More farmland is changing hands across East Anglia than for many years as landowners brace themselves for tax rises in the coming Budget, land agents report.

Oliver Holloway of Clarke and Simpson in Framlingham said his firm was handling a number of transactions where buyers and sellers are looking to get deals over the line ahead of new chancellor Rachel Reeves' Autumn Budget on October 30.

With prime minister Keir Starmer warning of a "painful" budget, land deals have shot up as sellers seek to exchange contracts before changes may come into force.

"This is commonplace across the land market nationally," said Mr Holloway.

“With the Labour manifesto promising not to raise income tax, national insurance or VAT, focus has switched to the potential changes and increases of capital taxes.  

"Capital taxes can significantly impact estates, farms and farmland, with inheritance tax often the most influential and as a result of potential changes and planned debt reduction, we have already seen a significant amount of land coming to the market this year."

Other headaches loom for farmers and landowners, he added.

“With a change of government and a publicly declared intent of raising taxes, it is quite possible that Agricultural Property Relief (APR) could also be vulnerable - at least to reform if not outright abolition.

"Such a move should not affect trading farmers, as they would still be eligible for Business Property Relief (BPR), but for investor buyers or landowners with tenanted land, it could have a significant detrimental impact."

But the forthcoming Budget was not the only driver of an uptick in land sales in 2024, he suggested. 

“Higher interest rates, reduced subsidy payments and reducing debts are all factors that have resulted in an increase in the number of land parcels coming to the market, as farming businesses look to restructure," he said.

“Clarke & Simpson have been involved in the sale and purchase of more land across East Anglia than we have for many years and we are handling a number of transactions where buyers and sellers are looking to exchange contracts prior to October 30."

Although growth appeared to slow over the summer months, the region's land market remained "surprisingly robust", he said. But there were greater gaps in land value than he has seen in some time, he added.

“Although some areas of farmland are starting to take longer to sell, others generate significant interest from day one and result in competitive bidding."

Among the sales to do well out of the flurry of interest is Burts Farm, Drinkstone, near Bury St Edmunds, a 421 acres arable farm.

Clarke and Simpson marketed the property earlier this summer with a guide price of £5,545,000 and it sold "very quickly and substantially in excess of the guide price", said Mr Holloway.

William Hargreaves, who leads the rural team at Savills in Suffolk, said greater stability often leads to greater market confidence and historically, they would expect that to outweigh any broader concerns.

“It’s probably inevitable that there will be changes to the levels of taxation – and this may well affect the way some of our clients operate. 

"However I’d also hope the budgetary measures bring more certainty in terms of the wider political and economic picture."

It was important for farmers and landowners to prepare for what might lie ahead, he added.

"Having all their ducks in a row – getting paperwork up to date, making sure partnership structures are known and staff are well looked after – will ensure they can react in the most appropriate way and respond to any challenges as quickly and effectively as possible.”

Graham Ford of Lacy Scott and Knight pointed out that farmers were facing falling incomes with possible implications to tax rules which could lead to substantial changes in UK Agriculture.

"With the Department for Environment, Food and Rural Affairs (DEFRA) set to cut funding by £100m due to the recent need for public finances, farmers are facing a difficult period following the 2024 harvest.

"The current Sustainable Farming Incentive Scheme (SFI) is still in the spotlight to see whether the future of Rural Subsidies is sustainable and supportive to farmers under the new approach."

Good professional advice would be crucial for the sustainability of many rural businesses, he said.