East of England farmland prices hit record high
PUBLISHED: 02:00 28 February 2014
Farmland prices in the East of England have hit their highest levels since records began* in the final six months of 2013, according to a survey.
The latest Royal Institution of Chartered Surveyors (RICS)/ Royal Agricultural University (RAU) Rural Land Market Survey, covering the second half of 2013 found that the average cost of farmland rose to £7,625 per acre in the East of England, hitting its highest level since records began.
The cost of land is now 5.1% higher than during the same period in 2012 when an acre cost, on average, £7, 250.
Growth in prices has been driven by the on-going surge in demand from farmers looking to expand their operations, while the amount of land coming up for sale is continuing to lag well behind, says RICS.
However, with the east coast experiencing severe weather in recent weeks, it remains to be seen what impact this will have on the price and saleability of farmland in surrounding areas.
The twice-yearly RICS rural market survey, which was first carreid out in 1995, puts together farmland data from across England, Wales and Scotland and tracks national farmland market prices, demand, availability, yields and expectations broken down to a regional level.
Despite remaining unchanged on the first half of the year, prices in the North West were the highest in Great Britain with the cost of an acre coming in at £8,813. Meanwhile, land north of the border, in Scotland, was the least expensive with an acre costing around £3,750.
Looking ahead, chartered surveyors in the region are predicting that prices will continue to rise over the coming year, given the significant supply-demand imbalance.
However, with floods having swept across the country, markets in the southern regions could well be “significantly affected” in terms of both transactions and prices,” it said.
RICS head of UK policy Jeremy Blackburn said: “Farmland price growth has been enormous in recent years. With commodity prices now having remained strong for some time, many farmers have been looking to expand their businesses and, with so little actually coming up for sale, competition for good land is fierce.
“Although, with floods having devastated large swathes of southern England, what remains to be seen is the impact this has on the market in these areas and further afield. It will not be surprising to see this have a negative effect on transactions. In fact, a lot of the best quality and highest value agricultural land in the UK is located close to rivers and on floodplains so this too could potentially have an impact on food production.”