Agricultural land market - Savills research

Savills are one of the UKs premier Land Agents and as such have a team of property and research professionals dedicated to understanding land markets so that they can inform property investors.

They have a strong market insight, provided by the Savills network, in conjunction with a significant external consultancy business which enables them to provide property analysis, commentary and forecasting.

Most of this land research information is available free of charge and can be found at I recommend that you have a look.

Savills research produce regular briefings into the Agricultural market - I have summarised their Spring 2006 report below:

Farmland values

Our Farmland Value Survey shows that the average value for all types of farmland across Great Britain increased by 12.3% during 2005. In 2004 average values increased by almost 16% giving a total rise of 28% during the past two years.


In England, the average value for all types of farmland rose by 10% during 2005, which combined with the 13.4% rise recorded in 2004 represents an aggregate increase of over 23% for the two years.

Investment is a significant driver of farmland purchases and our research shows that the farmland buying activity of the corporate and institutional sector in 2005, at 12% of all buyers, was almost double that recorded in 2004.

Outlook for 2006

We expect the farmland market to be more active during 2006 and beyond.

The amount of product is finite, around 75,000 acres are lost from agriculture each year in England to uses including urbanisation, forestry and leisure. Over 50 years in England, the market has shrunk from around 675,000 acres in 1950 to around 200,000 acres in 2000, a reduction of 70%.

We expect demand from lifestyle buyers and investment buyers, including those from overseas, to remain strong into 2006.

There are strong reasons to own farmland; these include:

  • Lifestyle - ownership provides somewhere to live and fulfils an aspiration; 'to own a piece of England'.
  • Investment performance - driven by capital growth of farmland and residential property. Quality, location and timing of purchase are important.
  • Taxation advantages - land ownership potentially includes Inheritance Tax and Capital Gains Tax relief.
  • Income - reasonably secure, steady income for next five to six years from the SPS with the latest environmental iniatives offering the opportunity for additional income.
  • Development potential - especially where land borders settlements.
  • Capital availability - assets, such as minerals, residential properties, off-lying land, can be used to release capital.

The Sunday Times, Sep 18 2005

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