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Spotlight: The Farmland Market

How did the GB farmland market perform in 2024, and what impact do we expect the government’s inheritance tax reforms to have on farmers and the land market?


During 2024, the farmland market in Great Britain was at its most active since 2018. Over 187,500 acres were marketed, 19% more than in 2023 and 14% above the average for 2012-2016 (our pre-Brexit and Covid reference point). As we forecasted last year, the national agricultural transition continues to encourage restructuring and generate more market activity, with recent challenging weather conditions and farming economics likely to be contributing factors too. In 2024, 8% of sales were due to retirement and 27% were due to debt and financial restructuring (figure 1).

However, this only tells part of the story as politics influenced when landowners launched their properties onto the market. An election was due, and a change of government was largely expected. Consequently, the market was much more active in the first half of the year (figure 2), when 63% of the total annual acreage was launched, compared to 55% in 2023. A likely explanation is that since early 2023, reports have suggested senior Labour MPs favoured increasing capital gains tax. In the run-up to the budget, it remained the media’s prime candidate for reform and motivated many to complete their deals before 30 October 2024. In the end, the increases were considerable but not to the extent suggested; the main rate for basic rate taxpayers was increased from 10% to 18% and for higher rate taxpayers, it increased from 20% to 24%. The rates applicable to Business Asset Disposal Relief, which is useful for retirement, are also on an upward trajectory.

Bigger farms marketed

More properties were on the market in 2024 and they were, on average, bigger. In total, 1,008 farms were publicly marketed – an 8% increase from 2023, and they averaged 186 acres in size, whereas the average unit size across the last five years has been 168 acres. This was because of an increase in the number of farms and estates marketed that exceeded 1,000 acres in size. In 2024, these properties accounted for 18% of the land area marketed, which was a significant increase as the average for the previous five years was 9% (figure 3). Various vendors were responsible for these sales, including institutions, local authorities as well as owners of family farms and traditional estates.

Farmland values

Overall, 2024 was a more challenging market than we’ve had for some years. Falling confidence in the farming sector, high interest rates discouraging investment, and fewer buyers motivated by rollover relief (following development land sales) meant competition was weaker – and agents had to work hard to stimulate interest.

Analysis of Savills sales in 2024 shows properties exceeded their guide price by an average of 14%

Andrew Teanby, Associate Director, Rural Research

The national average farmland value increased by less than 1% during 2024, but the strength of competition and prices achieved varied widely between and within regions. There were hotspots where limited supply or the desirability of the location drove prices up and sales progressed rapidly – while, in other areas, properties took longer to sell. In these cases, setting realistic guide prices helped to build momentum; analysis of Savills sales in 2024 shows properties exceeded their guide price by an average of 14%.

England

Compared to 2023 more land was marketed in every region of England. The East Midlands region was at its most active since 2011, with 21,900 acres marketed during 2024. This was largely due to an increase in the number of properties over 1,000 acres. In the neighbouring West Midlands region supply was 5% higher than in 2023 at 11,900 acres.

Farmland values continued to increase robustly in the south, whilst in the east the average value for many land types fell (figure 4). In the south, a deeper pool of buyers led to a more resilient market and record prices were achieved in Hampshire and Wiltshire. Strong demand for bare land in the South West led to grade 3 arable land values increasing by 5.7% over the year. The market for residential farms and pasture was tougher, and the value of poorer pasture fell slightly (-1.1%). In the South East, grade 3 arable land values increased by 2.3% and local authorities were particularly active as they sought land to help address their biodiversity net gain and nutrient neutrality requirements.

Results in the East of England varied; prime arable land values fell by 2.7% overall. However, values increased when demand for commercial-scale units exceeded supply and interest from non-farmers and amenity buyers was stronger. Farms with easier-to-manage soils proved popular and the market in mid-Suffolk was particularly strong. Plans to construct two 2,500-acre reservoirs in South Lincolnshire and Cambridgeshire are advancing; we expect this will drive additional demand in the eastern regions as farmers seek to rebuild their acreages after parts of their holdings are compulsory purchased.

Activity in the North of England exceeded the 2012–2016 average by 22% and there was a noticeable increase in the amount of land marketed in Cumbria. Farmers were the primary buyer type in the North of England and average values fell slightly, by 0.5% overall. Sellers included retirees, families restructuring their ownership and some farmers selling part of their holdings to help manage debts.


Scotland

In Scotland, 38,000 acres of farmland were marketed in 2024, compared to 26,800 acres in 2023 – an increase of 42%. Market activity, however, didn’t feel much higher because only 13% more units were publicly marketed, and the average unit size was much greater – with a higher proportion over 500 acres. Compared to historical benchmarks, activity remained subdued; 4% less land was marketed than the average for 2012–2016. Like in the rest of the UK, land values varied according to demand; there were examples of bare Class 3(1) land sold at £8,500 per acre and at £12,000 per acre within just a 10-mile radius. Overall, average land values increased by 12.2% in Scotland during 2024, and growth was stronger for arable land than pasture.


Wales

A twenty-year record for farmland supply was set in Wales in 2023; in 2024, it was 9% lower but remains high relative to the previous five years. Average land values fell for all grades, leading to a 2% reduction in Wales’ overall average land value. The increased cost of finance for buyers, higher farm running costs and farmers’ concerns about the Welsh government’s plans for its Sustainable Farming Scheme (SFS) all potentially played a role. Recent confirmation that the arbitrary 10% tree cover requirement has been removed from the scheme will be welcomed by farmers.


Read the articles within Spotlight: The Farmland Market below.

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