During the first six months of the year the cost of farm land jumped to £7,440 per acre across the UK, according to the latest Rural Land Market Survey from the Royal Institute of Chartered Surveyors.
The cost of land is now more than three times that of the same period in 2004 when an acre cost just over £2,400.
The report says that this exponential growth in prices has been driven by the on going surge in demand from farmers and investors alike. Interest from potential buyers has now seen substantial rises since the end of 2008, and surveyors note that hikes in commodity prices are leading the charge to expand agricultural operations and investors increasingly are seeing land as an economic safe haven.
With bare farmland so sought after, the six months to June saw a slight increase on the amount coming onto the market. Some 14% more chartered surveyors reported rises rather than falls in supply. Despite this, the sheer pace of growing demand outstripped the amount available land.
Across Great Britain, land prices were highest in the North West while, the cost per acre was lowest in Scotland. That said, although prices north of the border did still reach record levels for the nation’s market.
Looking ahead, it seems that the market is far from finding its level. Respondents expect the trend of rapidly growing prices to continue over the coming year with a net balance of 46% more surveyors predicting further growth.
‘The growth in farmland prices in recent times has been nothing short of staggering. In less than ten years we’ve seen the cost of an acre of farmland grow to such an extent that investors, not just farmers, are entering the market,’ said Sue Steer, RICS spokesperson.
‘If the relatively tight supply and high demand continues, we could experience the cost per acre going through the ten thousand pound barrier in the next two to three years,’ she added.
