National View
Average arable land values across England and Wales saw the fastest year-on-year increase since 2016 in the first quarter of 2022. While growth over the previous quarter was a modest 0.6%, values have increased by 5.2% when compared to Q1 2021, reaching £8,889 per acre. Pasture land has also recorded strong growth. An average price of £7,261 per acre reflects a 1.4% growth in value against Q4 2021 and a year-on-year increase of 7.7%.
£8,889
per acre
Average
arable land value in q1
Q-ON-Q
CHANGE
0.6%
5.2%
y-ON-y
CHANGE
£7,261
per acre
Average
PASTURE land value in q1
Q-ON-Q
CHANGE
1.4%
7.7%
y-ON-y
CHANGE
Farmland
Market Update
Q1 2022
Key data and expert commentary outlining trends in the farmland market
"Marketed land is in short supply and demand is increasing from investors and alternative purchasers, so we expect prices will hold firm in the short- to mid- term.”
FIGURE 4
The geopolitical impact on commodities
Source: Carter Jonas, AHDB, Farmers Weekly, DEFRA
Inputs
Outputs
Crude Oil
Fertiliser
Red Diesel
Feed Wheat
Rapeseed Oil
Milk
Beef
Pork
CRUDE OIL
Unit
Latest data
Date
Quarterly change
Annual change
£/barrel
97
March ‘22
73.69%
108.19%
Fertiliser
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
649.3
Feb ‘22
5.37%
132.81%
Red Diesel
Unit
Latest data
Date
Quarterly change
Annual change
pence/litres
104.3
March '22
34.55%
73.98%
Feed Wheat
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
288.2
March ‘22
31.17%
49.80%
Rapeseed Oil
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
613.8
March ‘22
14.05%
52.45%
MILK
Unit
Latest data
Date
Quarterly change
Annual change
pence/litre
35.9
Feb ‘22
6.29%
19.97%
BEEF
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
412
March ‘22
0.78%
6.10%
Pork
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
143.7
Feb ‘22
-4.24%
-0.48%
Click a location for
a local overview
East of England
Arable
Pasture
£6,500
£5,500
£10,500
£9,350
£8,500
£6,850
0.0%
0.7%
6.9%
5.4%
Low
£ / acre
Prime
£ / acre
Average
£ / acre
Quarterly %
Annual %
East of England land values
Dec 16
Mar 22
£ per acre
£0
£12,000
Arable
Pasture
North West
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£8,000
£6,000
£11,000
£9,000
£9,500
£7,500
0.0%
3.4%
0.0%
11.1%
Pasture
EMAIL DEBORAH
01539 814914
Associate Partner
Deborah Lund
North West land values
Dec 16
£0
£12,000
Arable
Pasture
£ per acre
Mar 22
Wales
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£8,250
£4,250
£9,500
£8,500
£8,500
£6,500
0.0%
0.0%
0.0%
0.0%
Pasture
EMAIL Hugh
01248 360417
Partner
Hugh O’Donnell
Wales land values
£0
£10,000
Arable
Pasture
£ per acre
North East
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£6,000
£4,250
£8,250
£8,500
£7,000
£6,500
0.0%
0.0%
3.7%
8.3%
Pasture
EMAIL Sam
01423 707801
Associate Partner
Sam Johnson
North East land values
£0
£10,000
Arable
Pasture
£ per acre
Yorkshire and the Humber
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£7,750
£5,250
£10,500
£7,000
£8,750
£6,750
2.9%
3.8%
6.1%
8.0%
Pasture
EMAIL Sam
01423 707801
Associate Partner
Sam Johnson
Yorkshire and the Humber land values
£0
£12,000
Arable
Pasture
£ per acre
East Midlands
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£6,250
£6,000
£10,250
£8,000
£8,000
£7,000
0.0%
0.0%
3.2%
2.9%
Pasture
East Midlands land values
£0
£12,000
Arable
Pasture
£ per acre
West Midlands
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£8,500
£6,500
£12,500
£10,500
£10,500
£8,500
0.0%
0.0%
4.2%
6.3%
Pasture
EMAIL Edward
07826 890927
Associate Partner
Edward Beale
West Midlands land values
£0
£12,000
Arable
Pasture
£ per acre
South East
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£9,000
£7,600
£11,000
£8,850
£10,000
£8,500
2.6%
1.2%
8.1%
9.7%
Pasture
EMAIL Andrew
07880 084633
Partner
Andrew Chandler
South East land values
Dec 16
£0
£12,000
Arable
Pasture
£ per acre
Mar 22
Wales
West Midlands
East Midlands
South west
South east
East of england
Yorkshire & the humber
North east
North west
Get in touch
Click a trend for more info
EMAIL MARK
01223 346628
Partner
Mark Russell
EMAIL MARK
01223 346628
Partner
Mark Russell
Looking at longer-term performance, average arable land is still 12.6% below its peak of £10,167 in Q2 2016 and pasture land is 4.6% lower than the peak of £7,611 in the same quarter. Nonetheless, although hampered somewhat by moderate falls in value from 2017 to the start of 2021, growth over a 10-year period has been significant. Arable and pasture land values have risen 33.1% and 42.7% respectively since Q1 2012, representing annualised growth of 2.9% for arable land and 3.6% for pasture.
Although demand for agricultural land is rising, the level of newly marketed supply has remained subdued. 64,000 acres of farmland was publicly marketed in 2021, almost identical to the 2020 figure, and well below the 10-year average (to 2020) of 138,000 acres per annum (source: Farmers Weekly). We are now starting to see a modest increase in stock coming to the market in some areas, but in many locations there is still little sign of significant additional land being marketed.
However, reductions to the BPS and wider policy changes will focus the minds of straight farming operators over potential income loss and lower profitability, pushing them to assess their position and consider restructuring or diversifying. The continued erosion of BPS entitlements will expose those mid-scale farming enterprises which have been unable, or unwilling, to adapt to the changing subsidy regime. We may therefore see more of these types of holdings come to the marketplace in 2022.
South West
Arable
Low
£ / acre
Prime
£ / acre
£ / acre
Quarterly %
Annual %
Average
£8,500
£5,000
£11,000
£9,000
£9,750
£8,000
0.0%
0.0%
14.7%
8.1%
Pasture
EMAIL David
01823 428591
Partner
David Hebditch
South West land values
£0
£12,000
Arable
Pasture
£ per acre
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
EMAIL Andrew
07880 084633
Head of Agency
Andrew Chandler
Source: Carter Jonas, AHDB, Farmers Weekly, DEFRA
Commodity price trends
Inputs
Outputs
Crude Oil
Fertiliser
Red Diesel
Milk
Beef
Feed Wheat
Rapeseed Oil
Pork
CRUDE OIL
Unit
Latest data
Date
Quarterly change
Annual change
£/barrel
55.8
Dec ‘21
4.4%
52.3%
Fertiliser
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
616.2
Nov ‘21
78.1%
181.6%
Red Diesel
Unit
Latest data
Date
Quarterly change
Annual change
pence/litres
77.5
Dec ‘21
15.3%
48.9%
Feed Wheat
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
219.7
Dec ‘21
11.2%
11.9%
Rapeseed Oil
Unit
Latest data
Date
Quarterly change
Annual change
£/tonne
538.2
Dec ‘21
5.6%
42.6%
MILK
Unit
Latest data
Date
Quarterly change
Annual change
pence/litre
32.5
Oct ‘21
6.8%
8.5%
BEEF
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
408.8
Dec ‘21
-0.6%
10.5%
Pork
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
148.4
Dec ‘21
-7.7%
-3.6%
Tap a trend for more info
Tap a location for
a local overview
WEST MIDLANDS
NORTH EAST
SOUTH WEST
WALES
NORTH WEST
YORKSHIRE & HUMBER
EAST MIDLANDS
EAST OF ENGLAND
SOUTH EAST
2019
EMAIL DEBORAH
CLOSE
01539 814914
Senior Surveyor
Deborah Lund
View on desktop for a full overview
North West land values
£0
£12,000
£ per acre
Arable
Pasture
2019
CLOSE
View on desktop for a full overview
North East land values
£0
£10,000
£ per acre
01423 707801
Associate
Sam Johnson
EMAIL Sam
Arable
Pasture
2019
CLOSE
View on desktop for a full overview
Yorkshire & The Humber
land values
£0
£12,000
£ per acre
01423 707801
Associate Partner
Sam Johnson
EMAIL Sam
Arable
Pasture
2019
CLOSE
View on desktop for a full overview
Wales land values
£0
£10,000
£ per acre
EMAIL Hugh
01248 360417
Partner
Hugh O' Donnell
Arable
Pasture
2019
CLOSE
View on desktop for a full overview
East Midlands land values
£0
£12,000
£ per acre
Arable
Pasture
EMAIL mark
01223 346628
Partner
Mark Russell
2019
CLOSE
West Midlands land values
£0
£12,000
£ per acre
EMAIL michael
07826 890927
Associate
Edward Beale
Arable
Pasture
View on desktop for a full overview
2019
CLOSE
View on desktop for a full overview
East of England land values
£0
£12,000
£ per acre
EMAIL mark
01223 346628
Partner
Mark Russell
Arable
Pasture
2019
CLOSE
View on desktop for a full overview
South East land values
£0
£12,000
£ per acre
07880 084633
Partner
Andrew Chandler
EMAIL Andrew
Arable
Pasture
2019
CLOSE
View on desktop for a full overview
South West land values
Dec 16
£0
£12,000
Arable
Pasture
£ per acre
Mar 22
EMAIL david
01962 833386
Partner
David Hebditch
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
Dec 16
Mar 22
While there is more confidence in the market as the economic insecurity arising from the Covid-19 pandemic and Brexit fades, sizable obstacles still exist. There is concern around the changing subsidy payments, with the end of the Basic Payment Scheme (BPS) and the Government’s announcement of the Environmental Land Management scheme (ELMs). This is compounded by evolving geopolitical challenges resulting from the Russia-Ukraine War. Yet marketed land is in short supply and demand is increasing from investors and alternative purchasers, so we expect prices will hold firm in the short- to mid- term.
Source: Carter Jonas
10.0%
8.0%
Mar 13
% per acre
Pasture
Arable
Mar 22
6.0%
4.0%
2.0%
0.0%
-2.0%
Source: Carter Jonas
12,000
10,000
Mar 12
£ per acre
Pasture
Arable
Mar 22
8,000
6,000
4,000
2,000
0
Average land values in
England and Wales
Annualised Growth of Average Land Values in England and Wales to March 2022
FIGURE 2
Stock levels are at a historic low. According to Farmers Weekly, 3,230 acres of land was publicly advertised for sale in Q1 2022, 55.92% lower than Q1 2021. Looking at long-term trends, this figure is 43.3% below the 5-year average and 66.3% lower than the 10-year average. As such, it is unsurprising that prices have accelerated to reflect competition in the market. However, we anticipate that supply will increase slightly over the upcoming months as businesses make profitability-based decisions or farmers utilise the ‘Lump Sum Exit Scheme’ and choose to retire.
Supply and the rise of the environmental buyer
Annual Publicly Marketed Farmland Supply
FIGURE 3
0
5000
10,000
15,000
20,000
25,000
30,000
Acres
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
Demand is unlikely to subside in the near-term, driven by high interest from environmental buyers looking to offset carbon emissions and biodiversity loss from development. Carter Jonas has seen an increase in requirements for both established woodland and land for planting woodland, in particular. As the wider influence of natural capital unfurls and ELMs brings ‘green’ money to the marketplace, land prices are likely to increase further.
Rocketing input prices and labour shortages may result in some farmers being priced out of the market by these emerging buyers as profit margins compress. As a result, we are likely to see increasing amounts of agricultural land being taken out of food production and used for environmental purposes.
However, looking only at on-market supply gives us a partial picture of availability. Off-market transactions are proving popular, and buying agents are having to act quickly to secure prime property being offered in such a manner.
Demand is also mounting from wealthy private individuals, who are incentivised to buy land in light of low (albeit rising) interest rates. Where land values do not typically correlate with other asset types that are more susceptible to economic volatility, such as equities, taking cash out of reserves and purchasing farmland offers a safer and more diversified investment. As a result, non-farming purchasers are going to be more evident in the marketplace looking to capitalise on the stability of land values.
This provides a reason for the surge in lifestyle land values, which have recorded an 18.7% annual increase. Over a 5-year period, lifestyle land values are 22.9% higher, and over 50% higher across a 10-year period. This reflects an annualised growth of 4.2% over both 5- and 10-years. The interest coming out of urban has been noteworthy, as individuals and families have moved from the city to more rural and semi-rural locations in search of more space, a more pleasant environment, and better value for money.
This has been reflected in some stellar rises in land values. The South East, in particular, recorded a 14.3% rise in average lifestyle land values in the quarter and 48.1% growth annually, with the gap between prices achieved for prime plots and lower quality sites widening.
The impact of the war in Ukraine is being felt worldwide, triggering spiralling prices and creating a threat of global shortages. Farming inputs have become significantly more expensive with Ukraine and Russia, as key commodity exporters, being almost wholly removed from the supply chain. Geopolitical turbulence has destabilised the agricultural market and accelerated already rising input prices, making it difficult for many farmers to remain profitable.
Commodity price trends
Lamb
Sheep
Chicken
Where the first couple of months of the year saw modest price rises, March delivered considerable growth. The agricultural industry absorbs high amounts of energy directly through the use of fuel, gas and electricity, and indirectly through fertilisers and pesticides, for instance. It is not possible to predict how high prices will go, but we expect that there will a lasting effect on global energy markets.
The price of red diesel saw growth of 2.0% from the end of Q4 2021, but then jumped 31.9% from February to March, being directly impacted by the war in Ukraine. Crude oil has faced an even greater increase, reaching £97/barrel in March 2022, up 108.2% from a price of £46.59 in
March 2021.
Reaching a high of £649.3/tonne in February, fertiliser saw an exceptionally sharp annual increase at 133%, and prices for the end of March have been reported by Farmers Weekly to be anywhere between £850 and £1,000/tonne. £1,000/tonne, the higher end of the scale, represents an increase of 62.3% in the quarter and 253% over the year.
Output prices have also been rising, although not at comparable rates. Crop prices, in particular, have risen by around 50%, allowing British farmers to sell at an inflated price. Yet, considering that profit margins will be dependent on last year’s input prices, the impact on profit margins will come later. As per data from the Food and Agriculture Organization of the United Nations, Russia was the top global wheat exporter in 2021 at 18% of global shipments, and Ukraine stood as the sixth largest at 10% of the global share. Considering that many farmers in Ukraine who would have otherwise started to sow in March and harvest in the summer have been prevented from doing so, we can expect a supply gap over the coming year and that domestic prices will remain inflated.
AHDB data shows that the estimate net margin per pig in Q4 2021 was -£39, down on -£13 in Q3; input prices have since risen and these margins will have been squeezed tighter. However, other livestock, specifically beef and poultry, have fared slightly better.
£350
£1,800
£1,075
4.9%
34.4%
Hill
£500
£1,500
£1,000
0.0%
0.0%
Hill
£1,650
£2,750
£2,100
5.0%
10.5%
Hill
£10,700
£13,750
£12,250
4.3%
6.5%
Lifestyle
£1,600
£3,700
£2,600
4.0%
8.3%
Hill
£10,500
£15,500
£13,000
2.0%
4.0%
Lifestyle
£10,500
£12,500
£11,500
2.2%
4.5%
Yorkshire Wolds
£13,500
£25,000
£16,750
0.0%
8.1%
Lifestyle
£7,500
£12,000
£9,000
0.0%
0.0%
Silts and Fen
£10,000
£20,000
£15,000
0.0%
42.9%
Lifestyle
£13,000
£22,000
£16,750
1.5%
8.1%
Lifestyle
£7,500
£12,000
£9,000
0.0%
2.9%
Silts and Fen
£14,000
£30,000
£20,000
14.3%
48.1%
Lifestyle
SHEEP
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
579.9
Feb ‘22
-98.40%
-3.19%
LAMB
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
565.1
March ‘22
-8.86%
-10.09%
CHICKEN
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
239.0
Feb ‘22
5.40%
9.33%
Annualised growth of average land values in England
and Wales
FIGURE 2
Average land values in
England and Wales
FIGURE 1
Average land values in
England and Wales
FIGURE 1
Average land values in
England and Wales
FIGURE 1
Annualised growth of average land values in England
and Wales
FIGURE 2
Looking at longer-term performance, average arable land is still 12.6% below its peak of £10,167 in Q2 2016 and pasture land is 4.6% lower than the peak of £7,611 in the same quarter. Nonetheless, although hampered somewhat by moderate falls in value from 2017 to the start of 2021, growth over a 10-year period has been significant. Arable and pasture land values have risen 33.1% and 42.7% respectively since Q1 2012, representing annualised growth of 2.9% for arable land and 3.6% for pasture.
Demand is unlikely to subside in the near-term, driven by high interest from environmental buyers looking to offset carbon emissions and biodiversity loss from development. Carter Jonas has seen an increase in requirements for both established woodland and land for planting woodland, in particular. As the wider influence of natural capital unfurls and ELMs brings ‘green’ money to the marketplace, land prices are likely to increase further.
Rocketing input prices and labour shortages may result in some farmers being priced out of the market by these emerging buyers as profit margins compress. As a result, we are likely to see increasing amounts of agricultural land being taken out of supply and used for environmental purposes.
However, looking only at on-market supply gives us a partial picture of availability. Off-market transactions are proving popular, and buying agents are having to act quickly to secure prime property being offered in such
a manner.
Demand is also mounting from wealthy private individuals, who are incentivised to buy land in light of low (albeit rising) interest rates. Where land values do not typically correlate with other asset types that are more susceptible to economic volatility, such as equities, taking cash out of reserves and purchasing farmland offers a safer and more diversified investment. As a result, non-farming purchasers are going to be more evident in the marketplace looking to capitalise on the stability of land values.
This provides a reason for the surge in lifestyle land values, which have recorded an 18.7% annual increase. Over a 5-year period, lifestyle land values are 22.9% higher, and over 50% higher across a 10-year period. This reflects an annualised growth of 4.2% over both 5- and 10-years. The interest coming out of urban has been noteworthy, as individuals and families have moved from the city to more rural and semi-rural locations in search of more space, a more pleasant environment, and better value for money..
Lamb
Sheep
Chicken
LAMB
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
565.1
Mar ‘22
-8.86%
-10.09%
SHEEP
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
579.9
Feb ‘22
98.40%
-3.19%
CHICKEN
Unit
Latest data
Date
Quarterly change
Annual change
pence/kg dw
293.0
Feb ‘22
5.40%
9.33%
The geopolitical impact on commodities
This has been reflected in some stellar rises in land values. The South East, in particular, recorded a 14.3% rise in average lifestyle land values in the quarter and 48.1% growth annually, with the gap between prices achieved for prime plots and lower quality sites widening.
The impact of the war in Ukraine is being felt worldwide, triggering spiralling prices and creating a threat of global shortages. Farming inputs have become significantly more expensive with Ukraine and Russia, as key commodity exporters, being almost wholly removed from the supply chain. Geopolitical turbulence has destabilised the agricultural market and accelerated already rising input prices, making it difficult for many farmers to remain profitable.
Where the first couple of months of the year saw modest price rises, March delivered considerable growth. The agricultural industry absorbs high amounts of energy directly through the use of fuel, gas and electricity, and indirectly through fertilisers and pesticides, for instance. It is not possible to predict how high prices will go, but we expect that there will a lasting effect on global energy markets.
The price of red diesel saw growth of 2.0% from the end of Q4 2021, but then jumped 31.9% from February to March, being directly impacted by the war in Ukraine. Crude oil has faced an even greater increase, reaching £97/barrel in March 2022, up 108.2% from a price of £46.59 in March 2021.
Reaching a high of £649.3/tonne in February, fertiliser saw an exceptionally sharp annual increase at 133%, and prices for the end of March have been reported by Farmers Weekly to be anywhere between £850 and £1,000/tonne. £1,000/tonne, the higher end of the scale, represents an increase of 62.3% in the quarter and 253% over the year.
Reaching a high of £649.3/tonne in February, fertiliser saw an exceptionally sharp annual increase at 133%, and prices for the end of March have been reported by Farmers Weekly to be anywhere between £850 and £1,000/tonne. £1,000/tonne, the higher end of the scale, represents an increase of 62.3% in the quarter and 253% over the year.
EMAIL SOPHIE
020 7493 0685
Senior Research Analyst
Sophie Davidson
Mar 13
Mar 14
Mar 15
Mar 16
Mar 17
Mar 18
Mar 19
Mar 20
Mar 21
Mar 13
Mar 14
Mar 15
Mar 16
Mar 17
Mar 18
Mar 19
Mar 20
Mar 21
(Please view desktop version for graphs)
