Supply of farmland in the south of England rising and modest growth forecast for average values

The supply of farmland in the south of England continued to rise in 2023, which was a pivotal year for farmland supply across Great Britain.
In the South East of England 17,000 acres of farmland were marketed during 2023 compared with 14,900 acres in 2022, an increase of 15%. In the South West, 21,200 acres of farmland were marketed during 2023 a 13% increase from 18,700 acres in 2022.
Great Britain as a whole saw 157,200 acres marketed, which is 20% more year-on-year and 15% more than the previous five-year average, but still below the 162,000 acres average recorded during the years between 2003 and 2016.
In its latest rural research publication Spotlight: The Farmland Market Savills suggests there is potential for publicly marketed supply to increase further with around 180,000 acres forecast per year by 2028.
Andrew Teanby, associate director Savills rural research comments, “Farmland supply is increasing because of changes largely driven by the agricultural transition; and our research into the number of machinery sales would seem to support this.”
Over the past three years retirement and change in farming policy have become far more common reasons for farmers selling their farm machinery compared to 2015, when new agricultural policies were not on the horizon. According to Savills analysis there were 71% more machinery sales in 2023 than in 2015 (GB).
Teanby adds, “Using the rise in machinery sales as an indicator we remain confident that more land will come onto the market because the sale of farmland is one potential outcome following a change in farming system/activity, tenancy surrender or retirement”.
Values
The Savills Farmland Value Survey shows that during 2023 the average value of grade 3 arable land in the South East rose by 2.4% to £9,600 per acre. In the South West average values increased by 7.7% to £9,900 per acre. This compares with an average increase across Great Britain, for grade 3 arable land, of 1.9% (to average £8,700 per acre) for the same period.
The survey also shows that during 2023 the average value of grade 3 pasture land in the South East rose by 4.6% to £8,000 per acre and in the South West it increased by 9.2% to £8,500 per acre.
Savills value forecasts for the farmland sector during the next five years are influenced by continuing economic challenges, weaker demand from all types of buyers in the marketplace and increased availability of farmland.
By land type across GB, forecasts include 2.5% average annual growth for grade 3 farmland and 2% per annum for grade 3 pasture. Prime arable land, where the main purpose is food production, will continue to appeal and average values are forecast to increase by 3% per annum over the next five years.
Geoff Jones, Savills head of rural agency in the south, says: “Within any land type the range of values achieved remains significant. Individual sales will be influenced by specific property attributes and marked dynamics such as the location and strength of neighbour interest. However, as we have witnessed recently unforeseen global and economic shocks have the potential to impact all markets.
“Demand for all land types across the south west continues particularly for commercial farms and bare land blocks where interest was competitive due to the constrained supply. The off-market and private sale remains highly active. The key to a successful sale continues to be thorough preparation prior to launch and realistic pricing to encourage competitive interest.”

www.savills.co.uk