National property consultancy Carter Jonas says the agricultural land market has had another positive year and does not expect it to falter in 2024.

All types of agricultural land gained value in 2023, even in the face of high inflation and rising borrowing costs which have put downward pressure on many other property sectors.

This illustrates the market's relative resilience to economic fluctuations. However, Head of Farm Agency, Andrew Chandler, said the market has not been completely unaffected.

"We have seen an uptick in debt-driven launches bringing more supply to the market in recent months, and growth in capital values has slowed," Andrew said. "Yet, the prominence of cash buyers means that land values are less exposed to increasingly expensive debt than other property markets.

"Significantly, many landowners have sold land for development purposes over the past couple of years and need to 'rollover' the funds within a three-year timeframe to defer Capital Gains Tax. As a result of supply levels being historically low, many of these sellers have not yet found a new asset, resulting in a pool of 'waiting cash'.

"Furthermore, evolving natural capital markets are bringing an increasing array of purchasers to the market. With the introduction of mandatory Biodiversity Net Gain expected in January 2024, the number of natural capital buyers will accelerate. It will also offer opportunities for landowners who wish to diversify their income streams."

The agricultural sector will be paying close attention to the pledges made by political parties in the lead-up to the election.

Over the past year, Carter Jonas has been monitoring responses to changing support payments and concerns about food security, and this scrutiny is likely to intensify in the coming year. There has also been speculation surrounding the political parties looking to axe agricultural property relief for inheritance tax, although this change is now looking less likely.

"For agricultural land, we expect only a modest slowdown in the rate of growth in 2024 compared with 2023," Andrew added. "Pasture land values will benefit from natural capital gains, while arable supply may shrink as farmers assess profitability and take land out of production, exerting upward pressure on values."