Farmland prices trebled in under a decade
NewsTuesday 27 August 2013
During the first half of 2013, farmland prices in the UK hit another record high meaning they have now more than trebled in less than a decade.
According to the latest RICS Rural Land Market Survey, the cost of farmland in the first six months of this year has jumped to £7,440 per acre across the UK. This is a record high for the eighth consecutive period and the cost of land is now more than three times that of the same period in 2004, when an acre cost just over £2,400.
The NFU believes that the growth in prices has been driven by an ongoing surge in demand from farmers and investors alike.
The RICS has claimed that the rising commodity prices are leading the charge to expand agricultural operations and investors are seeing more and more land as an economic safe haven.
Bare farmland is currently in high demand in the UK and the first half of this year saw a slight increase in the amount of this land coming onto the market. there were 14% more chartered surveyors that were reporting rises rather than falls in supply of this land. However, despite this, the sheer pace of growing demand completely outstripped the amount of available land.
The most expensive land prices in Britain were found in the North West, and the lowest cost per acre was in Scotland. Even though Scotland was the cheapest in the country, the prices north of the border still reached record levels.
The RICS believes that the market is still some way away from finding its level. Respondents still expect the prices of farmland to continue to grow over the coming year, with 46% more surveyors predicting further growth.
Sue Steer, RICS spokesperson, said: “The growth in farmland prices in recent times has been nothing short of staggering. In less than ten 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.
“If the relatively tight supply and high demand continues, we could experience the cost per acre going through the ten thousand pound barrier in the next two to three years.”
The Rural Market Survey first recorded data in 1995.
Picture: Thadd Selden