Average values continued to rise in the third quarter of 2014. However, the market remains thin and these averages mask the diverse range of values achieved.

According to our Farmland Value Survey, the average value for prime arable land strengthened by 3.2% across Great Britain to just over £9,750 per acre during the third quarter of 2014. This equates to a 12.8% value increase in average prime arable land since the beginning of the year and year-on-year growth of 17.9%.

During the third quarter growth was concentrated in England (+3.8% for ‘all land types’) with strongest growth recorded for some of the poorer quality land. This suggests buyers are beginning to recognise its value compared to arable land.

Conversely our research shows that the growth in values for prime and average quality land in England slowed during the third quarter as sentiment became more bearish on the back of weak commodity prices and the knock-on effect on farm incomes and cash flows.

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During the first three quarters of 2014 farmland value growth in Scotland and Wales has been muted with no growth in Scotland and just a 2.4% increase in average ‘all types’ of land in Wales.

Uncertainty over the implementation of CAP reforms has been a factor in both areas and Scotland had the additional issues of the Independence Referendum and Land Reforms to contend with.

While the Scottish Government’s proposed new LBTT (Land Building Transaction Tax) rates, announced by Secretary for Finance Jonathan Swinney (9 October 2014) will have a significant impact on the prime residential property market in Scotland, we suggest the picture for the rural sector is far less dramatic.

Like commercial property transactions, high value farms and estate sales are not being overly compromised by the new tax. The Scottish rural market offers incredible value for money and the relatively minimal rise of 0.5% will not impact buying decisions unduly.

Average values do conceal regional variations and the farmland market is increasingly diverse in terms of value now being closely linked to location, land quality and type as well as the residential weighting of the farm.

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Taken from
Market in Minutes: UK Farmland Market - Q3 2014