The value of English farmland increased by 2 per cent in Q3, taking the rise in the year to date to 12 per cent. Year on year, values have risen by an average of 15 per cent, outperforming the housing market (+10 per cent), the FTSE 100 (+5 per cent) and gold (-9 per cent).
According to the Knight Frank Farmland Index, the price of commercial farmland, without any buildings, now stands at £7,689 per acre.
Despite a recent fall in the price of agricultural commodities, strong demand from both farmers and investors – coupled with limited supply – continues to push up prices.
Farmers remain keen to acquire neighbouring land when it comes to the market, while the interest from investment funds is illustrated by the acquisition of the Co-op farm portfolio by the Wellcome Trust for £250 million.
Agricultural land, with little value tied up in period farmhouses, is selling very quickly, while estates with substantial residential property are taking longer.
In some cases this can lead to parts of the estate being sold separately at premium prices.
“I think this trend really highlights the strength of the farmland market,” says Clive Hopkins, head of Knight Frank’s Farms & Estates team.
“Traditionally it has been the house leading the sale, now often it is the land.”
