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
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
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.”
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
Property Auction Exceeds Expectations