THE cost of farmland in the UK rose by three per cent in the first half of 2014 to £9,594 an acre, according to the latest RICS/RAU Rural Land Market Survey.
In addition to land prices now being 12 per cent higher than a year ago, farmland now costs more than four times what it did when RICS first began recording rural land market data in 1994 (when land cost £2,028 per acre). Price growth in the last decade has been driven principally by farmers.
A breakdown shows that Wales saw the largest price increase over the last 12 months (19 per cent), where the average price per acre now stands at £8,625 — higher than anywhere else across the rest of the UK — and nearly seven per cent greater than the national average.
Despite some respondents in Scotland reporting sales of bare land in excess of £10,000, the average price of farmland in Scotland now stands at around 44 per cent below the national average at £4,500 per acre.
While interest from potential buyers has now seen substantial rises since the end of 2008, the imbalance between supply and demand appears to show no sign of waning. In the face of growing concerns around housing shortages and burgeoning populations, investors increasingly are seeing land as an economic safe haven. Over the last 12 months 32 per cent more chartered surveyors reported rises, rather than falls, in demand and looking ahead to the next 12 months 44 per cent of respondents expect prices to rise, rather than fall.