The average value of UK farmland is almost back to peaks last seen in the fall of 2015, according to new data from the Knight Frank Farmland Index, an international real estate consultancy. In the third quarter of this year, prices for vacant agricultural land increased by 1% to just over £8,300/acre, bringing annual growth to 13%.
Farmland real estate outperformed all other asset classes that we track over the last three months, according to Liam Bailey, global head of research at Knight Frank. It was only just surpassed by gold over a year.
Farmland is regarded as a haven by investors, especially given its potential to act as an inflation hedge at the moment. Buyers who are motivated by taxes and the environment are supporting demand, per Andrew Shirley’s analysis. The government’s growth agenda and proposed planning reforms may also result in a greater need for farmland for infrastructure and new construction.
However, according to Knight Frank, the rate of price growth slowed down in the third quarter and was the lowest since early 2021.