Land values rise by 5% as farmland hits a 4 year high

— Knight Frank, 15 October 2021

The average value of farmland in England and Wales has hit levels not seen since the beginning of 2017, according to the latest results of the Knight Frank Farmland Index.

Land values rose 4% in the third quarter of 2021. This marks a third consecutive quarter of growth and was the strongest quarterly performance since March 2014. The hike takes annual growth to 5%, the biggest 12-month jump since June 2015.

Limited supply and strong demand are supporting values. According to the Farmers Weekly Land Tracker, only 11% more land has been publicly advertised so far this year compared with 2020, which, due to Coivd-19 restrictions, itself saw the lowest number of acres put up for sale on record.

Demand is increasingly being driven by three factors: Rollover relief, rewilding or sustainability focused buyers and carbon investors. Farmers accounted for 39% of buyers, according to our index, compared with the 55% who were either lifestyle purchasers or investors.

Efficient and entrepreneurial farmers who believe that Brexit offers more opportunities than challenges are still looking for more land, but they are rarely setting the pace during negotiations or paying large premiums.

Rewilding is easy to dismiss as a fad and many people have a slightly romanticised vision of what it entails, but it is now a genuine force in the market. Regenerative agriculture is also a popular aspiration for many.

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