Our Farmland Value Survey shows that the rate of growth in the average value of ‘all types of farmland across Great Britain has continued to slow; recording just 0.2% during the first half of 2015 compared with 0.5% during the first quarter.

However, the headline figures hide a number of interesting trends and changes. During the second quarter of 2015 average values across all land types have remained stable in Scotland, where values have remain unchanged since the end of 2013, the North of England and the South West of England.

The increase in average prime arable value growth has steadied with values, from record levels, softening (for the first time in six years) by -4.8% in the East of England, by -3.9% in the East Midlands and zero growth in the North of England (see Graph 1).

^{Source: Savills Research}

In contrast, as Graph 1 also illustrates, growth has continued in the West Midlands (1.9%) and the South East of England (2.6%).

The localised fall in prices may reflect a market where there is evidence of more price sensitive demand coupled with reduced competition between farmer and non farmer/investor buyers.

Conversely, average grade 3 grassland values, which in recent years have recorded slower growth than arable values resulting in a divergence of values of up to £4,000 per acre (see Graph 2), continue to strengthen.

Source: Savills Research

Average grade 3 grassland increased in value by almost 1% across England. The largest increases were again recorded in the West Midlands (2.1%) and the South East of England (2%) suggesting the improved confidence in the residential market has boosted demand for residential and diversified farms and estates. In addition, these farms are seen as good value relative to arable farms.

The market is finely balanced with a greater range in farmland values than in the recent past with sale prices very dependent on accessibility and the number of potential buyers.

View our updated report on rural land values in the UK