Farmland Supply & Value Drops. Is IHT Reform to Blame?

Farmland supply across Great Britain fell by 15% during the first half of 2025 compared to the same period of the past year, while the average land value saw a drop of 1%. The trends varied based on the location and type of farming, with arable land making up a much higher percentage of listings than usual.

Analysis of land market activity reveals that arable farms accounted for 49% of land brought to the market during this period, which was significantly above the 10-year average of 37%. At 41,600 acres brought to market so far this year, it is the highest supply of arable land since 2015.

In contrast, farmland used for dairying has held steady at 4% to 5% of the market, and animal and mixed farms now represent a smaller share of the market than they have in previous years. Such a trend could reflect the underlying market pressures. While livestock prices continue to be good, cereal crop returns have been falling over the last 18 months. Combined with looming cuts in agriculture support payments, quite a few arable farmers may now be rethinking their position and selling.

What’s Causing the Farmland Supply Drop?

The price trends are showing to be more driven by property-specific factors. Quality of land, connectivity and accessibility by road now appear to be given more importance while determining buyers' interest. Well-funded buyers continue to be active in the market, but are becoming pickier, with interest being seen on only those properties that fit certain criteria.

In Scotland, not many transactions have taken place so far this year, but early indications show stable values, especially in areas where business expansion and investment capital are positively supporting the demand.

What Are the Regional Trends?

Supply levels declined most sharply in England and Scotland, each noting decreases of 17% and 14% respectively in comparison to last year. While Wales recorded a small 3% boost in land marketed, much as a result of one large estate sale.

In England, regional activity was different from the nationwide trend. The West Midlands and East Midlands, for example, witnessed above-average levels of properties to the market compared to pre-2017. Of these, specifically in the West Midlands, were the most active Herefordshire, Shropshire, and Staffordshire counties. Despite this upsurge in listings, total acreage marketed across these areas did not surpass last year's.

Conclusion

The average value of property throughout Great Britain declined to £8,200 an acre in Q1 of 2025 from £8,300 at the end of 2024. This small decrease has primarily been due to the falling values across England.

Pre-harvesting because of dry weather conditions reduced concerns regarding yields, with initial indications showing performance could be better than expected. Confidence for the industry may thus improve as a result.

Several policy measures, including upcoming reforms on Inheritance Tax, are on the horizon and may influence the decisions of landowners and broader market attitudes over the next few months.