According to the latest report from the Royal Institution of Chartered Surveyors (RICS) farmland prices reached an all time high during the first half of 2011, as demand outstripped availability.
Chartered surveyors estimate that the average price per acre increased to £6,115 during the first half of the year, reaching all time record levels for the second consecutive period.
Interest from potential buyers of commercial farmland continued to surge ahead, with 50 per cent more respondents reporting increases rather than decreases in demand. Surveyors report this is driven largely by increasing demand from commercial farmers who are looking to expand production on the back of elevated commodity prices.
Alongside rising demand, land availability increased for the first time in three years. 27 per cent more respondents reported rises rather than falls in commercial farmland coming onto the market, while a net balance of seven noted an increase in residential farmland availability. Although positive, these increases were not enough to keep pace with the growing level of demand.
During the first six months of 2011, all areas of Great Britain experienced rising farmland prices, with the exception of the North West and Wales, where prices dipped. However, farmland in theses areas was also the most expensive, with surveyors reporting prices of £6,938 and £6,500 per acre respectively.