Farmland prices 'hit record highs'

Farmland prices reached record levels during the second half of last year as farmers sought to capitalise on high commodity prices, according to research.

A land market survey by RICS, the surveyors body, found that the average price for farmland in England and Wales increased by 2pc to £6,783 per acre during the second half of 2012.

Prices have been rising continually since the beginning of 2009 and surveyors attribute the increase to heightened demand and lack of available land.

With prices of commodities such as wheat on the rise, farmers are looking to capitalise and demand for commercial land remains strong. However, farmers are discriminating, said RICS, selecting large, top quality neighbouring plots.

Regionally, the most expensive agricultural land is located in the West Midlands at £7,625 an acre and is least expensive in Scotland, at £3,750 an acre.

Demand for residential land continues to be supported by people regarding farmland as a 'safe haven' during times of economic uncertainty.

"With demand for commercial farmland continuing to grow and the continued lack of land to meet supply, prices look set to climb new highs," said RICS.

"That said, it appears farmers are still being a little selective, with only the very best quality land going for top prices."

Last month, estate agent Knight Frank forecast that English farmland was likely to be in demand this year , with prices predicted to rise 5pc over the year.

Prices rose by almost 3pc in 2012 to £6,214 per acre according to Knight Frank’s Farmland Index, driven by a fall in the supply of good farms for sale, and increased demand from private investors.

Farmland prices have risen by more than 50pc over the past five years, and 200pc over the last decade. Over the past 60 years prices have risen almost 11,500pc from just £54 per acre.


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