Non-farmers snap up half of all farmland sold last year

Non-farmers purchased more than half of all farms sold on the open market last year, suggest the latest figures from land agents Strutt & Parker.

Farmers accounted for the lowest level of transactions on record during 2023 – equivalent to only 44% of open market transactions during the year when historically they have tended to be involved in 50-60% of purchases.

Strutt & Parker said the figures confirmed the significance of private and institutional investors in the agricultural land market. This included overseas investors and corporations seeking to secure land for environmental reasons, including carbon sequestration.

Larger farms

Non-farmer buyers – who include a mix of private and institutional investors and lifestyle buyers – accounted for 56% of sales. Because these purchasers also tend to buy larger farms, they bought a larger area of land than farmers too.

Private investors were involved in 28% of transactions, institutional investors in 13% – a rise of 10% on 2022 levels – and lifestyle buyers in 16%.

“The growing role of non-farmers has proved to be a defining feature of the farmland market in recent years,” says Matthew Sudlow, head of Strutt & Parker’s farm agency. “What we have seen over the past 12 months is that farmers have understandably become more cautious.”

Factors included higher interest rates, falling support payments, cost pressures and the impact of some horrendous weather conditions. Meanwhile, investors and lifestyle buyers continued to see farmland as an attractive and safe long-term investment.”

Food production

While non-farmers are more active in the marketplace this does not necessarily mean that the land in question is being taken out of food production. “Many of the farms and estates continue to be productively farmed,” he said.

“Some of their new owners are placing more of a focus on regenerative farming techniques and improving biodiversity. Although there has been lots of media attention about land being bought for tree planting, the acreage involved in England at the moment is still tiny.

Context is everything when it comes to looking at trends, added Mr Sudlow. The total amount of land bought and sold each year typically represented less than 1% of the total agricultural land area, he explained.

“Even if the amount of land being bought by green investors is growing, it still represents a tiny percentage of the total land area. The reality is that most agricultural land continues to be in the hands of farmers despite what looks to be a significant shift in buyer types.”

The Farmland Database records the sale of all farms, estates and blocks of publicly marketed land in England over 100 acres in size. It shows overall that demand was slightly weaker in 2023 with interest becoming more variable in some regions.

Rising prices

This led to a slightly lower percentage of farms and estates selling at or above the guide price. That said, high prices have continued to be paid for best-in-class properties, pushing up average values, added Mr Sudlow.

The average price of arable land in England rose by 4% between 2022 and 2023, with an average price paid of £11,300/acre. Over 70% of the arable land traded in England during 2023 made more than £10,000/acre.

As is usual, there was a much greater variability in pasture prices, because grassland can differ so much in terms of quality, with prices ranging from a low of £4,000/acre to a high of £16,100/acre, with an average of £8,700/acre.

At 75,500 acres, supply on the open market fell slightly in 2023. But it was the second highest total in the past five years. Once off-market sales are factored in then it is estimated that well over 100,000 acres were available, which is the highest acreage for a number of years.