West Midlands farmland values continue to rise as confidence returns

At the half year point, analysis from rural property agents Savills shows that although prime arable land remains the most valuable farmland asset, poorer quality pasture land is still in high demand among buyers looking for environmental opportunities.

According to the research, prime arable land traded at an average of £10,177 an acre in the West Midlands in the three months to the end of June this year, up 1.7 per cent when compared to the end of March, and 12.3 per cent more compared to the same period in 2022 when the average price stood at £9,065 an acre.

The North of England has the highest average price for prime arable – topping out at £11,272 per acre. Across Wales, which has seen a 33 per cent increase in publicly marketed farmland between March 2022 and March 2023, the average price per acre for prime arable sits at £8,000 – representing an increase of 6.6 per cent in the three months to the end of June and 10.3 per cent compared to the same period in June 2022, when the average price was £7,250 an acre.

Nationally, prime arable land traded at an average £10,242 an acre at the end of June – a rise of 8.7 per cent year on year.

The average price for ‘all types’ of farmland in the West Midlands – pasture and arable – sits at £8,954 an acre. This represents a rise of 2.4 per cent when compared to the end of March this year and 16.7 per cent up when compared to June 2022 when the average price was £7,676 per acre.

Meanwhile the average for ‘all types’ of farmland across Wales attracts an average of £6,633 an acre. This is up by 12.1 per cent compared to the end of June 2022.

Nationally, ‘all types’ of farmland traded at an average of £8,101 an acre in the three months to the end of June – a rise of 10 per cent when compared to the same period last year.

Rhydian Scurlock-Jones, director of the rural department at Savills in Telford, said: “Well-equipped commercial farms and significant acreages of bare arable land are often being bought in competition by buyers with capital gains rollover funds who have a time sensitive window for investment.

“This demand has helped support values and there have been cases where the prices paid are significantly more than the current averages recorded. Driven by buyers looking for environmental solutions and opportunities, values for poorer quality pasture land have also increased.”

During the first six months of this year 85,400 acres of farmland were publicly marketed across Great Britain, 16 per cent more than during the same period of 2022. So far this year there has been approximately 5,570 acres of land publicly marketed in the West Midlands – compared to 7,330 for the whole of 2022.

Between the end of March 2022 and the end of March 2023, publicly marketed farmland in the West Midlands has increased by 51 per cent. Meanwhile, in Wales there has been approximately 8,350 acres of land publicly market to the end of June 2023, compared to a total of 11,382 for the whole of 2022.

Mr Scurlock-Jones added: “One of the primary motivators for current farm sales across Shropshire, Staffordshire and North and Mid Wales is retirement, either where there is no successor or where the next generation does not want to farm. Debt is also creeping in as a reason for a sale – a factor which may become stronger if interest rates continue to rise.

“Farms and estates with a significant proportion of the value allocated to residential assets are also being more affected by rising interest rates in some cases. It is now critical for new launches to have the right marketing strategy, possibly including flexible lotting, as well as realistic guide prices.

"That said, best in class properties in the popular locations are still highly sought after and deals have been agreed within a few weeks of launch at prices in excess of the guide price.”