An unexpected increase this year in demand for farmland in the South of England has contributed significantly towards steadily rising land values with the price for grade 3 arable land growing strongly throughout 2021 as a whole. 

A recent research study undertaken by Emily Norton & Andrew Teanby of Savills Rural Research department finds that this growing confidence is being led by land investors. In response to intensified global regulatory accountability for environmental impact, they see farmland as a real asset investment opportunity that is high in environmental, social and corporate governance (ESG) values. The survey shows that during 2021 the average value of grade 3 arable land in the South East rose by 2.1% to £8,800 per acre. 

As property lawyers advising clients in both residential and land acquisitions, we've also saw a growing demand in 2021 for rural farmland. Many of our existing land-owners decided to dispose of supplemental land in a bid to capitalise on this supply and demand matrix. 

It's interesting to consider whether the rise in rural arable / farmland has contributed towards the steady rise in rural property prices, particularly in the South East of England. We are continuing to see the bidding wars, above asking price offers and contract races for the most desirable homes. Markets such as West Oxfordshire and the Cotswolds are under constant supply and demand but local agents are still seeing the lowest amount of new stock on their book for many decades.

According to a December 2021 Financial Times study there were 1,636 agreed sales in the Cotswolds between June and November, a 78% increase on the same period as 2019. We estimate the growth of the rural market will continue at a pace for a considerable time and our team are consistently developing both the number and scope of rural and agricultural transactions.

As Spring beckons, the world continues to do its best to return to some kind of normality, and we finally see the property market spring back to life, it will be really interesting to see if the land and property values stabilise or continue to soar.