Land price rise ‘staggering’ over past decade – RICS
Farmland prices hit yet another record high during the first half of 2013 and are expected to rise further in the next 12 months, according to the RICS rural land market survey.
The latest rise means average values have now more than trebled in less than a decade.
The survey, which involves collating actual farm land values including on-site residences, as well as opinion-based estimates from surveyors for pure bare land, found during the first six months of the year the cost of farmland jumped to £7,440/acre across the UK.
In 2004 land prices were just over £2,400/acre.
RICS said the growth in prices was largely being driven by commercial farmers seeking to expand their operations, although investors were also seeing land as an economic safe haven.
As they were looking to grow an existing business, farmer buyers were favouring large, top-quality neighbouring plots with as small a residential component as possible.
Plots that were smaller and of lower soil quality were attracting much less interest and achieving lower average per acre prices.
Across Great Britain, the survey estimated that bare land prices were highest in the North West (£8,813/acre) while, the cost per acre was lowest in Scotland (£4,438/acre) – although still at a record level.
“The growth in farmland prices in recent times has been nothing short of staggering. In less than 10 years we’ve seen the cost of an acre of farmland grow to such an extent that investors – not just farmers – are entering the market,” said RICS spokesman Sue Steer.
“If the relatively tight supply and high demand continues, we could experience the cost per acre going through the £10,000 barrier in the next two to three years.”