The RICS rural land market survey has announced that strong demand for farmland has boosted prices by 6% over the first half of 2010. We have seen this first hand having sold a block of 42 acres outside Whitchurch, Shropshire in June for £8k per acre.
The RICS survey is an 'opinion-based' measure which looks at bare land only and excludes any residential component and shows that prices have risen from £5146/acre to £5476/acre since the start of 2010. However the 'transaction'based' element of the survey (actual sales, including residential property) shows that prices fell over the same period from £6526/acre to £6142/acre, reflecting the slowdown in the wider housing market.
Evidence from rural surveyors suggests that commercial farmers are still keen to expand production on the back of higher prices and demand for non-residential farmland remains strong.
The RICS is predicting that the supply/demand imbalance of farmland will mean that prices should continue to rise over the next 12 months, especially in the commercial farmland sector.