Nearly £480 million has been invested in vineyards and wineries over the past five years as interest in English wine continues to grow.
Strutt & Parker has modelled the level of capital investment in the UK wine sector between 2018 and 2022, which was a period of rapid expansion.
The estimate is based on the amount of land bought for use as a vineyard, the cost of establishing vines and developing a vineyard, and the cost of setting up new wineries.
There are now over 900 vineyards in the UK, covering a total of about 10,000 acres and producing an estimated 12m bottles of wine in 2022.
Although the area of vines in the UK is still dwarfed by the historical wine-growing countries, the UK area is growing faster than in any of the top 25 wine-producing countries.
British wines also won a total of 143 medals at the recent Decanter World Wine Awards 2023, cementing the reputation of English wine on the World stage.
Nick Watson, head of viticulture for Strutt & Parker, said interest in the British wine sector "is as strong as we can remember".
“Our analysis shows how astounding the surge in investment in the sector has been in recent years – coming remarkably close to £0.5 billion.
"Over the past 12 months the number of calls we have received from people interested in either buying a vineyard or establishing a new one has tripled.
“There have been some exciting examples of high-profile established brands such as Taittinger, Pommery and Freixenet investing in the UK over recent years."
He added: "The majority of investors in the sector tend to be people who have had a successful career in business and are looking for a change in direction.
"They view a vineyard as an investment which they hope will be financially sustainable, but also enjoyable.”
Mr Watson said the price of land suitable for vines typically ranged from £16,000 to £20,000/acre, while established vineyards could sell for more than £35,000/planted acre.
“It is an investment that requires deep pockets – the upfront costs of establishing a vineyard are significant and it takes five years before the vines reach full productivity, so cash flow needs careful planning."
Yet despite the challenges, Strutt & Parker's new analysis, which coincides with English Wine Week, says there seems to be no shortage of people seeking land on which to establish vines.
The continued success of English sparkling wines on the international stage has put the sector on the map, sales are on the rise and there is a sense of optimism about the future.
Very little land suitable for vines comes to the open market, with Strutt & Parker saying buyers usually need to approach landowners of suitable sites and negotiate with them to sell, often by offering a premium.
Arable land values in the south east – where growing vines is most established for climatic reasons – have risen over the past 12 months to about £10,000-12,000/acre.
The value of ground suitable for vines has also risen, and now often sells for £16,000-£20,000/acre, according to the analysis.
However, buyers are also increasingly looking to Norfolk, Suffolk and Essex, which share many of the same characteristics as East and West Sussex, Kent, Surrey and Hampshire.
Where buyers are only looking for a small plot of say 10-12 acres, which is the minimum size required for anyone looking to establish a vineyard as a viable business, then prices can rise as high as £25,000/acre.
The analysis notes that this is because the base value becomes an amenity value and there is more competition for smaller plots of land.