The Agricultural Bill published in September heralds a new era for the rural economy, challenging everything from tenancy arrangements to supply contracts.

The Bill itself is simply enabling legislation, with much of the detail still to be determined, but it is clear that there will be a marked change from what we are used to under the Common Agricultural Policy (CAP).

However, there is now certainty around the timing and structure of the demise of the Basic Payment Scheme (BPS) and, although we don’t know the detail or the quantity of cash available in future, payments for public goods is a common theme.  

Our latest research shows that the downward pressure on average farmland values may be easing (see table, below). Over the past 12 months the average value of ‘all types’ of farmland in Great Britain fell by -1.3 per cent to £6,700 per acre, according to our Farmland Value Survey. This compares with -3 per cent and -3.8 per cent in the 12 months to September 2017 and September 2016 respectively. The average value of prime arable land fell by a similar amount at -1.6 per cent to the end of September.

There continues to be a wide range of values achieved either side of the average with factors including location, size of holding and neighbouring interest often coming into play.

It will remain to be seen whether the additional market activity this year will halt this trend. In Great Britain 173,000 acres of farmland were publicly marketed during 2018 (end September) compared with 136,000 acres in 2017 (end September), an increase of 27 per cent. This includes two large rural portfolios namely Strutt & Parker (Farms) Ltd in the East of England and Buccleuch’s Evertown portfolio in the Scottish Borders.

There has been strong initial interest both domestic and overseas in these two large portfolios demonstrating a continuing confidence in the sector. For the overseas buyer the current weakness of the pound against the dollar is an added attraction.

Downward pressure on average values across all land types

Source: Savills

Further information

Contact Savills Rural Research