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2025 seems markedly different to 2024. The incessant rain of the last two years continued into the spring… then halted abruptly, seemingly never to return. Where there were puddles, there is now dust. Crops drilled into sodden ground are dying on their feet from a lack of water and the grass has not grown. It will be an early harvest, hopefully with low drying costs, but yields will be unremarkable. Straw and fodder will be in short supply.
High input prices and low commodity prices persist (although strong livestock prices continue), and of course the industry is still coming to terms with the inheritance tax changes, which may or may not bring a few holdings to the market.
There has been a modest but noticeable increase in the amount of land which has come forward this year (the Farmers Weekly estimates this as a rise of 14% over 2024). This is hardly a flood, but mobile buyers certainly have more choice.
So how has this news affected the agricultural land market? Surely, diminished profitability, increased supply and unwelcome tax changes must cause prices to drop?
Certainly, guide prices appear to be set slightly more cautiously this year. Agents and landowners are perhaps keen to get any sale off to a good start.
However, sale prices do not seem to have fallen noticeably. Decent arable land continues to make something in excess of £10,000/acre, with £12,000/acre not uncommon. Perhaps some of the higher outlying prices from last year, where there was local competition, has calmed down, but it really isn’t very different to 2024.
How can this be so?
Most importantly, the increase in supply is modest compared to the backlog of unsatisfied demand from last year. We do not see that the tax changes have brought that much land forward, yet at least, perhaps because farmland still holds tax advantages over other investments. The supply of rollover buyers continues to be replenished, and larger units will attract interest from all over the country.
Of course, there are many regional variations. Some parts of the country have seen a number of farms come forward, while farms remain in short supply in other areas. The financial capacity of the local farming community is always a factor, and as usual I would expect to see a variation of several thousand pounds per acre for very similar land based solely upon that local demand. This is particularly the case for smaller blocks.
It is also a truism that farming is a long-term venture, with time horizons of decades or even generations. Farmers do not get too carried away by a few easy years, and likewise they are used to living with a few difficult years. If the right land comes up locally then it can be hard to ignore. When will the chance come again?
This season, we have offered Grange Farm, Weston Underwood in North Buckinghamshire, being a 356-acre arable farm with buildings and planning consent for a farmhouse. At the time of going to press, we have not exchanged contracts, but I can report that local bidding has taken the price beyond the guide of £4,000,000.
We are just launching to the market Halse Farm, Taunton, Somerset, being an 843-acre arable farm with farmhouse, holiday lets and farm buildings. The guide price for the whole is £10,180,000, and we shall see over the next week or two what interest is received. Even before going to the market, we have received approaches.
In summary, there is a little caution with a slightly increased supply of land, but the latent demand for farmland persists, and it seems that the market is not greatly changed from last year.
For more information or to discuss selling your land or farm with our agency team, please contact David.
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