An increasing amount of farmland is coming to market in the East of England – with rural businesses re-evaluating their positions in the face of mounting pressures.
According to the latest quarterly farmland survey from Savills, 18,757 acres of farmland were publicly marketed in the East of England up to the end of September – a 7.3 per cent rise on the same period last year (17,487 acres) and the highest amount since 2018.
However, agents report a slowdown in the last three months – with uncertainty around the upcoming Budget encouraging some farmers to sit tight.
The report also shows growth in average farmland values has cooled.
Oliver Carr (pictured), who leads the rural team at Savills in Cambridge and is part of the rural agency team covering Cambridgeshire, West Suffolk and Hertfordshire (pictured left), said: “The year has been fairly front-ended, with a lot of activity in the run up to the general election – largely driven by farmers selling smaller or off-lying blocks of land to help reduce their debts.
“Since the Summer there’s been some levelling off because many farmers and landowners are biding their time and waiting to see what happens with the Budget. That should give us a clearer direction of travel.
“If inheritance tax reliefs are revised it could affect succession planning and many farming businesses could well need to re-evaluate their position. Consequently, it could lead to a number of larger family farms coming to the market next year and the year after.
“Since the Summer there’s been some levelling off because many farmers and landowners are biding their time and waiting to see what happens with the Budget. That should give us a clearer direction of travel.
“However, we have launched farms this autumn and are currently agreeing deals – so there is a core of motivated buyers.”
According to the Savills report, 169,000 acres of farmland were marketed across Great Britain in the first nine months of this year, compared with 139,000 acres in 2023 – an increase of 21 per cent. Farmland values meanwhile increased by an average of 0.6 per cent in the 12 months to the end of September.
In the East of England, the value of all farmland has dropped by 3.3 per cent year on year to an average of £9,290 an acre (compared to a national average of £8,792 an acre).
In terms of specific land types, the value of prime arable land in the East of England has dropped 4.7 per cent in the last 12 months to an average of £9,914 an acre, while the value of Grade 3 arable land now sits at an average of £9,289 an acre – a drop of 2.4 per cent over the last 12 months.
Nationally, prime arable land is trading at an average of £10,177 an acre (a drop of 0.7 per cent year-on-year) and Grade 3 arable at £9,096 an acre (compared to £9,070 by the end of September 2023).
Harry Kennedy, associate in the rural agency team at Savills in Norfolk (pictured left), said many factors are likely to be responsible for the drop in values.
“A slowdown in the development land market has led to fewer new rollover buyers, high interest rates have discouraged investment and recent poor weather and profitability challenges has led to a fall in confidence in the farming sector,” he said.
“Values have grown more where demand for commercial-scale units is exceeding supply and interest from non-farmers and amenity buyers is stronger. Farms with easier-to-manage soils have also proved popular and have drawn some rollover buyers. Values have fallen in regions where the market typically relies more on farmer buyers.
“Looking ahead, the Budget outcome, increasing likelihood of base rate cuts and improving commodity prices will all influence buyers’ and sellers’ decisions.
“With a Government keen to get Britain building whilst increasing food security and protecting and improving the natural environment, the demands on land continue to increase, creating opportunities for those with the right land in the right places.”
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