Farmland prices have continued to rise over the past year and this has been an ongoing trend since the BREXIT vote in 2016 when uncertainty over the future of UK agriculture last caused a blip. This may seem counter intuitive when input prices such as machinery, energy, agri-chemicals and fertiliser have been rising rapidly. However, it has been estimated by CPRE that almost 40,000 acres have been lost from agriculture since 2010, mainly to development but also to forestry and re-wilding. Meanwhile output prices for cereals, milk and other commodities have risen sharply since the start of the war in Ukraine and whilst they have fallen back a little since, they remain much higher than pre-Covid.
Simultaneously, the number of houses built each year has seen a nosedive through Covid with little subsequent recovery. Successive governments have set yearly targets for 300,000 plus new houses which have never been reached, yet population growth and smaller households have continued to push up housing demand. Many Planning Authorities are now looking to encourage new village and new town projects as they see this as an easier sell to Councillors faced with a wall of nimbyism around market towns and villages in the Shires and most of these are on greenfield farmland sites.
New building development faces additional restrictions later this year as Biodiversity Net Gain targets will require further offsetting. This is a noble and applaudable attempt to reduce the impact of new development and the destruction of habitats, but it will mean more land lost from agriculture to offsetting. The war in Ukraine has focussed attention on energy and whilst some technologies such as offshore wind require little or no farmland, there are many Solar PV projects underway needing thousands of acres.
All of this means less land available to farm and no prospect of demand diminishing. It can only lead to one thing for the price of farmland. I have clients with land being lost to HS2 with money in their pockets, ready to go, who cannot find a suitable replacement as they compete with all these other demands on land.
Mike Taylor FRICS, FAAV, FNAEA is Senior Partner with Barbers Rural Consultancy LLP and can be contacted on 01630 692500 or m.taylor@barbers-rural.co.uk