There was a notable increase in farmland available for purchase in the second quarter of 2024, resulting in a more stable market, moving beyond the frenetic activity of the past two years.

With more land available, buyers have regained some leverage, moderating the rate of land value growth, according to property consultancy Carter Jonas.

Improved weather conditions allowed more launches between April and June, bringing over 41,700 acres of new, publicly marketed land to the market.

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Andrew Chandler, head of rural agency at Carter Jonas, notes this is a substantial increase compared to the same period in 2022 (34,900 acres) and in 2023 (32,800 acres).

Including the new launches in the first quarter, the first half of the year saw a 24.9% increase in publicly marketed supply compared to the first half of 2023 (53,163 acres, against 42,578 in 2023).

“The frenetic activity driven by record low levels of supply 18-24 months ago has subsided, leading to a more stable market." he explains.

Although supply in the first half of the year was 38% above the five-year average for the same period, it was 7.6% lower than the 10-year average, indicating it still falls short of historical norms. This has led to strong longer-term land value growth.

Average arable land values in England and Wales remained steady at £9,667/acre, while average pasture values increased by a marginal 0.4% to £7,833/acre.

Since the start of 2024, average arable and pasture values have risen by 0.9% and 1.1%, respectively.

Chandler highlights: “While growth has slowed year-on-year, the trend remains positive.

“Annually, average arable land values have risen by 1.6% and average pasture by 2.0%.

"This compares to 6.4% annual growth for arable land and 4.4% for pasture a year earlier, a period marked by a particularly tight market with very limited supply."

However, far from suggesting a downturn, Carter Jonas believes that the slowing in growth signifies a well-balanced market.

While greater supply is providing more options for buyers and tempering price growth, there is still healthy interest driving activity.

Chandler explains: “Commercial farming businesses, especially those who are largely cash-rich with less need for finance, remain a driving force in the market.

"This is complemented by a growing presence of natural capital buyers and the continued presence of rollover buyers who have utilised Business Asset Rollover Relief and are yet to reinvest in another asset.”

The election has been a keen talking point, but it didn’t disrupt market dynamics. Carter Jonas is hopeful that the industry will see a period of post-election stability after months of political uncertainty.

“Labour has pledged its commitment to making the ELM scheme work and has not stated immediate intentions to change the tax regime. The industry can expect continuity rather than a major change in direction."

He adds: “While some economic concerns remain, positive signs are emerging. Inflation, as measured by CPI, aligned with the Bank of England’s 2% target rate in May, suggesting a more optimistic outlook.

"Although current interest rates remain a factor in business decisions about buying or selling, inflation is forecast to remain close to 2%, paving the way for interest rate cuts in the near future.”