As the residential property market shows signs of stabilising, investors are snapping up farmland, causing prices to soar.
The Royal Institute of Chartered Surveyors has today published figures showing that the average price of farmland for the third quarter of 2004 is edging towrds £10,000 per hectare, with recent price rises rivalling those of the residential sector.
According to the research, farmland prices have risen by 30% over the past year, and by 130% since the early 1990s.
RICS attributes the rise in prices to growing demand, not only from non-farmer buyers looking for an extra source of investment potential, but also from private buyers who are looking to buy neighbouring farmland to protect the expensive residential property they have purchased.
In spite of declining sales over the past quarter following recent interest rate increases, RICS says that surveyors remain confident that, due to strong demand, farmland prices will continue to rise for the next 12 months.
RICS rural spokesperson Sue Steer says: ?More and more people are being turned on by land as an investment vehicle. These are not just downshifting city slickers but also those looking for a viable investment alternative to bricks and mortar or the stock market.?