Historically, land use has been focused on producing food, fuel and fibre (figure 9). Before the Second World War, farmers experienced a period of low prices and low farm incomes; however, in just three years, from 1939–1942, the gross output of British agriculture increased by two-thirds and real farm net income increased more than threefold. This period led to the emergence of farmers and agriculture as a vital part of society – and the Agricultural Act of 1947 was born. Within it, the government committed to “promoting and maintaining….a stable and efficient agricultural industry capable of producing such part of the nation’s food and other agricultural produce as in the national interest”.

Fast forward to today and we are acutely aware of the shift in demands placed on land. While continuing to provide food, fuel and fibre, its use must incorporate and integrate development, energy and environmental recovery. As the UK population is expected to reach 78 million by 2050, climate change mitigation and adaptation need exploring, and our fossil fuels need replacing with renewables; the demands on our finite resource have considerably increased.

Contributors to the future appetite for farmland

The ongoing challenge for the government is balancing these demands across the country’s finite land base. The long-awaited first land use framework for England will seek to undertake this task whilst Scotland is on its third edition. Below, we have analysed the Labour Party’s policy commitments and their likely impact on different types of farmland buyers.

1. Supporting farmers to boost Britain’s food security
   
   Following Brexit in 2020, agricultural support from the UK government has been on a downward trajectory. In England, the acceleration of delinked payment cuts in 2025 and the decision to delay the publication of a national food strategy has not instilled the confidence needed in the sector for food production. Plans for the agricultural transitions in Scotland and Wales are progressing, but it is not yet possible to assess their impact on food production and the agricultural economy. However, the UK government has said it will “broadly maintain current levels of domestic food production”, with future support likely coming from grant funding to support productivity underpinned by the proposed 25-year farming roadmap. Resilient resources will be key – for example, prime arable land with a resilient water supply will be in demand. Fruit and vegetable production is also an opportunity as the UK is only 16% self-sufficient in fruit and 54% in vegetables.
   
   
2. Decarbonisation of the energy sector
   
   As part of a commitment to make Britain a clean energy superpower, Sir Keir Starmer said the UK would obtain 95% of its electricity from low-carbon sources by the end of the decade. The UK is accelerating its transition from fossil fuels to renewables, specifically increasing solar capacity from 14GW to 60GW by 2035. While a solar developer’s business model typically involves leasing rather than purchasing, there is still increased competition for land. Agrivoltaics is being developed (especially in Europe) to maximise the efficiency of land use, where dual-sided solar panels are alternated with strips of cropping.
   
   
3. Get Britain building
   
   The government has committed to build 1.5 million homes in England over the parliamentary period. Some lower-quality green belt land will be developed – for which the government proposes landowners should receive a “fair price”. The influence of rollover buyers on the farmland market has been weakening, but it will strengthen as the development sector gears up.
   
   
4. Get Britain moving
   
   Across the UK, significant public investment is expected in strategic roads and railways, UK-wide gigabit broadband, and electric vehicle charging points.
   
   
5. Ensuring nature’s recovery
   
   According to the World Wildlife Fund, “by 2030 we will need two earths” to continue to use natural resources as we do. The Environment Act 2021 sets out ambitions and targets to protect and recover the UK’s natural environment, whilst requirements such as biodiversity net gain, nutrient and water neutrality all require land.

In England, the agricultural transition moves at pace towards the Environmental Land Management schemes which aim to improve the environment and support sustainable food production. A significant public budget supports these goals (£5 billion over the next two years), but it is shrinking in real terms, so unlocking the flow of private sector funding is essential. Transition in Scotland and Wales is slower – Scotland’s Agricultural Reform Route Map promises to keep direct payments for the 2025, 2026 and 2027 scheme years whilst transitioning to become a global leader in sustainable and regenerative agriculture.

Why should the private sector care? It’s said nature provides most of the capital that businesses need to produce goods and services – making it the most important input in the global economy. The degradation of natural capital poses a real risk for businesses and incentivises them to invest in their future.

Factors affecting the GB farmland market

The commitments and targets are changing land use, leading to push and pull factors affecting the GB farmland market.

Buying a desirable home in the countryside or land on which to pursue sporting interests is the primary motivation for non-farmer buyers (figure 10). This motivation accounts for 62% of the acreage purchased by non-farmer buyers over the last five years. While 16% is purchased due to investment or development motivations and 21% because they intend to farm. Where institutional or corporate money has been entering the market, environmental motivations have accounted for the most land purchased (33%), followed by investment and development (29%).

Farmland supply and value forecasts

Farmland supply in 2024 exceeded our forecast, but a 16% reduction in machinery dispersal sales relative to 2023 could suggest that retirements triggered by the agricultural transition have peaked.

The government’s APR and BPR reform will stimulate discussions within farming businesses. This, along with fluctuating harvest results, extreme weather patterns and financial challenges, will prompt questions about the future viability of some farming businesses. In the short term, it is unlikely this will trigger farmland sales because cash held outside a business has a worse tax treatment than farmland. The planned inheritance tax reform introduces uncertainty, which usually leads to a period of reduced market activity. For these reasons, we’re forecasting a 20% reduction in supply to 150,000 acres in 2025 (figure 11). Following the introduction of the reform in April 2026, we expect an increase in supply from 2027 to fund farmer’s inheritance tax liabilities.

In the meantime, private investors may review their investment and sell if they have an alternative investment idea that outperforms farmland and its remaining 50% IHT relief. However, our data suggests only a small proportion of non-farmer buyers have been purely motivated by taxation; lifestyle and amenity reasons are usually their primary drivers (figure 10).

Values are forecast to hold for the next five years with marginal growth towards the latter end of the period (figure 11), resulting in a compound annual growth rate of 0.6% over the next five years. It will take time to see how the market and pricing react to the changes. From 2027, growth will be driven by market activity as a range of purchaser types compete, informed by greater clarity on land use priorities, opportunities and increased development activity. Local, regional and national variations in land supply and values will continue, and Savills Rural Agency colleagues are confident that the “best-in-class” will continue to sell well.

_{Read the articles within Spotlight: The Farmland Market below.}