Land prices have firmed slightly this year, according to the latest figures from the Royal Institution of Chartered Surveyors.

The organisation’s rural land market survey for the first three months of 2006 shows that the average price of farms rose 4% to £9292/ha (£3760/acre).

Bare arable land inched up by almost 2% to £7426/ha (£3005/acre), while pasture rose 4% to £6674/ha (£2700/acre).

Much of the increase was being fuelled by non-farming money, claimed the organisation.

Rural spokesman Julian Sayers said:

“Economic confidence and city bonuses continue to push up residential farmland.”

Land agents questioned by the survey expect residential farms to increase in value further during 2006 but the price of more commercial units is predicted to remain flat.

For the first time RICS is using chartered surveyors’ opinion as the basis for its headline land values.

Economist Milan Khatri said that although the survey had reported a slight increase in the availability of farmland, the market was still too small to provide reliable figures based on actual sales results.

Because of this the survey would also be switching from a quarterly basis to half-yearly, he added.