This dramatic jump in demand was met with a sizable downturn in land availability. Surveyors continue to report that the ongoing shortage of available land is a key factor in driving up prices.
With supply so low, perhaps unsurprisingly, transaction levels dipped to their lowest level since the start of 2006. During the first six months of the year surveyors reported that only 115 transactions took place (down from 298 in H2 2011).
Across Great Britain , most areas saw a steady increase in land prices. Surveyors in the West Midlands reported the highest levels during the first six months of the year, while those in Scotland once again reported the lowest.
Looking ahead, with commodity prices continuing to climb, respondents expect the current trend in commercial farmland values to continue. A net balance of 44 percent more surveyors predict prices to rise over the next year, the highest reading since the second half of 2010.
Sue Steer, RICS spokesperson said:
"Farmland prices hit a record high yet again at the start of this year and very few transactions went through across the country. The main reason behind this was that the amount of farmland coming onto the market simply couldn’t keep up with demand from commercial farmers who’re looking to expand.
"With commodity prices now having risen for some time, and the situation looking unlikely to change for the foreseeable future, understandably, chartered surveyors expect price rises to continue their upward trend over the coming twelve months."
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