Land Price Review

Farmland prices in England look certain to level out after hitting averages of over £6,000 an acre for the first time, as the reduction in crop prices and expectations of higher interest rates weigh heavily on investors.

Average land prices in England, which provides the bulk of UK agricultural production, rose by 2.8% over the last quarter to a record high of £6,156 an acre. The increase, equivalent to 6.7% over the year, was driven by a general lack of good farms for sale coupled with strong demand from farmers.

Where there is strong demand from neighbours, or the land is of the scale and in the right location to be of interest to investors, we can still expect to see prices of up to £9,000 an acre being achieved.

However, there are signs that the market is starting to level out with supplies of land for sale rising at a time when buyers are becoming pickier. Purchasers are increasingly wary of spending money on lower quality land or small blocks that will not add any economies of scale to existing holdings.

Jo Costall, head of McKinnells Land division said, “while the market may slow down, we still believe that prices will continue on a steady upward trend in the long term".

English farmland prices have tripled over the last 10 years, compared to a doubling in the price of UK houses, and a mere 2% rise in share prices.

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