Record low supply of farmland in 2019 looks almost certainly to be beaten in 2020, as the combination of Brexit, agricultural policy reform and the Covid-19 pandemic weigh on the market. Yet despite this uncertainty, farmland values have remained strong, highlighting the underlying confidence in rural investments and the ongoing resilience of the sector.

Publicly marketed farmland supply remains at historic lows, with 95,160 acres launched to market for the year to 30 September across Britain. Over half of this activity occurred between July and October and followed the momentum seen in June as the market emerged from lockdown.

This supply is 35 per cent down on the five-year average for Britain, with some larger differentials seen across Scotland (58 per cent down) and the South East (45 per cent down).

The publicly marketed acreage does not reflect what has been an active market for private transactions. Anecdotal evidence from our agents suggests in some sectors private market activity is over half of that in the public market, up from the historical average of closer to a third. 

95,160 acres bought to public market for the year to September 30. 

£8,690 per acre Savills prime arable indicator price.

The Savills Farmland Values Survey returned minimal changes to the end of September 2020 with Great Britain’s average 'All types' farmland indicator unchanged at £6,690 per acre and prime arable down 0.1 per cent to £8,690 per acre. Grade 3 arable was up 0.2 per cent to £7,323 per acre, while Grade 3 pasture land was unchanged at £5,384 per acre.

Although average values have been relatively static for the past 18-24 months, values achieved remain highly localised and primarily driven by location, asset quality and soil type. 

The country residential and amenity farmland market continues to show a remarkable uptick in interest as many urban-based buyers seek more green space out of the major centres. Evidence also suggests natural capital motives are beginning to gain traction in the market with strong demand for greenfield land with forestry planting potential and servicing infrastructure.

This sentiment is not shared by many commercial farmers who remain cautious, waiting for clarity in the future business environment before making major investment decisions.

Looking ahead, trade and policy reform are expected to develop in detail before the year end. The sector is set for radical change, however we expect the demand fundamentals to remain strong and the market steady with such low supply.

Further information

Contact Alex Lawson

Contact Angus Locke

Contact Savills Food & Farming

Contact Savills Land Valuation