Average cost of farmland in East of England now £8,375 per acre
Demand for residential farmland in the East of England grew in the first six months of the year and nine per cent of respondents expect the price to increase over the next 12 months, according to the latest RICS/RAU Rural Land Market Survey H1 2015.
During the first half of the year, a net balance of 45 per cent of respondents reported an increase in the supply of commercial and residential – with the supply of residential farmland increased at its fastest rate since the data series began in 1999.
Elsewhere, Scotland and the North East of England saw a reduction in demand not just for commercial but also residential farmland, while the results for South West and the East Midlands suggests demand is still edging upwards in these areas.
At a national level, the South East saw the largest price increase over the year, with both arable and pasture land seeing sharp rises.
Ben Taylor, partner at Bidwells Rural Agency in Cambridge, said:
“There has been a notable increase in the supply of arable land on the market and prices at present appear to be sustaining – and in notable areas, showing continued growth.”
Simon Rubinsohn, RICS chief economist, added: “We are seeing a considerable divergence in the outlook for commercial farmland compared to land seeing with a significant residential component.
“Annual average arable land rents fell by seven per cent during H1 and by 9.7 per cent over the year, with anecdotal evidence suggesting the recent falls in commodity prices are the primary cause of this decline.
“Despite this, the lifestyle market remains relatively strong across much of the country with prices of land with a large residential component generally expected to continue moving higher.
“Political uncertainly leading up to the general election is likely to have had some further impact on the results in the survey, however, market conditions look set to remain challenging notwithstanding the outcome with the global economic environment set to remain a drag on commodity prices.”