conditions.
The property consultant says the introduction of mandatory BNG in February will also accelerate opportunities for landowners and demand for land for environmental gains.
