Land Prices April 18, 2013 12:00 am The latest Rural Land Market Survey shows farmland values continue to rise to record levels. The Survey, conducted by the Royal Institution of Chartered Surveyors (RICS) and the Royal Agricultural College (RAC) reveals the ‘transaction’ based measure of farmland prices increased by just over 2% in the second half of 2012 compared to the first six months to £8,520 per acre (£21,053 per Ha). The overall opinion based measure increased by 2.3% to £6,783 per acre (£16,761 per Ha) over the same period. But whereas the opinion based arable land price increased from £7,249 per acre (£17,912 per Ha) in the first half of 2012 to £7,592 per acre (£18,760 per Ha) in the second half, pasture land prices actually fell marginally from £6,008 per acre (£14,846 per Ha) to £5,974 per acre (£14,762 per Ha) over the same time period. This is probably values readjusting back to more realistic prices after they rose on the back of increasing livestock prices; with the rise in feed costs, demand for pastureland has tailed off. Analysing the regions there are a few variations. Land in the West Midlands remains the most expensive; Scotland has the cheapest. Opinion based transactions for both arable and pastureland actually fell in Wales by 1.75% and 5.2% to £7,000 per acre (£17,297 per Ha) and £5,750 per acre (£14,208 per Ha) respectively The opinion based measure is a hypothetical estimate by surveyors on the value of bare land. The transaction based price is based on actual sales and can include a residential component where this value is estimated to be less than 50%. Therefore the transaction measure tends to be higher. According to the survey, demand has mainly been from commercial buyers keen to expand on the back of strong commodity prices but it also notes that they are being quite particular. Large, neighbouring plots with good soil quality and a low residential element are commanding much higher prices than those with a large residential element or with poor quality soil which are achieving lower than average prices. Looking forward, surveyors expect the demand from commercial buyers to continue to push prices upwards over the next year.
