Farmland values in Yorkshire and the north of England are expected to keep steadily rising, according to Savills.

The rural estate agency says a diversity of buyers means farmland remains in comparative scarce supply, though there will be local variations.

The forecasts come after a positive year for the farmland market across the region with all types of farmland selling for an average £7,212 an acre, up 6% on the December 2021 average of £6,802.

Prime arable land is now worth an average £10,787 an acre (up 4.9% over the year) and is the highest anywhere in the country.

Savills reports some 25,200 acres of farmland wase publicly marketed across the north of England last year up 15% on 2021). Great Britain as a whole saw 128,000 acres marketed (up 5%). The north of England accounted for 27% of farmland marketed in England during 2022.

Andrew Black, who leads the rural agency team for Savills in the North of England and is based in the firm’s York office, said: “There are currently compelling arguments for selling, buying and holding land, and the right decision is personal in each case, but it is worthwhile farmers reflecting on these in relation to their objectives and longer term plans. The average value of farmland is at an all-time high and for those that do choose to sell, the decision could prove rewarding.

“Consequently we do expect more farmland to come to market this year – whether it be investors looking to cash out and release capital, farmers struggling with debt due to increased input costs or those enticed to leave the industry by the Lump Sum Exit Scheme. However, even then, it’s unlikely demand will be satisfied.:

Mr Black added: “Competition for high-quality commercial farmland remains strong, while environmental motivations continue to provide a buzz, with tree planting, biodiversity net gain (BNG), natural capital, carbon sequestration markets and regenerative farming all resulting in increased interest from investors who want land with potential to secure income from nature-based solutions. Rollover buyers will also continue to be a major force, with demand from lifestyle buyers perhaps cooling slightly in line with the housing market.

“Alongside this we expect the taxation benefits and long-term outperformance of inflation to remain significant factors in farmland’s appeal. The current gulf between supply and demand is likely to temper any negative impact of the rise in interest rates, with the pent up demand insulating farmland values from the impact of the economic downturn.”

Significant deals agreed by Savills throughout the North include the sale of the 4,000 acre Goole Estate, which had a guide price of £44m; 200 acres of prime arable land in Naburn, which had a guide price of £2.2m; and 583 acres of farmland in Northumberland, which was under offer at £5.85m.