The volume of farmland available in England has started to creep up, with vendors being a combination of landowners seeking to cash in on record high values, retire or reduce levels of debt.
This is according to Strutt & Parker, whose latest analysis shows that 7,400 acres have been publicly marketed in the first three months of 2024.
This is 6% more than the equivalent period in 2023 and also above the five-year average. More land has also been marketed privately.
Strutt & Parker predicted that supply would increase in 2024 and there are some early signs that this is happening.
Matthew Sudlow, head of farm agency for Strutt & Parker, says: "However, the number of farms put up for sale publicly is actually lower than at the same point last year.
"This highlights that the increase in acreage available is largely down to the launch of a handful of sizeable farms and estates.
“There is no one reason why supply has increased. It is often said that it is the three Ds – death, divorce and debt – which drive the land market.
"We are seeing that the need to reduce debt, as interest rates have risen, is a factor in some instances."
However, Strutt & Parker is seeing more examples where farmers are choosing to retire because they have no successor or where vendors are motivated by ‘profit-taking’ after a period of sustained growth in values.
Mr Sudlow adds: “This could be just the market returning to some normality after the Covid-affected years or a wider trend. Either way, buyers should have a bit more choice than they did 18 months ago.”
Strutt & Parker’s Farmland Database – which records the sale of all farms, estates and blocks of publicly marketed land in England over 100 acres in size – shows that farmland values reached record levels in 2023.
There have not been enough sales concluded in 2024 to give a reliable average for the first quarter of the year, but the average arable price for 2023 was £11,200/acre, which was up 3% on 2022 levels and up 22% in five years.
However, there can be stark differences in the prices people are willing to pay for land depending on location.
Mr Sudlow says: “In some instances, land is selling for around £20,000/acre because it happens to be in the right place for a very motivated buyer, but equally it can be possible to secure arable land for around £8,000/acre in other parts of the country.
“As we look further into 2024, values are likely to continue to be highly variable. We expect premium prices to continue to be paid for prime properties located in hotspot areas, but elsewhere there may be some downward pressure.
"It could be a busy summer for new launches, but then things are likely to slow down closer to the general election, which at the time of writing is expected to take place in the second half of the year.”
