Demand for farmland continues to drive prices up in rural areas, according to the National Farmers’ Union (NFU), a trend it says is set to continue.
Land prices have risen steadily in the last few years, on the back of a reduced supply and strong demand from both farming and residential buyers, it says. ‘In the short to medium term, supply of land is likely to be restricted, while losses of land from agriculture will continue with land taken for development or for mineral extraction or forestry,’ it continues.
These losses are likely to remain at a low level relative to total agricultural area, but can be significant in absolute terms, the report claims. It also says that supply is unlikely to outstrip demand in the foreseeable future: ‘Further land is likely to be lost through the proposed managed retreat in coastal areas. Therefore, unless significant changes in the taxation regime as it affects land, there is no reason to suppose that prices will fall in the near future, and they are expected to continue mirroring their long-term growth path,’ the NFU concludes.