Putting a value on Great Britain’s Farmland and Woodland

07 February 2017

For the first time our research team has put a value on all of Great Britain’s farmland and woodland. Taking into account land grades and use as well as including a discount to vacant possession value for tenanted farmland the 39.8 million acres are currently worth £185.7 billion. This research forms part of our latest GB Agricultural Land Market Survey, which provides analysis covering farmland values, who’s buying and selling, investment opportunities and an outlook for the next five years.

Farmland value performance

During the past 10 years the overall value of GB farmland has increased by 149% and barring any  major economic or fiscal changes, we do not anticipate significant price rises or falls in the short to medium term and are forecasting overall average growth of 5.5% for the next five years followed by sustained, steady growth in the longer term.

Alex Lawson Savills Director Farms and Estates comments, “Over the past few years we have seen a widening in the range of values achieved, which we expect to continue as buyers choose to invest in the best land available.”

Buyers and sellers

The proportion of farmers selling last year was lower than in 2015; contributing factors include the recent softening in average farmland values, uncertainty surrounding Brexit and the short term prospect of an increase in subsidy as a result of the weak pound. Also there was an increased use of borrowings to fund purchases, 30% of buyers compared with 23% in 2015.

While the weak pound, which has reduced on paper the average value of farmland by £1000 for the overseas investor has not yet led to purchases in the numbers seen before the Global Financial Crisis of 20%, enquiry levels have increased for good quality commercial arable land and more complex blocks of land with long term strategic potential.

Brexit effect

In the short term, the downside of Brexit on farmland values is likely to be muted.

Ian Bailey Savills rural research says, “The weak pound creates a favourable buying environment for buyers from overseas as mentioned above and this along with the potential reduced supply driven by uncertainty, will help support farmland values.” In addition, we expect increasing amounts of rollover cash and general economic improvement in the medium term to support demand and therefore prices.

In the event of a significant reduction in farm subsidies in 2020 and therefore average incomes, the negative effect is likely to be greater on rents than farmland values.

 
 

General Enquiries

Savills Margaret Street

 

Key Contacts

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099

 

Alex Lawson

Alex Lawson

Director
National Farms and Estates

Savills Margaret Street

+44 (0) 20 7409 8882