Price of UK farmland rocketing upwards

[tliouk]

The price of UK farmland has rocketed due to wealthy town-dwellers 
looking to invest or relocate, says the Royal Institute for Chartered 
Surveyors.

The average price per hectare is now £10,000 compared with £7000 last 
year.

According to the RICS it is due to a shortfall of land coming onto 
the market, along with increasing demand.

But, it says, growing interest rates wil make it harder to borrow for 
such investments (so the underlying cause is the free-credit 
explosion having been dished out by banks over the last few years, 
which has oiled the consumer-led economic growth of recent years 
which has allowed the mass public to "spend it like Beckham", as a 
recent Panorama show recently said. -M)

Source: Ceefax, Friday 12th November 2004

also, The Today programme - Radio-4
Friday 12th November 2004
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Lack of Land for Sale 
30.07.2004

taken from the UK Land Directory
Ref: http://www.uklanddirectory.org.uk/lack-of-land-for-sale.htm
 
A consistent reduction in supply of land coming on to the market 
because of uncertainty about CAP reforms has helped maintain land 
prices in the North, with the overall picture nationally recording 
prices at their highest level ever. 
The latest rural land survey published this week by the RICS (Royal 
Institution of Chartered Surveyors) shows that the price of farmland 
continues to rise as demand outstrips supply. 

Nationally, land prices for the second quarter of 2004 rose by 16pc 
on the same period last year. According to rural property chartered 
surveyors, farmland prices averaged £8,630 per hectare(£3,492 per 
acre) nationally in the 12 months to the second quarter of this year, 
the highest level ever recorded. 

In the North-East and North-West prices for arable and pasture land 
have risen slightly on the first quarter of the year at £2,650 an 
acre for arable land and £2,125 for pasture land. 

Arable land prices are comparable with the same quarter last year 
while pasture land prices are up by 6pc on the same quarter in 2003. 

Much of this can be explained by a lack of certainty amongst farmers 
and landowners regarding the mid-term review of the Common 
Agricultural Policy, covering issues such as the continuing 
entitlement of farm support payments when land changes hands. 

Demand for commercial farmland increased in the quarter of this year 
at the highest pace since the RICS survey began in 1999. Demand for 
land with a house is also increasing, but at a slower pace than 
earlier in the year. 

The split between farmer buyers and non-farmer buyers remains fairly 
equal, as non-farmers continue to play an active role in the farmland 
market. 

They account for 43pc of purchases over the last quarter, unchanged 
from the first quarter of 2004. 

The volume of sales reported in the second quarter of 2004 is 23pc 
down on the same time last year, although up 7pc on the first quarter 
of this year on a seasonally adjusted basis. 

Surveyors remain confident in their outlook for both commercial 
farmland and farmland which includes residential buildings.

RICS rural spokesman and chartered surveyor Julian Sayers said: "Some 
farmers are holding back from putting their property on the market 
until the final implications of the single farm payment regime are 
known. 

"The high demand, which is particularly evident in the West Midlands 
and Wales, is in part driven by relatively poor investment returns in 
other asset classes. There is also the common dream of owning a 
little part of the British countryside."

So far interest rate rises do not seem to be affecting buyer 
activity. 

"As we start to see growing certainty regarding the outcome of the 
CAP mid-term review, farmers will be further encouraged to bring 
their land to the market if they wish to sell."