Surge in demand sees East of England farmland prices hit record levels
- Credit: Archant
FARMLAND prices in the East of England have more than trebled in less than a decade.
According to the RICS Rural Land Market Survey, the cost of farmland in the East of England jumped to £7,500 per acre between January and June this year, hitting a record high for the eighth consecutive period.
The growth in prices has been driven by an on-going surge in demand from farmers and investors who see land as an economic safe haven.
Fifty percent more surveyors reported increases rather than decreases in demand in the first six months of 2013.
Supply has remained steady – neither increasing nor decreasing – since the second half of 2012.
Prices are expected to continure to rise rapidly over the coming year.
Adrian Wilson, RICS rural spokesperson and director at Savills in Cambridge said: “Speculation about the role of institutional investors gathered pace last year as headwinds from Europe made the returns on land an inflation-busting investment opportunity.
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“This being said, value very much depends on the size and quality of the plot.
“Interest from industrial farmers seems to be the greatest market influencer. Farmers are keen to make the most of ever-growing commodity prices and are increasingly interested in expanding their outputs.
“Meanwhile, the high values of bare land presents an opportunity for smaller scale farmers who themselves are struggling with the rising cost of food and fuel.
“Only time will tell but at present it appears that commercial agriculture will continue to grow in the region for the foreseeable future.”