The decline in farmland values slowed during 2017, with average values showing a year-on-year fall of 2% compared with an 6% drop between 2015 and 2016, according to analysis by property and land specialists Strutt & Parker.

The company’s Farmland Database shows the average price of arable land in England was £9,300/acre in 2017, slightly below 2016’s average of £9,500/acre.

“Farmland prices proved remarkably resilient in 2017, defying those commentators who predicted sharp falls in the immediate aftermath of the referendum result,” said Strutt & Parker’s head of national estates and farm agency Mark McAndrew.

“While the uncertainty surrounding Brexit has taken some of the heat out of the market, the average value of arable land actually climbed during the last two quarters of 2017.

“However, we continue to see a wide range in prices paid – from a high of £16,500/acre for arable land to a low of £6,000/acre. The amount of land selling for more than £10,000/acre also dropped to less than a third in 2017, compared to nearly 50% three years ago.”

Mr McAndrew said that tighter supplies had helped to support average values. Demand is driving the market with the highest prices being achieved in those areas which attract interest from non-farmers, who are buying for lifestyle, investment and tax reasons.

The strength of local interest can have a dramatic impact on the price paid for very similar properties.

Overall, the average annual price of arable land has fallen by about 8% since the very peak of the market in 2015.

Charlie Evans works for Strutt & Parker in the south west. He said: “We have seen an influx of rollover buyers over the past year who are on the hunt for commercial farms. Sporting estates are also in demand from non-farming buyers. In terms of demand and price, the polarisation continues. Land is typically selling for its guide price, or close to it, or not selling at all. Arable values are currently ranging from about £7,000/acre to £14,000/acre, while grassland is selling for between £5,500/acre to £9,000/acre.”

In the short-term, the company expects the price paid for individual farms to remain highly variable, but average values are likely to remain broadly stable, assuming there are no adverse changes to the tax treatment of land or the UK ends up with a ‘harder’ agricultural Brexit than expected.

Strutt & Parker is forecasting there could be a return to growth in capital values over the medium term due to continued restricted supply and increased demand from rollover buyers.