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Record levels for farmland values

Agricultural rents also exhibited healthy growth reflecting the uplift in land and commodity prices.

Andrew Pearce, head of Rural Agency puts this increase down to a shortage of available land and strong buyer demand. He said: "Commercial farmers are taking advantage of rising food commodity prices whilst investors view the growing population, rising food demand and limited supply of land as a solid long term investment opportunity."

David Hebditch, head of Chesterton Humberts’ Rural Division, said: "Investors are increasingly showing a greater appetite for assets which exhibit good growth potential and are tax efficient.

"Despite the recent adverse weather conditions, there is a compelling long term case for investing in farmland as the attractions of the sector with regard to scarcity value, rising food demand and tax advantages are set to continue for the foreseeable future.

"The increasingly unpredictable global weather conditions will likely exert upwards pressure on food commodity prices as well whilst new  technology will create longer term greater efficiency and cost savings.

"We are quite bullish about medium term growth in farmland values given the likely supply/demand imbalance and have predicted that farmland values will rise by 6% per annum over the next five years, with larger good quality parcels capable of comfortably exceeding this."

Regional variations are apparent. The Eastern region recorded the highest growth in arable land values (+16.2%) and for pasture land  (+13.6%) in 2012 while Wales posted the biggest decline for both.

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