English arable land prices rose by 7.5 per cent in 2006 and now
stand at an average of £3,161 an acre, according to new figures
from National Property Specialists Strutt & Parker’s
The new figures, which include activity for the final quarter
of the year, show that the amount of land sold in England in 2006
was 73,200 acres, a 24 per cent increase on the previous year.
In all, some 111,185 acres of land were launched on to the market
in 2006, 4 per cent more than entered the market in 2005. The fact
that land prices managed to rise by 7.5 per cent, despite this
increase in supply, is one of the reasons Strutt & Parker’s
Mark McAndrew is forecasting further prices rises in 2007.
“We are expecting English farmland prices to rise by around
10 per cent in 2007, thanks to confident, well-financed buyers
from both inside and outside the farming industry and a slight
decline in the amount of land likely to come forward for sale.”
The new figures show commercial farmers are now buying as many
of the farms that come to the market as the wealthy, so-called “lifestyle” buyers,
with each accounting for 46 per cent of purchases.
“In 2006, working farmers returned to the land market in
some force and, with the agricultural outlook looking reasonably
good, we expect them to stay in the market in 2007 alongside the
lifestyle buyers who have been very active for some time now and
whose buying power shows absolutely no sign of being diminished,” explains
“We had one 1,200 acre Hampshire estate that attracted 40
potential buyers, all of whom could easily afford the £5-6
million asking price. One was successful, a couple of the under-bidders
have bought elsewhere but the rest are still looking and with more
people apparently becoming multi-millionaires everyday, this sort
of demand can only have a positive effect on prices.
Mr McAndrew points out that the amount of land sold in 2006 was
boosted by a handful of large one-off sales that are unlikely to
be repeated in 2007.
“We’re expecting to see a slight fall in the amount
of land coming to the market in 2007, not least because the improved
outlook for agriculture means farmers will be keener to hang on
to what they’ve got.
The Scottish market has been even more buoyant than England: roaring
back into life after a long period during which a historically
low amount of land was offered for sale, reflecting both uncertainty
over CAP reform, and a belief amongst landowners that prices were
set to rise.
During 2006 98,719 acres of land was sold, a remarkable 300 per
cent increase on 2005. Land quality varies dramatically across
Scotland but average arable land prices have now reached circa £3,000
With prices having risen by between 15 and 30 per cent during
2006, our Scottish offices are projecting further price increases
as demand will continue to outstrip supply during 2007.
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