Bare arable and pasture land values reach record levels

Bare land in England rose to record price levels in 2022, with arable land averaging £10,600/acre and pasture £8,500/acre.

This puts arable values £600/acre higher than the previous market peak of 2014-15, with a rise of 12% on 2021 levels, according to Strutt & Parker’s Farmland Database.

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The average price of pasture land rose by 13% in 2022 to £8,500/acre.

The database records the details of all farms, estates and blocks of publicly marketed farmland larger than 100 acres, through close contact with other agents.

Valuations are then carried out to strip out non-land elements such as houses, buildings, diversified enterprises and other assets.  

Publicly marketed areas

At 77,400 acres, the publicly marketed area was almost 20,000 acres greater than in 2021 and the highest since 2018.

However, this was still lower than the 20-year average of 86,700 acres and nowhere near enough to satisfy demand, with 85% of farms that exchanged in 2022 selling at or for more than their guide price.

Matthew Sudlow, head of estates and farm agency with Strutt & Parker, said that demand had been particularly strong for larger blocks of commercial arable land.

“Competitive bidding has meant, in some instances, the price per acre achieved has been well in excess of the national average. In fact, more than a quarter of the arable land sold in 2022 achieved more than £12,000/acre.”

A rise of 8,500 acres to 19,100 acres in the area marketed in the east of England was down to a small number of significant sales, rather than an increase in the number of farms available, said the firm.

Private investment

In every region other than the North West and South East, fewer farms were marketed than the five-year average.

Mr Sudlow said: “Private and institutional investors accounted for 30% of transactions in 2022, compared to an average over the past decade of about 22%.

“Because such investors have typically been buying larger farms and estates, their role in the market becomes even more significant in terms of how many acres they purchased.

“For example, our analysis showed that out of a subset of 32,000 acres of publicly marketed farmland which reached the point of exchange by the end of 2022, 15,300 acres had been purchased by either a private or institutional investor, which was double the area bought by farmer buyers.

“The trend of private investors seeing land as a relatively safe place to hold capital is likely to continue, although prices may start to level off and the market become more settled.”

Mr Sudlow estimated that farms marketed privately, which are not included in these figures, account for 20-35%, with the percentage variable between different regions.