Bare arable land values will grow by 1.55% by the end of 2018, despite uncertainty over the future of subsidies prompting a decline in the last year.

Farmland values across England and Wales are expected to stabilise over the next 12 months according to new data from Carter Jonas, the national property consultancy.

This follows muted growth in Q4 2017, in which arable land values registered an average of approximately £8,972 per acre (up on £8,969, in Q3 2017).

Values remain the highest in southern and central England, where demand for arable land is most pronounced. However, current and predicted pressure on farming incomes continues to have an impact on the market as a whole, with buyers remaining cautious.

The northern regions of England, and Wales, saw a flattening of values, reaching an average of £9,000 per acre, and while the Midlands saw an increase in turnover, prices remained constant.

There is a lack of ‘trophy’ farms and estates across England and Wales, due to would-be vendors’ reluctance to put their assets on the market until the economy shows more stable signs of improvement. This has resulted in a stronger demand for the best in class. Conversely, a higher proportion of farms with an Agricultural Holdings Act agreement (AHAs) became available in the last quarter of 2017, but due to the uncertainty surrounding support payments, these are less desirable in the current climate.

Looking ahead to 2018, modest growth is forecast, although buyer sentiment is set to be largely dictated by the confirmation of sector support, with proposals to reduce the largest of these payments after 2019 causing concern. However, the counter-cyclical land market continues to attract long term investors.

Andrew Fallows, head of Carter Jonas, said: "The seasonal land market has yet to show itself, but continues to be polarised. While the lengthening of sector support is welcome, it hasn’t provided enough certainty for those businesses looking to make a long-term decision – which buying and selling farmland certainly is.

“It is interesting to note that when we talk about farming, we talk about subsidies – and yet when we talk about environmental work, it’s all about payments. Perhaps what is needed is a redefinition of terms, in light of the positive, conservational efforts that many farmers undertake.”

Tamara Hooper, RICS policy manager said: “The latest data continues to show the need for clarity from government for the rural community. We have seen demand, prices and rents fall since the EU referendum and now our latest survey results point to less availability of land for would-be buyers. RICS has continuously called for government to support agriculture and horticulture and when 60% of the sales market is driven by farmers it is clear that government need to provide yet more clarity and certainty.

“However, we cannot deny that the nature of rural land-based businesses continues to evolve. With the inevitable restructuring of UK agriculture ahead, there will be a need to support all rural business activities beyond primary agricultural production.”