Land values marching on

April 1st, 2008

The latest survey by the RICS confirms that UK farmland prices are surging at their fastest pace for many years. In the second half of 2007, prices rose by 27.9 percent compared to 22.6% in the first half of 2007.

As we have seen at Killens, improved commodity prices have encouraged farmers to expand production and enter the land market with demand outstripping supply. Whilst overseas buyers have been keen to purchase some of the larger farms, smaller farms have tended to go to those outside the farming community – the lifestyle buyers – although there are signs that these buyers are now retreating from the market in line with the current downturn in economic confidence.

In the current climate, farmland can be an attractive investment and, subject to careful handling, may be tax efficient. Tom Killen said: “It is now very difficult to give an indication of average agricultural land values as there can be wide variations dependent upon many factors. We have seen prices increase from £3000 a few years back to up to £6000 per acre now. Smaller paddocks still seem to be in strong demand with premium prices achieved.”

Are you considering selling? 2008 may be the year to sell. At Killens, we have widespread experience of the sale of all types of agricultural property by auction or private treaty.