Farmland reach record highs

The price of prime pasture and arable land in parts of England has reached a high of £8,000 an acre despite the credit crunch, according to new figures.

A county by county breakdown by property consultants Knight Frank shows that demand from a variety of buyers is high. Its Farmland Market Index shows that the average price is £6,000 an acre but much more in hot spots.

'Demand for all types of land in England is still extremely strong. The limited amount available to buy means the difference in price between top-quality and average soil is relatively small,' said Andrew Shirley, head of rural land research at Knight Frank.

'Despite the credit crunch that is affecting other property sectors, agricultural land is still in demand from a wide variety of buyers. There are a number of funds in the market prepared to pay premium prices for the few parcels of land they are able to buy,' he added.

It is already well known that land values are increasing, but these new and unique county-by-county figures, show where the regional hotspots are and some of the results are quite surprising.

Across the country, prime arable values, driven by increasing food and oil prices, are routinely topping £6,000 an acre, but the highest values are in the south west of England, an area known more for its livestock than crop production. 'These are small, sought-after pockets of excellent land used for high-value crops like early potatoes, which benefit from the mild spring weather in counties like Cornwall,' explained Mr Shirley.

The most expensive grassland is to be found at opposite ends of the country in Cheshire and Berkshire, where the best pasture is making £8,000 an acre. 'Berkshire attracts wealthy lifestyle buyers looking for attractive amenity land, while Cheshire boasts some of the best growing conditions for grass and is prime dairy-farming country,' said Mr Shirley.

The short term prediction is that the trend will continue. 'My feeling is that prices will continue rising but we have already seen the strongest period of growth. However, farmland certainly isn't a bubble waiting to burst and in these uncertain financial times is still likely to appeal to investors looking for a safe home for their funds and farmers wanting to expand their acreages,' he added.

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