Farmland values hit a new high in the first half of 2011, as demand from commercial farmers keen to capitalise on strong commodity prices continued to outstrip supply.
The Royal Institution of Chartered Surveyors’ rural land market survey found average bare land prices increased to £6,115/acre during the first six months of the year, reaching an all-time record for the second consecutive period.
The most expensive farmland was in north-west England, at £6,938/acre, while the cheapest was in Scotland at £3,813/acre. North-east England and the East Midlands recorded the biggest growth, with prices up 14% and 10% respectively, while Wales and the north-west were the only regions to record falls.
The amount of land coming onto the market increased for the first time in three years, although the increase was not enough to match the growing demand, adding further upward pressure to land prices.
“With commodity prices still very high, many commercial farmers appear keener to expand their businesses rather than sell their land,” RICS spokesperson, Sue Steer said. “This can only lead to even higher prices over the next 12 months. In contrast, the residential farmland market remains relatively subdued, reflecting the broader national housing picture.”