English farmland prices see 11% rise in 2013

The average price of English farmland rose by 11% to a record £6,882/acre in 2013, according to the latest figures from Knight Frank’s Farmland Index.

Good quality arable land continues to top the market. “Just before Christmas somebody tendered over £9,200/acre for a block of land I am selling in the East Midlands, while in the west of the country a parcel of around 150 acres made £9,000/acre for a five-year £250/acre sale-and-leaseback arrangement,” said James Prewett, the firm’s head of regional farm sales.

Farmers, adjoining landowners and institutional investors were among the bidders for the two blocks.

“It shows the depth of the market for the right land. The fact that a farmer buyer was prepared to accept a sale-and-leaseback arrangement also highlights how keen people are to get their hands on land when it becomes available.”

“It shows the depth of the market for the right land. The fact that a farmer buyer was prepared to accept a sale-and-leaseback arrangement also highlights how keen people are to get their hands on land when it becomes available.”
James Prewett, Knight Frank’s head of regional farm sales

But there were strong regional differences in land prices and demand, said Mr Prewett, who predicted further price growth for larger blocks of arable land, especially those of interest to investors, with prices for land attracting less interest remaining static.

Over the past 10 years, farmland has increased in value by 210%, marginally behind the 223% change in the price of gold and significantly ahead of the 46% rise in the value of the FTSE 100 equities index.

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