East of England: Average price of farmland at new record of £7,500 per acre, says RICS
- Credit: Eastern Daily Press © 2013
Farmland prices in the East of England hit yet another record high during the first half of 2013 and have now more than trebled in less than a decade, according to the latest RICS Rural Land Market Survey.
During the first six months of the year, the cost of farmland in the region jumped to an average of £7,500 per acre, representing a record high for the eighth consecutive period.
The latest figure compares with an average price of around £2,200 an acre during the first half of 2004.
Growth continues to be driven by strong demand both from farmers and investors, supported by increases in commodity prices and a view of land as an economic “safe haven”.
Supply, meanwhile, has remained stable, with virtually no change in the volume of land coming to the market compared with the second half of last year.
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RICS’ findings suggest that the trend of rapidly growing prices will continue over the coming year, with a net balance of 58% more surveyors in the region predicting further growth.
Adrian Wilson, RICS’ regional rural spokesperson and director at Savills in Cambridge, said: “Only time will tell but at present it appears that commercial agriculture will continue to grow in the region for the foreseeable future.
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“Speculation about the role of institutional investors gathered pace last year as headwinds from Europe made the returns on land an inflation-busting investment opportunity. This being said, value very much depends on the size and quality of the plot.
“Interest from industrial farmers seems to be the greatest market influencer. Farmers are keen to make the most of ever-growing commodity prices and are increasingly interested in expanding their outputs. Meanwhile, the high values of bare land presents an opportunity for smaller scale farmers who themselves are struggling with the rising cost of food and fuel.”