Location is now the most important factor determining land prices, resulting in the widest-ever range in grade 3 arable land values, according to Andrew Pearce, head of rural agency at Chesterton Humberts.
The value of grade 3 arable land in the UK rose on average by 6% during the first half of 2011, he said. But, while a small block with no neighbour interest might fetch £5,000/acre, a big area surrounded by commercial farmers keen to expand could be worth up to £12,000/acre.
Farmers accounted for more than 60% of all acquisitions, with interest stoked by low interest rates and an increase in commodity prices, said Mr Pearce.
Strutt & Parker’s Farmland Database suggests farmers accounted for 63% and 65% of sales in Q1 and Q2 2011, up 4% on the same periods last year. Private investors accounted for 10% and 14% of sales respectively.
Average arable land values across Britain hit £6,837/acre over the first six months, with pasture at £5,629/acre, according to the firm’s statistics.
Smiths Gore figures show bare land values in England rose 6% in the first half of 2011 to £5,700/acre, while the area for sale dipped 9% over the past year to 6,800 acres.
Equipped farm values increased 8% to average £9,000/acre; the area for sale rose by the same amount to 48,900 acres.