Land News

Farmland price soars as investors explore new fields

The Telegraph , 12th November, 2004

The price of farmland has risen by nearly a third in the past year as a new breed of non-farming buyers look to fields as an alternative to bricks and mortar or the stock market, a survey said yesterday.

Overall, the cost of a piece of countryside has gone up by up to 30 per cent this year and by 130 per cent since the early 1990s, according to the survey by the Royal Institution of Chartered Surveyors.

The average price of farmland rose to £9,702 a hectare (£3,926 an acre) in the third quarter of the year, from £8,226 per hectare (£3,490 an acre) in the second quarter with the scale of the rise rivalling that of the domestic housing market.

The price inches ever closer to the £10,000 per hectare (£4,000 an acre) barrier.

The RICS said that the most likely reason for the increase was that non-farmers were buying neighbouring farmland to protect the expensive residential properties they had purchased from future development. Another likely reason was people seeking relief from inheritance tax.

A factor driving prices was that the availability of land had almost dried up, with only 2,200 acres changing hands in the third quarter, although demand was strong.

Confusion surrounding changes in the Common Agricultural Policy that start on Jan 1 was blamed for farmers not wanting to put their land on the market.

The proportion of sales to farmers fell to under 38 per cent of the market, after a poor harvest.

Despite the sale of farmland declining over the third quarter of the year and an increase in interest rates, surveyors still expect farmland prices to continue to rise for the next 12 months.

Sue Steer, who runs an estate agency at Holmes Chapel, near Macclesfield, Cheshire, has acted for non-farming people buying farmland - and numbered herself among them.

Her patch is the footballer country of Manchester commuter-land, close to thriving private schools. She says that most of her farmland business comes from people selling their businesses in Manchester and wanting to roll over into farming.

"The rural retreat is just the ticket - a nice house in the middle of its own land means you have control. Nobody is going to build a gipsy encampment next door," she says.

Her own family, which ran an engineering business in Manchester, bought 70 acres of a former dairy farm with a house on it 20 years ago and then, five years ago, the remaining 50 acres of the original holding, including a house where Mrs Steer, 44, now lives with her husband and two children.

"My experience is that new people buying farmland manage it in a much more environmentally-sound fashion than farmers are able to," she says.

"They have the money not to have to work the land that hard." Mrs Steer and her husband, Martin, manage their 120 acres organically, growing vegetables and producing their own lamb. They have joined up with another party who keeps Hereford beef cattle.

The land is part of an old manor and is surrounded by a wall which the group has restored in traditional manner using countryside stewardship grants. "We have seen such a huge increase in the number of birds," Mrs Steer adds.

"We now have buzzards, hobbies, sparrowhawks, kestrels, lapwings, skylarks and woodpeckers, as well as other songbirds. They come to our land and not to our intensive-farming neighbours."

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Vantage Land spealises in freehold land for sale across England. We sell land from 2 acres in size as a tangible asset that could be used for paddocks, farming or recreational purposes.

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