DURING the past 10 years the overall value of GB farmland has increased by 149% and barring any major economic or fiscal changes, Savills does not anticipate significant price rises or falls in the short to medium term and are forecasting overall average growth of 5.5% for the next five years followed by sustained, steady growth in the longer term.

Dan Rees, Savills head of residential and rural sales in Cardiff, commented: “Over the past few years we have seen a widening in the range of values achieved, which we expect to continue as buyers choose to invest in the best land available.”

The proportion of farmers selling last year was lower than in 2015; contributing factors include the recent softening in average farmland values, uncertainty surrounding Brexit and the short term prospect of an increase in subsidy as a result of the weak pound. Also there was an increased use of borrowings to fund purchases, 30% of buyers compared with 23% in 2015.

While the weak pound, which has reduced on paper the average value of farmland by £1,000 for the overseas investor, has not yet led to purchases in the numbers seen before the global financial crisis, enquiry levels have increased for good quality commercial arable land and more complex blocks of land with long term strategic potential.

In the short term, the downside of Brexit on farmland values is likely to be muted.

Ian Bailey Savills rural research said: “The weak pound creates a favourable buying environment for buyers from overseas as mentioned above and this along with the potential reduced supply driven by uncertainty, will help support farmland values.”

In addition, Savills expects increasing amounts of rollover cash and general economic improvement in the medium term to support demand and therefore prices.

In the event of a significant reduction in farm subsidies in 2020 and therefore average incomes, the negative effect is likely to be greater on rents than farmland values.

Daniel Rees, added: “2016 was an eventful year with the lead up to the referendum and questions following the result. Despite this, we experienced a successful year in farm and farmland agency in South and West Wales. Supply and buyer interest picked up after the referendum and, despite challenging farm commodity prices, we still saw plenty of buyers looking to expand their dairy operations. It is clear that there are plenty of active buyers out there for quality Welsh farms and land."