East of England: Farmland prices reach record levels
- Credit: James Bass
Farmland prices in the East of England reached record levels during the second half of 2012, as demand for commercial farmland continued to grow, a survey has found.
The latest Royal Institution of Chartered Surveyors (RICS) Rural Land Market Survey found that the average price per acre for farmland in the region increased to £7,250 during the second half of 2012. Prices have now continually risen since the beginning of 2009, with surveyors attributing the strength of farmland prices to increased demand and lack of available land.
The majority of demand across the country continues to be driven by commercial farmers, keen to expand production to capitalise on high agricultural commodity prices. However, surveyors note that farmers are discriminating in favour of large, top quality neighbouring plots with as small a residential component as possible. As a result, there is considerable price differentiation in farmland, even locally. Plots that are smaller, of lower soil quality or contain a higher residential component are attracting much less interest and achieving lower average per acre prices.
No respondents reported an increase in the supply of commercial farmland, suggesting a downturn in land availability.
Looking ahead, given the current strength of farmland prices and the lack of available land in the region, a net balance of 71% of surveyors expect prices to continue to increase over the next 12 months.
Simon Pott, past president of the RICS and chartered land surveyor, said: “I believe the range of prices between top quality and poorer quality of land is growing, but this is also true of small and large parcels of land.
“Where buyers are looking at land further afield larger plots tend to be more favourable. In my experience, the total amount of land for sale affects its cost significantly.
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“This being said, smaller plots are more affordable for a larger proportion of buyers.”