Shropshire Farming Talk: Land Prices: Trends, Challenges and What’s Next

 Before we look forward to 2025, let’s take stock of what has gone before. 

The land sales market throughout 2024 has shown strength, despite an ever-changing political and economic backdrop. 

Early spring saw a steady rise in average prices for all types of land, generally between 5% and 10%, with regional variations being much more apparent than in previous years. 

There was also a large disparity in the price between the best quality arable land and the slightly poorer grassland. 

This increase levelled off throughout the year due to the pressures of higher interest rates, decreasing commodity prices and narrowing of farm profit margins. 

The range of buyers has remained similar to previous years, with farmers, investors and those wishing to purchase for environmental reasons (carbon offsetting and biodiversity net gain) all in the market place to purchase land.

In recent months the uncertainty following the election, and the subsequent Budget, may have initially tempered some peoples’ enthusiasm to purchase land. 

The potential tax implications of the Budget (subject to being approved or amended in the Finance Bill) will surely be a consideration for anyone looking to purchase land in the future. 

Whilst, historically, tax has never been a principal driver for land values, the old adage of “they’re not making any more land” will certainly ring true, and those farmers who are looking to expand a farming enterprise will undoubtedly still seek to secure land when the opportunity arises despite potential changes to any kind of Inheritance Tax Relief. 

The amount of agricultural land being available for farming purposes is likely to continue to decrease, particularly with the current Government’s policy on housing development. A reduction in supply may well keep prices similar to the current level.

It’s too early to predict exactly what will happen in 2025 and beyond, but it is my feeling that land will continue to be sought after, although there may be some realignment as to the level at which farmers or investors are willing to part with their hard-earned money. 

The demand for the lower grade land from those with environmental considerations, may lessen the gap in values for the better quality land. Anyone looking to buy or sell should plan carefully and take the relevant advice to ensure asset values are maximised.

by Annabel Fearnall,  a Partner at Barber Rural, who can be contacted at a.fearnall@barbers-rural.co.uk