Savills research has found farmland values in the East of England continued to rise in the first three months of this year, with the average price of prime arable land now at its highest in almost a decade.
The quarterly farmland price index shows that at the end of March this year ‘all types’ of farmland in East Anglia – pasture and arable – traded at an average of £9,747 an acre, a 15.4 per cent increase on the same time last year, and ahead of the national average of £7,939 an acre.
The value of prime arable land in the East of England meanwhile increased by 15.6 per cent to the end of March, up to an average of £10,563 an acre compared to £9,140 an acre in March 2022.
This is the highest average value for prime arable land the East of England has seen since March 2015 when the price topped out at £11,028 an acre.
Nationally, the value of prime arable land sits at an average of £10,058 an acre, a rise of 9.1 per cent year on year.
But it is poorer quality arable land that has seen one of the biggest increases in value in the East – rising 27.8 per cent from an average of £6,112 an acre in March 2022 to an average of £7,808 an acre in March 2023.
The value of poor livestock land has also jumped by 14.3 per cent from an average of £2,512 an acre to an average of £2,871 an acre.
Oliver Carr, associate director in the rural agency team for Savills operating in West Suffolk, Cambridgeshire, Hertfordshire and Bedfordshire, said significant pent up demand continued to drive price growth – with buyers spurred on by a variety of reasons.
“A backlog of buyers motivated by capital gains tax rollover relief remain a particular force in the market,” he said. “These purchasers are required to reinvest within three years of disposing of an asset to qualify – and given supply has been constrained for the last three years, the clock is ticking for many.
“We also continue to see strong interest from buyers in the market for high quality commercial farmland, while poorer quality land continues to attract those who have an interest in delivering nature-based solutions such as tree planting, biodiversity net gain (BNG), natural capital, and regenerative farming. The latter are now a significant influence on the market and often backed by substantial funds.”
During the first three months of this year 16,700 acres of farmland were publicly marketed across Great Britain, the most since 2016 and 30 per cent more than during the same period of 2022. So far this year there has been approximately 2,925 acres of land publicly marketed in the East of England – of which 1,391 acres have been in Norfolk, 1,073 acres in Essex and 461 acres in Suffolk. This is a two per cent rise on March 2022 – with more expected to launch over the spring.
Will Radbourne, part of the rural agency team for Savills in Essex, said: “It’s early days and the next few months will be significant in determining the supply side of the farmland market, but that said we have a good number of farms ready to launch once the weather improves.
“As is often the case, some sellers need the reassurance from the visibility of other sales or market activity before pressing ahead with their own sale, and late March in particular has seen a flurry of activity. In January and February, a number of properties were offered privately with vendors choosing to test the market rather than embarking upon an open launch.
“To what extent the increases in supply will meet demand in 2023 is yet to be seen. Quarter two will undoubtedly paint a clearer picture, with close to half of the acreage marketed each year usually launched during this period. Many prospective buyers will hope this trend continues.”
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