English arable land prices rose by l7.5 per cent last year and now stand at an average of £3,161 an acre, according to new figures from Strutt & parker's Farmland Database. The figures, which include activity for the final quarter of the year, show that the amount of land sold in England last year was 73,200 acres, a 24 per cent increase on the previous year. In all, some 111,185 acres of land were launched on to the market in 2006, four per cent more than entered the market in 2005. The fact that land prices managed to rise by l7.5 per cent, despite this increase in supply, is one of the reasons Strutt & Parker's james Baker is forecasting further price rises this year. He said: 'We are expecting English farmland prices to rise by around 10 per cent in 2007, thanks to confident, well-financed buyers from both inside and outside the farming industry and a slight decline in the amount of land likely to come forward for sale.' The new figures show commercial farmers are now buying as many of the farms that come to the market as the wealthy, so-called 'lifestyle' buyers, with each accounting for 46 per cent of purchases. Mr Baker said: 'In 2006, working farmers returned to the market in some force and, with the agricultural outlook looking reasonably good, we expect them to stay in the market in 2007 alongside the lifestyle buyers who have been active for some time now and whose buying power shows absolutely no sign of being diminished. 'We had one 1,200 acre Hampshire estate that attracted 40 potential buyers, all of whom could easily afford the £5-6 million asking price. 'One was successful, a couple of the under-bidders have bought elsewhere, but the rest are still looking and with more people apparently becoming multi-millionaires every day, this sort of demand can only have a positive effect on prices.' Mr Baker pointed out that the amount of land sold in 2006 was boosted b y a handful of large, one-off sales that are unlikely to be repeated this year. 'We're expecting to see a slight fall in the amount of land coming to the market in 2007, not least because the improved outlook for agriculture means farmers will be keener to hang on to what they've got,' he said. The Scottish market has been even more buoyant than England, roaring back into life after a long period during which an historically-low amount of land was offered for sale, reflecting both uncertainty about CAP reform and a belief among landowners that prices were set to rise. During 2006, 98,719 acres of land was sold, a remarkable 300 per cent increase on 2005. Land quality varies dramatically across Scotland, but average arable land prices have now reached circa £3,000 per acre. Strutt & Parker's Farmland Database monitors all publicly marketed sales of land of more than 100 acres. Of the farms sold by the firm, 46 per cent were bought by farmers, 46 by lifestyle buyers, five per cent by equestrian buyers and three per cent by conservation bodies. Average grassland prices in England were £2,870 an acre (rolling average).
7.5 per cent hike in farm land prices
Friday 19th January 2007 12:00 am