Land prices in UK to see growth
BRITISH land prices are expected to increase by 3-5pc in this and coming years, according to a leading estate agent in the country.
The latest average price for prime arable land grew by 5pc growth to £5,400/ac (€6,060/ac) in the third quarter of last year, according to Savills auctioneers.
The average increase for land prices was 3pc in the third quarter.
Prices were expected to stabilise during the final quarter of last year, giving an annual growth of around 4pc for the entire year.
It appears the farmland market in Britain is regaining the ground it lost in the second half of 2008.
Comparing agricultural land to gold and oil, the auctioneering firm found that farmland values, like the price of gold, stabilised around their peak and did not record the significant falls that residential and commercial property and equities experienced over the past two years.
Significant
In England, average growth of 3.3pc was recorded across all regions with the strongest growth, a significant 6.4pc, recorded in the south east of England, where average values exceeded £5,100/ac (€5,724/ac).
In Scotland, for the third successive quarter, average farmland values for all sectors except prime arable land remained unchanged. Average prime arable land values increased by 4.4pc during the third quarter of 2009 to just over £5,100/ac (€5,724/ac).
However, the amount of farmland being sold in the UK has fallen dramatically, with a drop of 21pc recorded in the first nine months of last year, compared to the same period in 2008.
Some 131,500ac of land were marketed in the first nine months of last year, compared to 167,000ac in the same period of 2008.
Land supply in Scotland fell by 25pc compared to 2009, while land supply in England fell by 20pc.
The south east of England was the only region where supply increased; up 3pc to just over 17,000ac. This accounted for more than 18pc of the total land supply in England.
According to the Savills report, farmland values have now resumed an upward trend, following a small decline in the winter of 2008. However, the rate of upward movement is significantly slower than that recorded in 2007 and early 2008.
UK farmland, along with gold, continues to be viewed as a good, long-term investment and a hedge against inflation, according to Savills.
- Caitriona Murphy
Irish Independent
