The transaction-based* measure of prices, which includes residential land, stood at just under £17,000 per hectare, while opinion-based**, which covers just bare land, approached £14,500 per hectare. Both prices measures rose by roughly six per cent.
During the last six months of 2010 all areas of Great Britain experienced rising farmland prices with the exception of Scotland, with prices there falling by eight per cent. The East Midlands saw the strongest price rises (17 per cent), followed by the North West (12 per cent). Farmland was most expensive in the North West at £17,300 per hectare, while the cheapest land was in Scotland, priced at £9,100.
Demand continued to strengthen for both types of farmland, but 55 per cent more surveyors reported demand rose rather than fell for commercial farmland, compared to only six per cent for residential. This marks the fourth year running where the pace of demand for commercial outperformed residential. Residential farmland demand remains more subdued, as it broadly reflects the national housing picture.
Land availability has now been falling in both the commercial and residential sectors for two-and-a-half years. Given the lack of supply to the market, surveyors expect the recent trend in farmland prices to continue over the next twelve months; with strong growth in the commercial farmland market but a flatter trend in the residential sector.
Sue Steer, RICS spokesperson said:
"The last six months of 2010 saw further strong gains in farmland prices as commodity prices continued to move upwards. Commercial farmers are increasingly keen to purchase prime farmland to expand their businesses, and this strong demand is keeping the market very active.
"This, combined with lack of supply of good quality land can only lead to even higher prices over the next 12 months. In comparison, the residential farmland market remains relatively subdued, reflecting the broader national housing picture.”
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