General election fails to dent farmland allure - Farmland Index Q2 2024
The market for farmland may have slowed in the run up to the general election, but prices remain robust
10 July 2024
51ยายื
The market for bare farmland remained stable in the second quarter of the year, according to the latest results from the 51ยายื Farmland Index, which tracks the value of bare agricultural land in England and Wales.
Average values edged up by almost 1% to hit another record high of £9,335/acre. Over the past 12 months prices have risen by over 5.5%, comfortably outperforming other property classes such as prime central London residential (-2.4%) and the wider UK housing market (+2.3%). Although the FTSE 100 equities index has had a better year (+9.6%) than farmland, over the longer-term its growth has been less impressive: +10.5% compared with a rise of 33% for agricultural land.
Although, as discussed below by Will Matthews our Head of Farms & Estates, the UK general election unsurprisingly caused a lot of people to put their property plans on hold for a while, the farmland market remains robust from a supply and demand perspective.
The volume of land put up for sale so far this year has increased compared with 2023 but is still at historically low levels. According to the Farmers Weekly Land Tracker, which keeps tabs on publicly advertised farmland sales, under 50,000 acres had come to the market by the end of June.
Regardless of the concerns that some wealthy individuals have over the intentions of a Labour government when it comes to taxation, many of the factors supporting the farmland market are unlikely to disappear. The introduction earlier this year of biodiversity net gain requirements for all property developments is already encouraging yet more interest from green investors in farmland that could potentially be used to create valuable BNG credits.
And with Sir Kier Starmer publicly stating that he wants to turbocharge housebuilding in the UK with the delivery of 1.5 million new homes in his first term of office, not to mention a significant uplift in the construction of new onshore wind and solar projects, as well as ambitious treeplanting targets, the hunger for farmland should quickly resume.
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