The average price of bare agricultural land across England and Wales fell by an average of 5% in 2025, though the signs are that the market did flatten in the final quarter.
According to the Knight Frank Farmland Index, which has tracked the value of bare agricultural land since 1944, an acre of farmland is now worth just under £8,700 on average.
This marked the first time since the second quarter of 2017 that values have dropped by more than 5% over 12 months.
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Despite the decline, the reduction was seen as limited when set against subdued grain prices, weaker residential property markets, and reduced confidence in government agricultural policy.
“The market remained fairly stagnant at the end of 2025 in line with the rest of the year,” said Will Matthews, head of farms and estates at Knight Frank.
“While economic and political uncertainty around the world is driving up the price of gold to record highs, farmland seems to have lost some of its traditional safe-haven shine that caused prices to jump during previous periods of financial upheaval.”
Performance
Over the past five years, agricultural land values have risen by 26%, outperforming prime central London residential property, which fell by 5%, and the wider UK housing market, which increased by 19%.
Concerns intensified following Labour’s first Budget in October 2024, which proposed significant reforms to inheritance tax (IHT) affecting agricultural and commercial property.
With smaller farms initially expected to become liable from April 2026, fears grew of forced sales to meet future tax bills.
Mr Matthews said the slowdown reflected “the widely held perception that the current government sees greater taxes on the wealthy as a solution to its fiscal worries”, adding that overseas buyers had become more cautious.
A partial policy reversal before Christmas means only farms valued above £2.5m, or £5m for married couples or civil partners, will now face IHT.
Mr Matthews added: “I do sense, however, that confidence may have hit its nadir.”
Knight Frank expects farmland values to remain relatively stable in 2026.
“There is still plenty of wealth around, and deals are still being done,” Mr Matthews said.
“But vendors need to set guide prices at realistic levels.”