Our Farmland Value Survey shows that the average value of ‘all types’ of farmland across Great Britain softened slightly, by -0.7%, between January and September this year. However, this hides a number of dynamics in the market.

The downward pressure on farming profits from prices falling for many agricultural commodities is becoming stronger and for some types of farm, most notably prime arable land, is now outweighing the upward pressure that the lack of land to buy was putting on values. That said, demand from non-farmers, either amenity or investors, remains firm and the amount of land bought to roll over capital gains is increasing, but is still below pre-recession levels.

In Wales, average values for ‘all types’ of land stayed stable in the third quarter and so, after rises earlier in the year, are 2% to 5% higher, across the sectors than they were at the start of the year.

Scottish values have not changed at all in 2015 and have been relatively stable since December 2013.

It is in England where most of the change is happening. The overall fall of -1.2% in average values across ‘all land types’ in both the third quarter and since the start of 2015 does not tell the whole story (see graph 1).

^{Source: Savills Smiths Gore Research}

For arable land, the value of prime land fell in most regions in the third quarter, by -1% to -2%, mostly as a result of weaker demand as the amount of land available to buy remains historically low. Despite this, rises in values earlier in the year mean that values have risen or been stable in all regions apart from the Eastern Counties and East Midlands.

The regions where prime arable values are under most pressure are the South East of England, the East of England and the East Midlands. Here, values are higher than in the rest of the country and so this appears to be a change that is reducing the difference in prime values between regions (see graph 2).

Source: Savills Smiths Gore Research

Livestock values have started to fall or are stable across England, with poor land falling more than better grade 3 land. Quarter three falls have not been enough to wipe out the rises in values earlier in 2015 so average values are still higher than they were at the start of the year.

The dairy farm market is in a similar position to livestock land. Values have started to fall or are stable but have not fallen enough to negate the rises in values from earlier in the year.