To the end of September 2019, Britain has experienced its lowest number of open market farmland launches since our records began in 1995. The combination of political uncertainty and potential changes in agri policy continue to delay decisions to bring land to the market, but despite this, buyers remain active and farmland values have shown signs of growth for only the second time since March 2015.

For the farmland market, September is typically a rebound from the late summer recess (see graph below). However the latest quarter figures confirm a new record low with supply 40 per cent down on the same period last year (30 per cent down on the five-year average).

Total acres marketed fell to 105,000 acres which is even lower than the acreage recorded in September 2004 (116,000 acres) when uncertainty pre the introduction to the single farm payment affected the market. The largest differential was a 49 per cent year-on-year decline in Scotland where 21,214 acres were bought to market – over half the long-term average.

Britain's farmland supply (publicly marketed)

In light of low supply and active demand, green shoots are starting to appear in farmland values. Our Farmland Values Survey recorded an average net gain of 0.3 per cent across Britain, only the second positive result since the peak of land prices in early 2015. South West England recorded the largest quarterly increase of 1.2 per cent with East England 0.7 per cent and Scotland 0.5 per cent also registering gains. By land type, prime arable and dairy land showed the strongest value growth of 0.6 per cent and 0.8 per cent respectively.

Our farm agents report there are a number of committed buyers, with good quality properties priced appropriately seeing increased competition.  Alternatively, vendors with ambitious targets are experiencing a difficult sale process, often with a disappointing result.

Looking forward, the eventual outcome of Brexit negotiations is expected to increase market activity. Clarity in the political and economic environment may bring more land to the market as farmers assess renewed business objectives. Those with drivers to stay in farming will continue to support good quality farmland markets as they find more land to occupy by lease, contract or purchase. Other land types are also attracting interest as attention is turned to filling environmental offsetting agendas.

Intuition would tell you the fundamentals of supply and demand will play out, but for how long can the market sustain its current imbalance?

Further information

Read more: Market in Minutes: GB Farmland

Learn more about rural land values in the UK