It would be hard to know there is a credit crunch when examining the latest figures for the price of farmland in the UK.
According to a detailed report by COUNTRY LIFE’s property correspondent Penny Churchill in today’s issue and figures just released from agent Knight Frank, farmland prices hit record highs.
Last year, prices for farmland rose by 25.3%, with average farmland values increasing from £3,294 the previous year to £4,316 in 2007, says Knight Frank’s latest research (www.knightfrank.com).
Thirty-seven per cent of purchases were made by lifestyle farmers, just ahead of real farmers (34%) and buyer demand rose by an average of 11% on a year on year basis.
‘It is clear the problems facing the wider property markets have not been felt in the agricultural sector where prices have now risen to an average of £4,129 an acre. Given the turmoil and unsettled nature of the financial markets, this represents an astonishing annual increase of 25.3%, the second highest annual rise on record,’ says Clive Hopkins, head of farms and estates at Knight Frank.
As in previous periods, Mr Hopkins points out the market has been driven by non-agricultural money.
‘When lifestyle purchasers act, they do so decisively. For example, in 2007 we saw two estates of 5,000 acres sell to two individual buyers, which underlines the fact there is private money aimed specifically at the agricultural market,’ he adds.
Looking forward, the agricultural market shows little sign of weakening, believes Knight Frank. With limited supply and strong demand, the agent predicts land prices will increase by 13% over the next year, while rents will rise by around 12.5%.
* Get your latest copy of COUNTRY LIFE, out today, to find out where the hotspots are for British farmland.