Farmland prices approach record highs

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FARMLAND prices in Yorkshire approached record highs in the last half of 2010, says a recent survey.

The latest RICS Rural Land Market Survey stated in the second half of 2010 prices grew as demand for commercial farmland also increased.

Commenting on the high prices Andrew Fallows, RICS Yorkshire and Humberside rural sector spokesman and partner MRICS at Carter Jonas, York, said: “We are looking at a worsening picture which means that prices may rise further still.

“Looking forward, the continued rise in output prices will mean that demand for arable land will continue to be high in the marketplace.

“However, livestock farmers are still likely to feel the impact from increased feed prices which in turn may lead to a greater supply of upland farmland and limited demand.”

In the second half of 2010 arable farmland increased to £15,753 per hectare, up from £14,518 in the first half, wile pasture farmland stabilised at a high of £11,120.

RICS spokesperson Sue Steer said: “Commercial farmers are increasingly keen to purchase prime farmland to expand their business and this demand is keeping the market very active.

“This 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.”

While demand for commercial farmland increased in Yorkshire and Humberside, demand for residential farmland declined with 25 per cent more surveyors reporting falling not rising demand.

This more subdued picture broadly reflects the national housing market,

Land availability fell for residential farmland, with 25 per cent more surveyors reporting falls rather than rises in supply.

However, 13 per cent more reported commercial farmland supply actually increased, bucking the national trend.

Despite this rise in availability, surveyors expect the recent trend in rising farmland prices to continue over the next 12 months, with strong growth in Yorkshire and Humberside’s commercial farmland market but falls in the residential farmland sector.

Elsewhere in the UK all areas experienced rising farmland prices, with the exception of Scotland, where prices fell by eight 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.