The average price of bare agricultural land in England and Wales hit a new all-time high of £9,250 per acre in Q1 2024, according to the latest Farmland Index from Knight Frank.
The firm’s Q1 data shows farmland values rose 1% over the previous quarter taking the annual rate of price growth to 6%. Knight Frank said the increase in land values was being driven by a combination of different factors, including government funding for environmental land management programmes and continued purchasing activity from people looking to mitigate rollover tax liabilities.
Andrew Shirley, head of rural research at Knight Frank, said: ”The farmland market has remained remarkably resilient amid economic headwinds. Our research highlights that low supply volumes combined with strong demand from a wide range of buyers, including those looking to participate in environmental schemes, are supporting prices.”
Looking ahead, Knight Frank said that the phasing out of EU farm subsidies and generally lower commodity prices could weigh on the market, however, the fundamental supply demand imbalance is expected to keep prices within a narrow range.
Will Matthews, head of farms and estates at Knight Frank, said: “Despite short-term challenges like subsidy reforms and fluctuating commodity prices, the underlying fundamentals driving demand for agricultural land remain very favourable. With limited supply, farmland continues to be an attractive asset class that can provide a hedge against inflation and exposure to the growing environmental marketplace. We anticipate ongoing investor interest in 2024, especially from those seeking to participate in biodiversity and climate initiatives on their land.”
