The average value of bare agricultural land in England and Wales rose by 0.7% in the second quarter of the year to £7,030, reducing the decline over the past 12 months to just 2%.
But prices have fallen 14% since the peak of the market in the third quarter of 2015, however, this is still almost 50% higher than they were a decade ago, according to the latest farmland index from Knight Frank.
It says that there has been a limited amount of land and farms for sale with the acreage advertised publically so far this year in Farmers Weekly is slightly down on 2018.
However, continued demand from a range of buyers have combined to offset the lack of clarity around Brexit. It is those with rollover relief and lifestyle purchasers who have combined to offset the lack of clarity around Brexit.
The majority of farms that Knight Frank has launched this year are attracting good levels of interest, but Brexit and uncertainty over the UK’s wider political future mean potential buyers are often sitting on the fence.
But the report points out that an offer from one interested party can often be the catalyst for others to make a move. For example, competitive bidding meant the guide price was exceeded recently on a good-sized farm in the south west.
‘It would be overly optimistic to claim that the quarter two jump in average prices is the beginning of a more significant period of price growth, according to Andrew Shirley, head of rural research at Knight Frank. He believes that much will still depend on if and how Brexit is delivered later this year and how the UK’s next Governments decide to target the support for agriculture and the environment.
‘Overall, the market remains unpredictable and highly polarised. But large blocks of quality agricultural land and out and out farms are attracting most interest due to their scarcity. When priced according to market conditions, these are selling well as many forward thinking and innovative farming businesses are looking beyond Brexit in terms of strategic planning,’ he added.
