Farmland values stay high despite inflationary pressures

Strong demand for farmland from a range of buyers has kept land prices elevated during the third quarter of 2023, according to land agent Carter Jonas.

This is despite high interest rates making borrowing more expensive for new buyers and more land coming to the market.

The latest figures from Carter Jonas estimated arable land at £9,517/acre during the quarter, up by 4.5% (£406/acre) on the third quarter of 2022.

See also: Farmland market levels off, but outlook remains positive

Meanwhile, pasture land values increased on the same period last year by 3.2% (£236/acre) to average £7,683/acre.

Almost 80,000 acres of farmland were marketed on the open market during the first nine months of 2023, which is more than was advertised during the whole of 2022.

Andrew Chandler, head of rural agency at Carter Jonas, said: “High inflation and the increased cost of borrowing has significantly affected many asset classes, but interest in buying UK farmland remains strong.”

‘Safe haven’

Mr Chandler added that although land typically delivers a modest annual return, it has remained a strong, proven asset at a time of uncertainty, and therefore has a reputation for being a safe haven in times of financial volatility.

Some land agents have suggested that farmland values are starting to plateau slightly, with very little change in prices compared with the previous quarter.

Recent data from both Savills and Strutt & Parker have also shown land values to be stabilising after a period of growth.