50% rise in farmland prices

Friday, 3 August 2007 12:00 AM

Strong demand from buyers looking for property with land as a lifestyle choice has seen the price of farmland rise 50 per cent in the last year, figures out today reveal.

Research from Knight Frank finds non-farming buyers now own 25 per cent more farmland than they did a year ago.

The average price of an acre of farmland reached £3,805 in the three months to June 2007, up from £2,988 for the same period the year before - a rise of 27.3 per cent.

This is the fastest growth rate since 1977, Knight Frank reports.

The estate agent's data shows farmers still own the largest proportion of farmland, at 36.8 per cent, and lifestyle buyers account for 28.8 per cent. Agricultural businesses make up 19.4 per cent of the market, and followed by developers (6.8 per cent) and institutional investors (6.7 per cent).

"Wealth generation in London, and especially in the City, has contributed to significant additional demand and also has underpinned price competition, especially for farmland tied to residential estates to the west of London," explained Knight Frank.

"With residential price growth at the top of the London market hitting 40 per cent and above in some prime locations over the past 12 months, substantial equity is available for bidding up the price of country estates."

The estate agent estimates around 15 per cent of farmland buyers are international, with those from Ireland accounting for 7.3 per cent, followed by the Danes (2.9 per cent) and Russians (1.6 per cent).

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