Farmland market cools as struggling farmers hold back on buying
Farmland values have fallen again as squeezed farm profits, rising costs and uncertainty over agricultural support make buyers increasingly cautious.
New figures from Carter Jonas show average arable land values in England and Wales dropped 1.1% in the third quarter of 2026 to £9,361 per acre.
Pastureland values also weakened, falling 0.7% to an average of £7,694 per acre.
However, the national decline masks a widening divide in the market, with well-located farms still attracting competitive bids while less desirable holdings face greater pressure on prices.
The consultancy says drought-affected harvests, higher operating costs and uncertainty surrounding the Sustainable Farming Incentive (SFI) are weighing on farmers' purchasing power.
Andrew Chandler, head of rural agency at Carter Jonas, said the pressures were directly affecting demand for agricultural land.
“Drought-affected harvests, higher fuel, feed and labour costs and the uncertainty around the Sustainable Farming Incentive have squeezed margins and cashflow across the industry,” he said.
“That feeds directly into how much farming buyers are able, and willing, to pay for land.”
Higher inflation and the prospect of interest rates remaining elevated are adding to uncertainty, encouraging some farming businesses to delay major investments.
Arable land has experienced the largest correction, with average values now 4.6% below their peak in the first quarter of 2025.
Pastureland values have fallen by 3.3% from their high during the same period.
Despite the recent declines, Carter Jonas says farmland's longer-term performance remains comparatively resilient.
Over the past 15 years, average arable land values have increased by 42.6%, while pasture values have risen by 52.9%.
These increases are not adjusted for inflation, but illustrate how farmland values have changed over a longer period despite recent market pressures.
Sophie Davidson, associate research analyst at Carter Jonas, said quarterly movements should be viewed in a wider context.
“Recent quarters have been characterised by softer values and a more cautious buyer base, but short-term movements tell only part of the story,” she said.
The consultancy believes limited supply is also helping to support prices in some areas, with landowners who are under no immediate pressure to sell holding back from the market.
Some are reportedly waiting for greater clarity over agricultural support, taxation and wider economic conditions before bringing properties forward.
Separate research from Strutt & Parker, published on 22 October, also points to continued demand for farmland despite difficult trading conditions.
Its figures show farmers accounted for 62% of farmland purchases in England during the first nine months of 2026, the highest proportion recorded in more than a decade.
The firm also reported that just 22,800 acres were publicly marketed during the third quarter, 16% below the five-year average.
The findings suggest that although some farming businesses are struggling to justify expansion, others remain willing to invest when suitable opportunities arise.
However, Carter Jonas warns that buyers are becoming increasingly selective, placing greater importance on soil quality, accessibility and location.
Demand remains strongest where neighbouring farmers, investors or buyers with strategic interests are competing for the same property.
Less desirable holdings are proving more difficult to sell, with weaker buyer interest putting pressure on asking prices.
“Properties with less compelling land quality, access or location are facing greater price sensitivity and, often, longer marketing periods,” Mr Chandler said.
For farmers considering expansion, softer values could create opportunities, although borrowing costs and squeezed margins continue to limit purchasing power.
For sellers, the market is becoming less forgiving, with land quality, location and realistic pricing increasingly important as buyers grow more selective.