Land values increase steadily

FARMLAND VALUES continue to rise, although growth is slowing, according to the latest quarterly rural land market survey from the Royal Institution of Chartered Surveyors.

On a four-quarter rolling average basis, the price of equipped farms (where less than half of the value is residential) rose 3% during the second quarter of 2004 to £3493/acre.

That compares with £3383/acre in the first quarter of the year.

Values are 16% higher than 12 months ago, although bare-land prices have increased more slowly, rising 13% on the year and 2% on the quarter to £2868/acre.

The continuing rise in prices was down to growing demand and a continued lack of supply, said agents who responded to the survey.

However, the volume of land sold did increase slightly to 5930 acres – up 7% on the quarter, but still 23% below the same period last year.

Demand for commercial farmland rose for the fourth quarter in a row with a net balance of 53% of surveyors reporting an increase, the most optimistic outlook since 1999.

Most surveyors across the country expected availability to remain low and prices for commercial and residential farms to strengthen.