When Queen Elizabeth II acceded to the throne in 1952 at the age of 25, the British people were still subject to rationing and farmland values stood at £78 per acre, equivalent to £1,700 per acre in real terms.
Now, 70 years on, the average value in England is £7,800 per acre, but we are facing another tumultuous time as a result of war in Europe.
Wartime farming produced innovations in mechanisation and productivity, as well as medicines that contributed to a dramatic increase in the global population. Land was still frequently traded. In 1950, 675,000 acres were bought and sold. 1952–1958 saw stable vacant possession prices of around £80 per acre, but our self-sufficiency was at its lowest with active free trade allowing a great deal of imports.
During the 1960s values rose steadily to just over £200 per acre and began a 30-year period of steady value growth.
This rapid growth was dampened in 1973/74 when inflation topped 24 per cent, and interest rates reached 12 per cent. The price of wheat rose fourfold during the 1970s from £27 per tonne in 1970 to £105 per tonne in 1980. The UK joined the EU in 1973.
Wheat prices remained above £100 per tonne and average farmland values remained relatively stable. Milk quotas and Environmentally Sensitive Area schemes were introduced during this period.
Average values fell during the early 1990s as interest rates reached 15 per cent but recovered in the mid-1990s, peaking at over £2,400 per acre as profitability increased on the back of high wheat prices.
During this period the property market was buoyant and prime country houses rose at around 10 per cent per annum. Farming fortunes plummeted in the following years as wheat prices fell to below £60 per tonne.
In 2001 the industry was hit by foot and mouth disease and incomes continued on a downward trend. In 2003 non-farmer (lifestyle) buyers peaked at 45 per cent of all buyers and this was the beginning of a weakening relationship between values and productivity as demand became more diverse.
In 2005 CAP Reforms introduced the Single Farm Payment. 2008 saw the credit crunch. The wheat price reached £180 per tonne. The recession caused by the credit crunch continued the trend of rising values as investors turned to farmland as a safe haven. And in 2009 BoE cut interest rates to 0.5 per cent, which was then the lowest level for 135 years.
The Arab Spring in 2010 saw the oil price peak at over $110 per barrel. Gold peaked at over $1,660 per ounce. In 2012 wheat prices were over £200 per tonne.
At 89,000 acres, the amount of land publicly marketed across England during 2012 was the smallest since records began in 1995. Wheat prices fell to below £120 per tonne in 2015 resulting in the first signs of pressure on values for 13 years.
The nation’s decision to leave the EU in 2016 triggered the most significant changes in UK agricultural policy during the course of the Queen’s reign.2020s
Market activity continued to reduce in response to uncertainty as the UK nations developed their future agricultural policies and post-Brexit trading relationships were agreed. England announced an agricultural transition between 2021 and 2027 while Scotland and Wales favored a period of stability before introducing new policies. Farmland supply fell to record lows totaling just 114,000 acres across GB in 2020 and 83,500 acres in England during 2021.
The diversity of buyers in the farmland market increased due to growing appreciation of the role that land can play in helping the UK meet its 2050 net zero greenhouse gas target through emissions reduction and carbon offsetting.
Supply chain impacts of the Covid-19 pandemic and war in Ukraine led to inflation and commodity prices climbing in the UK; ammonium nitrate fertilizer peaked at over £1,000 per tonne and wheat prices passed £300 per tonne.
Looking to the future, head of Savills rural research, Emily Norton, commented: “The years to 2030 promise to be transformational for UK agriculture.
“The shift in policy emphasis to environmental outcomes also signals new money coming into the sector.
“The disruption of the agricultural transition is tempered by the huge enthusiasm of the current and future farmers who see the opportunity that lies ahead.
“We predict land values will rise as competition increases for all of the services that land can provide,” Emily ended.