The price of farmland in the UK has hit record levels during the first six months of 2013. Prices have more than trebled in little under a decade, according to data contained in the RICS Rural Land Market Survey HI 2013.
During the first six months of the year, the cost of one acre of farmland rose to £7,440 the survey reveals. Prices have now risen for the eighth consecutive period and the price of land is now three times higher than it was in the same period in 2004. At that time, one acre cost would have cost just over £2,400.
The big jump in prices has been driven by the ongoing growth in demand from farmers and investors. Interest from potential buyers has increased significantly since the end of 2008, and investors are indicating they are seeing land as an economic safe haven in the current market.
With bare farmland highly in demand, the first six months of the year saw a slight increase in the amount of supply coming onto the market. Fourteen per cent more chartered surveyors reported rises in supply during the period. The demand has far outpaced the amount of available land.
Land prices hit the highest levels in the North West, while the reported cost per acre was lowest in Scotland. Prices across the border still hit record levels for the national market.
Looking to the future, it appears that the market still has room to grow. Respondents to the survey expect the trend of rapidly increasing prices to continue over the next year with a net balance of 46 per cent more surveyors predicting further growth.
Sue Steer, a RICS spokesperson, said that the growth in farmland prices has been “nothing short of staggering.” If the high demand and tight supply continues, Ms. Steer predicts that the cost per acre could exceed the ten thousand pound mark within the next two or three years.
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