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Farmland prices rise again

Farmland prices are continuing to buck the trend as prices rose by 12% in the first three months of 2008, says the latest report from Knight Frank. The research found that a growing amount of land is also changing hands for much more than the average price, and good arable land is making over £6000 per acre, a figure expected to continue rising into the summer.

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“The key driver of this growth is a growing number of potential buyers fighting for a limited supply of land,’ said Andrew Shirley head of research at Knight Frank. ‘Our research shows that demand for land has grown almost 19% over the past 12 months while supply has flatlined.’

Lifestyle buyers are still very active in the market, with a 29% share, but farmers and agricultural businesses are now the dominant buying group, accounting for almost 60% of purchases. Optimism, particularly in the arable sector, has brought farmers back into the game, and Irish and Scandinavian farmers remain in the market, looking for land than even at current prices is much cheaper than in their own countries.

‘Their presence in the market is an example of the serious amounts of money being invested in agriculture around the world,’ continued Mr Shirley. ‘While this trend continues – and analysts are predicting an extended bull run for soft commodities – UK farmland values should continue to benefit.’

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