Farmland flying high
According to the most recent Land Market Survey by the Royal Institue of Chartered Surveyors, farmland prices reached an all time high in the first half of 2011 with an estimated average price of a shade over £6,000 per acre.
Demand is far outsripping supply – 50% of respondents to the survey reported increases in demand largely driven by commercial farmers looking to expand their production because of high commodity prices. Land availability increased for the first time in three years, although these increases were not enough to keep pace with the growing level of demand.
All areas of the UK experienced rising farmland prices, with the exception of the North West and Wales, where prices dropped a little, though farmland in these areas was also the most expensive, with prices of almost £7,000 an acre in the North West and £6,500 per acre in Wales.
Given that demand outsrips supply, it is expected that the rising trend will continue into 2012 with the strongest growth being in the commercial farmland market, as opposed to the residential sector where there is also keen demand for amenity land.
This evidence is supported by our own enquiries from prospective buyers; enquiries for mortgages for land and loans for land have increased and the asking prices for land are also increasing. We are seeing increases in enquiries across the whole of our range which includes farm mortgages, farm finance, farm loans through to equestrian finance. On top of this, many of our enquiries are from potental buyers for small amounts of land where the property has an agricultural tie. Demand for farms, farmland and rural property is set to increase and the prices are likely to reflect this increased demand.