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‘Staggering growth’ In Farmland Prices
Fri 23 Aug 2013 The cost of Welsh farmland rose to £7,250 per acre in the first six months of this year Credit: Frank May/PA The cost of Welsh farmland rose to £7,250 per acre across the country in the first six months of 2013, says the Royal Institution of Chartered Surveyors (RICS). The latest RICS Rural Land Market Survey found that the growth was driven by the ongoing surge in demand from both farmers and investors. Ben Collins, RICS Wales director, said: “The growth in farmland prices in recent times has been nothing short of staggering. In less than 10 years we’ve seen the cost of a square acre of farmland grown to such an extent that investors – not just farmers – are entering the market. “And, if commodity prices continue to increase and keep demand high, we could see this trend continuing, with cost per acre going through the £10,000 barrier within the next two to three years.” David Powell, of Powells, Monmouth, said: “There is continued demand for good, well located blocks of good land close to farming base of purchasers. Good grazing/mowing land and arable land selling well and at premium values where local demand is strong.” Continue reading
The Value Of Farmland Reaches A Record High
The price of farmland in the region has soared to record levels and is expected to tip £10,000 for an acre in the next two or three years, market experts say. During the first six months of the year, the cost of farmland in Yorkshire and Humber jumped to £7,000 per acre, bringing the value to almost three times what it was during the same period in 2004, when an acre in the region cost just over £2,613. The exponential growth in prices, revealed by the twice yearly RICS Rural Market Survey, has been driven by the ongoing surge in demand for land from both farmers and investors. Sue Steer, RICS rural spokeswoman, added: “The growth of farmland prices across Yorkshire and Humber in recent times has been nothing short of staggering. In less than ten years we’ve seen the cost of a square acre of farmland grow to such an extent that investors – not just farmers – are entering the market. And, if commodity prices continue to increase and keep demand high, there’s no reason at all why we won’t see the cost per acre going through the ten thousand pound barrier in the next two to three years.” Interest from potential buyers started to steadily grow at the beginning of 2006, RICS say, with hikes in commodity prices leading a charge to expand agricultural operations and, as a result, investors are increasingly seeing land as an economic safe haven. With bare farmland so sought after, the six months to June saw availability of such farmland remain flat. Across Great Britain, land prices were highest in the North West at £8,813 per acre, while the cost per acre was lowest in Scotland at £4,438 per acre. Tom Whitehead, senior associate at property agents Carter Jonas in Harrogate, said: “The regional market has surged into activity since mid-May with a good mix of bare land and equipped farms of varying calibre now available. Reasonable quality bare arable land in blocks of 50 to 150 acres is highly sought after commanding a 20 per cent to 50 per cent premium over ‘average’ prices, with weaker demand for farms with a strong residential element or in less fashionable districts.” Respondents to the professional body’s survey in Yorkshire and Humber expect the trend of rapidly growing farmland prices to continue over the coming year with a net balance of 67 per cent more chartered surveyors predicting further growth. Barney Kay, regional director of the National Farmers’ Union, said big investment funds listed on the stock exchange had invested capital in farmland since 2008 as a result of the economic crash. He said: “For many in the industry, high land prices provide a stronger basis against which to invest in infrastructure and machinery but for those younger people entering the industry and looking to expand it makes it a lot harder to buy land.” Chance to reduce arrears? Farmers who are struggling after inclement weather last summer and earlier this year could use high farmland prices to boost their finances, says Andrew Black, rural expert at Savills in York. Mr Black says: “While large farm businesses may have the reserves or borrowings to cope, smaller enterprises may struggle. Sale and leaseback could be a very sensible option to consider. Investors need someone to farm their asset, so farmers can generate capital by selling and continue with a livelihood that they love.” Continue reading
Scottish Farmland Prices At Record High, Surveyors Report
23 August 2013 Scottish farmland prices at record high, surveyors report Surveyors say the average price of farmland has trebled within a decade The price of farmland in Scotland hit a record high in the first half of 2013, according to research by surveyors. The Land Market Survey by the Royal Institution of Chartered Surveyors (RICS) indicated land values had trebled in less than a decade. It calculated the average price of land in Scotland was now £4,438 per acre. Surveyors reported the price was being supported by demand from farmers and investors. Their report predicted further price increases were likely, with the market “far from finding its level”. Mark Mitchell, of Bell Ingram in Perth, said: “The Scottish farmland market has remained strong, despite the poor harvest of 2012 and late spring of 2013. “Quality farms in good locations will still sell quickly and well, bare land is still the most desirable commodity.” The survey also reported a slight increase in land being put on the market. RICS Scotland director Sarah Speirs said: “The growth in farmland prices in recent times has been nothing short of staggering.” She added that in less than 10 years the cost of farmland had grown to such an extent that investors, as well as farmers, were entering the market. “And, if commodity prices continue to increase and keep demand high, we may well see further increases,” she said. Continue reading
