Resilience and realism will define the farmland market in 2026 after a year in which land values finally adjusted following nearly five years of uninterrupted growth, Carter Jonas has said.
The consultancy expects demand for farmland to remain strong over the next 12 months, particularly for high-quality, well-located land and fully equipped farms, but warned sellers must temper expectations after prices softened in 2025 for the first time in five years.
Andrew Chandler, head of rural agency at Carter Jonas, said parts of the market are holding firm. “Some segments of the farmland market remain resilient,” he said, particularly where best-in-class assets are scarce and able to attract national interest, creating a clear divergence in prices.
He said well-positioned, high-quality farms continue to command strong values, while secondary and tertiary land is seeing downward adjustment. Overall performance remains highly dependent on local supply and demand, with conditions varying widely even within regions.
As 2025 draws to a close, landowners are assessing whether the recent market shift presents an opportunity to act or a reason to wait. Land values rose for 17 consecutive quarters before easing back this year, marking a turning point after a prolonged period of growth.
A combination of policy uncertainty and rising costs has driven a more cautious mood across the sector. Impending inheritance tax changes, a lack of clarity over the future of the Sustainable Farming Incentive and ongoing pressure from average harvests have all weighed on confidence, alongside higher employment and property maintenance costs.
Mr Chandler said inheritance tax is likely to prompt some landowners to take action, particularly around succession planning, but stressed this should not be mistaken for a rush to sell.
“We do expect IHT to act as a catalyst for action for those who need to address succession issues and tax planning,” he said, adding that there is no evidence of a widespread sale of assets ahead of the Finance Bill coming into force in April.
Buyer behaviour has shifted in response to these pressures. Throughout 2025, purchasers became more selective and price-sensitive, increasing the importance of careful preparation and realistic pricing. Carter Jonas said this dynamic is likely to persist into 2026.
Speculative pricing that proved successful in recent years is no longer effective, Mr Chandler warned. “There’s a requirement for people to look forward, not backwards, in terms of values,” he said, adding that in areas with high levels of supply, competitive pricing from the outset is essential to maintain interest and avoid extended sale periods or later price reductions.
Despite the slowdown, demand remains strong for well-located commercial farms where competition exists, with some still attracting bids above guide prices. In contrast, poorer-quality land or isolated units are seeing weaker interest and slower sales, limiting their ability to hold value.
Recent data suggests the market is undergoing a correction rather than a sharp downturn. The decline in average arable land values accelerated to 1.5% in the third quarter, following a 1.1% fall in the previous quarter, while pasture land values fell by 1.2% compared with a 0.7% decline in the second quarter.
Average arable land is now valued at £9,556 an acre, with pasture land at £7,806 an acre. Although values are lower year-on-year, this marks the first annual fall since late 2020, ending a run of 17 successive quarters of growth.
Looking ahead, Carter Jonas said success in the 2026 farmland market will depend on realistic pricing, careful presentation and an understanding that confidence, not speculation, will be key to unlocking demand.
