Despite an increase in the amount of farmland being sold so far this year, there are warnings that recent price rises are now starting to level off.
In its latest rural land report, estate and letting agents Savills claims that yearly returns to the end of September show the average value of all types of farmland across Great Britain dropped very slightly by 0.5 per cent to around £7,340 per acre.
“There are signs that the growth in farmland values is slowing,” said Alex Lawson, director of Savills farms and estates.
Average values for the all types of farmland across England, Scotland and Wales were recorded at £8,100, £4,560 and £5,630 per acre respectively. Scottish values have remained stable over the past few years with values lagging behind those recorded south of the border.
Savills says that around 130,000 acres has been publicly marketed in the UK in 2015 to 20 September, 10 per cent more than in the same period in 2014, but still one per cent less than the average for the same periods during the previous five years from 2010 and 2014.
“The pressure has been greatest on the high values achieved for arable land in England over the past few years and our research suggests that average prime quality arable land values across England have fallen around by 2.4 per cent during this year to just under £10,000 per acre,” Lawson explained.
“In contrast average grassland values have increased by a similar but positive percentage to around £6,440 per acre.”
He added: “The divergence, over the past eight to 10 years, between average values for arable and grassland and also between average values in England compared with those in Scotland and Wales, may present significant opportunities.”
Summing up the outlook for farmland Savills’ head of rural research, Ian Bailey, said: “The market has become more finely balanced over the past 12 months with demand more price sensitive and the very high headline values are achieved less frequently.
“Local market knowledge, for both buyers and sellers, is therefore critical in a market where prices achieved range widely from average values.”