UK/East Anglia: Farmland values on rise for tenth year in a row - survey

UK farmland values are on course for a tenth consecutive year of rises, according to a survey.

The research, by estate agents Savills, found that during the first half of this year, prices went up by an average of 3.9% for all land types across the UK.

The Farmland Value Survey also revealed an average rise of grade 3 arable land in the eastern counties of 2.4% in the first half of 2012. to take it to �7,000 an acre, compared with an average across Britain of 4.3%.

In the short to medium term, growth, while still significant, is forecast to be less dramatic than that recorded during the past five to 10 years at around 5% a year.

Ipswich-based William Hargreaves of Savills farms and estates team said: “Many farmers have watched their property’s value double or even treble during the past few years and for some this represents a good opportunity to cash in on the strong market and take advantage of the relatively low value of some other investments classes.”

The highest rates of growth during the first half of this year were recorded in the arable sector across the eastern counties of England, where the demand for large blocks of productive land continues. Prime arable land increased by 8% in the East Midlands and 2.9% in East Anglia to average �7,500 per acre and �7,636 per acre respectively.

To the west of England, land value growth was more muted due to the predominance of livestock farms, where often due to the smaller acreage of these farms the residential element of the whole farm value continues to be relatively high.

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In Scotland, the average value of an acre of prime arable land increased by 2.2% during the first half of the year with this entire growth taking place between March and June. Here the best land is achieving over �8,000 per acre with smaller blocks of land achieving more.

On the supply side, in England the number of acres openly marketed between January and July fell by 14% to 58,768 acres compared with the same period of last year whereas in Scotland supply increased by 11% to 25,074 acres. There have been however, a number of private transactions of substantial acreages.

In the East of England, 11,300 acres of farmland were publicly marketed in the first half of this year compared to 10,200 acres in the first half of 2011, Savills said. This compares with a decrease in supply across Britain of -7%. The East of England accounted for 13% of farmland marketed in the first half of 2012.

Farmers continue to be the highest proportion of traders of land at over 50% of buyers and sellers.