2020 publicly marketed farmland supply lowest in history

Record low supply and robust demand helped support agricultural land values during a difficult 2020.

Strutt & Parker’s Farmland Database, which records all publicly marketed farms, estates and blocks of land larger than 100 acres, shows values rose by an average of 3% on the previous year.

The average price of arable land was £9,300/acre (equal to the five-year average) and the average price of pasture was £7,200/acre.

About half of arable land sold last year made £8,000-£10,000/acre, with about 30% selling for £10,000/acre or more.

However, a significant range in values between the top and bottom of the market remains – from £5,200/acre to £17,500/acre – with location and appeal to lifestyle or other non-farmer buyers being critical factors.

Covid-19 a significant factor

Many sellers held off from marketing their land in 2020 because of uncertainty about Brexit trade arrangements and changes in the subsidy system, says Matthew Sudlow, head of estates and farm agency at Strutt & Parker.

Covid-19 also had a significant effect, with supply never fully recovering from the 43% fall in farms and estates for sale during the second quarter, when the first lockdown occurred.

“Just under 54,000 acres were publicly marketed in 2020 [almost exactly 50% down on 2018], which is the lowest amount on our records and we think in history,” says Mr Sudlow.

“It is well below last year’s 69,300 acres, which was already one of the lowest years on record and also a third below the five- and 10-year averages.”

Although in some regions private sales were a growing trend, the rise in off-market transactions only partially offset the fall in public sales.

It is the first time since 2009 that fewer than 200 farms and estates were for sale in England.

“In the second half of 2020 we saw strong interest in residential farms and estates, particularly in the south and west of England, from buyers seeking a change in lifestyle as a result of Covid-19,” says Mr Sudlow.

“Rollover buyers, along with private investors, continue to be active in many regions, viewing farmland as a safe, long-term investment. We have also had an increased number of enquiries from overseas.”

At the same time, some of the best quality land is selling for the least amount of money, because it is located in areas less appealing to non-farmer buyers.