Highest farmland values are double the lowest

Michael Fiddes, head of Strutt & Parker's estates and farm agency, said their Farmland Database showed average arable land values at the end of 2016 were £9,500 an acre – four per cent lower than in 2015.

However, he said the average price masked a vast range. "The market is now more polarised than in living memory, with demand extremely location specific."

He cited the south west where a 150-acre block of grade three arable land achieved just under £8,000/acre, while a very similar block four miles away sold for £15,000/acre.

Mr Fiddes said there was still strength in the market. "Just under half of arable land sold in England in 2016 was sold for £10,000/acre or more, which is one of the largest proportions ever. But demand, like prices, is highly variable and almost 40 per cent of the land marketed in 2016 remains available."

The impact of the Brexit vote on the land market was more muted than some had anticipated. A number of sales were renegotiated following the vote but very few fell through.

Brexit caused a slowdown in land coming forward in the first nine months of the year but, a resurgence in the last quarter, meant supply was in line with the five-year average.

Mr Fiddes said the big story in the farmland market continued to be the impact of the squeeze on farm profits as a result of low commodity prices. With around half of all farmland transactions being 'farmer-led', it was not surprising that as farm incomes dropped so did average land prices.

Higher prices are being achieved if there is a good house for residential buyers or if a neighbouring landowner wants to expand and is prepared to pay a premium for neighbouring land.

A number of institutional buyers are also willing to invest in blocks of land with long-term potential for residential development.

Will Parry of Strutt & Parker’s estate and farm agency team in the Northern region said: "Medium-sized arable farms in an appealing location with a good house are selling well, but bare blocks of land in unfashionable areas where there are limited options for development or diversification are proving more difficult.

"Premium properties will still attract top values, but they need to be in the right area and with good communications. Being in the right area can mean being near to a farmer who is looking to expand and wants to secure land close to their existing holding, rather than a specific location."

The following prices are for vacant arable and pasture land in the North of England – excluding the value of houses or building – in the last quarter of 2016.

For arable, the bottom 25 per cent was £6,000 an acre, the average £8,000 and the top 25 per cent £9,700. For pasture, the bottom 25 per cent was £4,300, the average £6,100 and the top 25 per cent was £7,300.