Rewilders drive farmland market

The farmland market ended 2021 in an upbeat mood, according to the latest results from the Knight Frank Farmland Index. An almost 4% rise in the average value of bare land in England and Wales during the final quarter of the year saw prices rise by 10% over the year – the strongest annual rate of growth since 2014 – to almost £7,600/acre.

Over the past 12 months, farmland has also outperformed gold (-2%) and our Prime Central London Residential Index (+1%), highlighting its resilience during periods of economic turbulence and enhancing its reputation as a hedge against inflation.

However, it should be noted that 2021 saw the balance of supply and demand become abnormally skewed. At little more than 64,000 acres, the amount of land advertised publicly, according to the Farmers Weekly Landtracker, was similar to the record low registered in 2020 when the Covid-19 pandemic decimated the market.

Demand, though, remained exceptionally strong throughout the year as buyers with a range of motivations battled for the few good holdings that did reach the market, often setting values significantly higher than our index. The 1,011-acre Roundtown Estate in Hampshire, which has just been sold by Knight Frank, was a good example. Strong interest from farmers, conservation bodies and rollover money saw the guide price of almost £14 million comfortably exceeded.

Buyers looking to farm regeneratively, plant trees to harvest carbon, or even rewild have been particularly strong players. This environmental focus has pushed up prices for land that would have been considered agriculturally less productive just a few years ago. A good example was almost 200 acres of mixed woodland near Bristol that we sold for well over £10,000/acre.

It seems unlikely that we will see a huge surge in the availability of farmland for sale next year, and with demand predicted to remain firm values should continue to climb.

Main image - The Roundtown Estate, Hackwood Park, Hampshire. A 1,011-acre farming sold under competition for over its £13.8m guide price.