Farmland Prices

According to recent RICS data on farmland prices during H1 2008 there was a 47% rise year-on-year, the fastest in the survey's history, compared with 28% year-on-year in H2 2007. In H2 2008 both arable and pasture land prices fell.

Reported sales increased by 50% in year to H1 2008. The revised figures for H2 2007 show a fall of 2%. In H2 2008 farmland sales increased 16% to 270. Individual farmers share of purchases increased from 50-60% between H2 2007 and H2 2008 and agricultural businesses share increased from 5-8%.

Strong demand below all the time high of H1 2007 in H1 2008. Residential demand fell for the first time since Q4 2005 during the same period. In H2 2008 demand for residential and non-residential land both fell and in the residential sector it was the fastest fall in the survey's history. The lifestyle buyers were once one of the main drivers of the residential sector. Commercial sector demand is still strong. UK banks have been willing to lend to the agricultural sector and it has risen by 8.2% year-on-year.

The increases in availability in both residential and commercial sectors from H1 2008 remained stable. Rising input costs have been making it more difficult for many of the smaller farming estates. Residential sector supply fell at the fastest rate since H2 2005.

Commercial sector farmland price expectations remain positive, above the long run averages. Residential farmland price expectations became negative for first time since Q4 2005 in H1 2008 and fell further to the lowest in the survey's history in H2 2008.

The average price for arable land in England and Wales was £13,182/ha in H2 2008 down a fall from £14,463/ha a 20% change over the year and for pasture £11,490, from £11,477/ha and an annual change of 16%. The range was £11,120 to £14,827 for arable and £12,356 to £7,660 for pasture. The average rent in England and Wales for arable land during H2 2008 was £155 (AHA 86) and £226 (ATA 95) and for pasture £114 (AHA 86) and £164 (AHA 95).