UK farm land reaches record price per acre for eleven months in a row

Taylor Scott International News

Farm land in the UK continued to outpace supply in the final six months of 2014, with land prices rising by 8.3% over the year, the latest data shows. That took the average price per acre to over £10,067, a record high for 11 months in a row, according to the latest RICS/RAU Rural Land Market Survey. During the same period in 2013 an acre cost, on average, £9,294. Despite anecdotal evidence that the recent fall in commodity prices is starting to temper the pace of demand, particularly for smaller areas of land in all parts of the country, prices are expected to continue to rise over the next 12 months. The increase in demand from lifestyle buyers that began in the second half of 2013 continued throughout the whole of 2014 with this trend being noticed across most parts of the UK. RICS said that this is adding to price pressures and keeping price expectations in positive territory in all areas. Anecdotal evidence also seems to suggest the continued presence in the market of investor purchasers seeing land as a safe haven. Across the UK the supply of commercial farmland has remained flat or decreased in nine of the ten areas, while demand has continued to grow in all but one part of the UK. According to surveyors, average annual arable land rents decreased in the second half of 2014 for the first time in six years but remain 0.8% higher over the year. Pasture lands rents, on the other hand, rose by 3.4% in the first half and by 7.8% over the year to reach £107 per acre. The highest annual price growth in the UK was seen in Scotland, despite uncertainty driven by the referendum and CAP review. Prices in Scotland rose almost 17% over the year, although at just £4,375 per acre, prices in Scotland are still 47% below the national average with the price of pasture land at least 40% cheaper than any other part of the UK. RICS said that it remains to be seen whether the recent announcement on plans to overhaul tenant farming will have any effect on land prices. ‘Although there are a number of potential issues on the horizon which may have an impact on confidence, including land reform and the implementation of CAP review, surveyors remain optimistic that prices across Scotland will continue to rise over the next 12 months,’ said Sarah Speirs, director of RICS Scotland. According to surveyors, average arable land rents in Scotland remained relatively flat in the second half of 2014 at £85 per acre, behind the national average of £158 per acre. ‘Decrease in supply and steady demand has kept prices static. We have seen a very buoyant market for good arable farm land but much slower market for pasture land. There is strong demand for land to rent but very limited supply without grazing licences,’ explained Rod Christie of CKD Galbraith in Elgin. Yorkshire and Humber… Continue reading →

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