Bare arable farmland values registered a marginal increase of 0.2% between Q2 and Q3 of 2018, now averaging £8,983 per acre, according to new data from Carter Jonas, the national property consultancy. Average year-on-year land values also recorded an increase of 0.2% from Q3 2017 to Q3 2018, which was broadly a result of consistency in supply and demand ratios.

Despite a steady performance in price for best-in-class land, the market remains extremely localised. Discerning buyers continue to monitor activity closely, waiting for a tactical opportunity before committing to purchase. While good quality, well-equipped farms remain in demand, there is evidence of an increase in the volume of unsold property in localised markets. Often, where the guide price is unmet and the owner unwilling to negotiate, the asset is consequently withdrawn.

Given the pressures exerted on livestock and vegetable farmers following the wet spring and dry summer, there is greater emphasis on the quality of land and its ability to produce against a backdrop of weather extremes.

Andrew Fallows, Head of Rural Agency, Carter Jonas, said: “The ongoing market polarity is symptomatic of buyer mentality over the past quarter. Put simply, when buyers identify ‘good value’, or an opportunity to purchase land that bolsters their estate, they proceed forward. If they regard an asset as overpriced and the landowner is reluctant to negotiate, they withdraw from the sale; we urge those who are keen to sell to navigate this current dynamic sensitively.”

Tax driven purchasers remain within the market either looking to roll over gains from sales or with no time pressure having claimed Entrepeneurs’ Relief.

The outlook for the remainder of 2018 revolves around confidence. With the exception of the East of England, supply is expected to match demand and it is anticipated that prices will remain level for the rest of the year.

Andrew continued: “The summer heatwave and unprecedented weather conditions exerted certain pressures on the farming community, particularly livestock and vegetable farmers. However, the harvest has proved relatively straightforward and yields have been solid, although that has made buyers evermore conscious of the quality of land – and in particular soil – that they are purchasing.

“Looking ahead, we expect the market to continue to polarise between quality units in areas of demand and poorer units in more remote locations. The Agricultural Bill will be watched carefully, and in particular the clauses around emerging Environmental Land Management Scheme (ELMS) and the proposals to de-link payments that may provide a retirement fund.”