Farmland price growth trebles to record levels
23/02/07

The rate of growth of farmland prices has trebled, reaching the highest levels in the survey’s history, reports the RICS rural land market survey published today (23 February).

The farmland market strengthened rapidly in the second half of the year, with prices rising by 18 percent compared to 6 percent in the first half of the year. Competition between City fuelled ‘life-style’ buyers and farmers, keen to expand production and exploit higher commodity prices, has resulted in demand rising at the fastest pace in the survey’s history. Demand is far exceeding supply of available land.  

However, rising demand is not only being fuelled by domestic farmers. Chartered Surveyors report that foreign farmers – particularly those from Denmark and Ireland – are seeking to purchase land due to the high price levels in their homeland markets.

The weighted average price of farm land rose to £8,164 per hectare, up from £7,219 in H1 2006. The level of sales in 2006 finished at the highest level recorded in four years, with activity 50 percent higher than in 2004, and surveyor’s confidence, for both commercial and residential farmland prices rose to the record levels.

Commenting RICS spokesperson Sue Steer said: “High commodity prices have resulted in a huge increase in demand as farmers compete with non- farming money for land. However, availability of land has slipped back as strong commodity prices has led to a sense of renewed optimism in agriculture and reduced the financial pressure on farmers to sell, despite rising interest rates.  

“City slickers are still attempting to take advantage of low farmland prices with large bonuses encouraging ever popular City lifestyle trends. The UK continues to attract investment from Denmark and Ireland as foreign buyers enjoy the luxury of low prices compared to home markets.”

About RICS

RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 130,000 members globally and represents, regulates and promotes the work of property professionals throughout 121 countries. RICS is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury).

Farmland prices soar to highest levels
RICS UK housing market survey, June 2006
Farm Property Auction Exceeds Expectations