Contact our offices
5 & 6 BAILEY COURT
COLBURN BUSINESS PARK
Estate Agency Offices are located in
BARNARD CASTLE, BOROUGHBRIDGE & RICHMOND
Residential Management Team
Farmland prices hit yet another record high during the first half of 2013 and have now more than trebled in less than a decade, according to the latest RICS Rural Land Market Survey H1 2013.
During the first six months of the year, the cost of farmland jumped to £7,440 per acre across the UK, hitting a record high for the eighth consecutive period. 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 exponential growth in prices has been driven by the on-going surge in demand from farmers and investors alike. Increased interest from buyers has now seen substantial rises since the end of 2008, and surveyors note that improved commodity prices, a drive to increase production and benefit from economies of scale and the perception that land is an economic safe haven have helped fuel the market.
With bare farmland so sought after, the six months to June saw a slight increase on the amount coming onto the market. 14% more Chartered Surveyors reported rises rather than falls in supply. Despite this, the sheer pace of growing demand outstripped the amount of available land.
Across Great Britain, land prices were highest in the North West while, the cost per acre was lowest in Scotland. That said, prices north of the border still reached record levels.
Ashley Dodgson of GSC Grays advised that “The farm land market continues to be robust with demand generally exceeding supply which is manifested by increasing values, albeit the market is wide-ranging with significant quality and geographic disparities across the North. Whilst nationally the supply of land is higher than in 2012, the quantity of land coming to the market is still below historic levels. Although the 2012 harvest year is best forgotten with low yields, poor quality crops and high variable costs, it continues to have an impact on year end accounts. Good quality commercial arable farms have sold particularly well as exemplified by the sales of Murton Grange, Hawnby, Thirsk and Longlands Farm, Northallerton, which achieved significantly above their respective guide prices. However, we are generally witnessing weaker demand for smaller farms with a significant residential element. Farm land continues to outperform a number of alternative asset classes which combined with good tax breaks helps to enhance its investment appeal.”
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. However, much will depend on farm profitability and interest rates.
Sue Steer, RICS spokesperson, commented:
“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. 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.”
For more information on the services GSC Grays can offer please call tel: 01748 829210 www.gscgrays.co.uk