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Farmland values grow to a record high

26/10/2007

FarmlandThe growth of farmland values has continued unabated in 2007, reaching record levels. The latest RICS Rural Land Market Survey confirms that farmland values reached the highest levels in the survey’s history.  During 2007 prices have risen by 22.6%, compared to 18.1% in the second half of 2006.  The latest figures from the survey state that arable land has risen by 23% to £3,758/acre while pasture land is worth an extra 22% at £3,402/acre.  This puts the average price of farmland now at £3,581/acre, levels that Fisher German are easily achieving with their land sales. 

Demand for farms is high but there are fewer coming to market. Farm sales have fallen by almost 30% during 2007 and the number of purchases by individual farmers increased to 50% the highest level recorded by the survey.  There are several key factors currently driving the market.  David Powell of Fisher German’s Banbury Office explains that individual farmers are developing an increased confidence in the profitability of the industry, and with high commodity prices, are entering the market as purchasers to expand existing operations.  Farmers also have to compete with lifestyle buyers who see rural property and land as a strong investment, as do a number of commercial and overseas investors.

David Powell also comments “The supply of rural land remains constrained and the amount brought to the market is insufficient to meet purchaser demand”. Prices are set to rise even further with Fisher German expecting to see continued growth over the coming year, for both commercial and residential ‘lifestyle’ farms coming to the market. 

For more information on the rural land market, please contact David Powell at Fisher German’s Banbury Office on 01295 271555 or email david.powell@fishergerman.co.uk.

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