Shortage of supply and strong demand from new ?lifestyle? buyers is pushing up the price of farmland, according to chartered surveyors Fisher German.

In recent years, the lifestyle buyer has become so prominent that they are now largely dictating terms in the UK farms market, making it impossible for the ?true? farmer to compete.

David Merton, partner at Fisher German, has seen hardly any purchases from ?true? farmers over the past year, and where bids have been made, based on the likely return through farming, the price has been well short of the competing lifestyle buyer.

?People are now realising the true value of the farmhouse with land around it as a main residence ? and this has been much undervalued in years gone by,? said Mr Merton.

Owning farmland can bring financial benefits according to Fisher German: ?Many are now seriously concerned by Inheritance Tax thresholds and agricultural land, if utilised correctly, provides Agricultural Property Relief. There is also the opportunity to offset borrowings very efficiently and tax effectively against the commercial part of a property portfolio,? said Mr Merton.

However, Mr Merton believes there is room for all buyers in the market: ?With the various grants available for improvement works to farms and conservation habitats, there are ideal opportunities for both the purchaser and farmer to work together to everyone?s mutual benefit,? he said.