Prices for farm land reached all time highs in the first half of 2011 due to strong demand but the availability of land is slowing down the pace of growth according to the farm land survey results from the RICS. The demand is mainly due to commercial farmers being keen to expand production. Residential farmers demand didn't change much over the same period.
The 'transaction' based measure increased by 6% to £7,479/acre and the 'opinion' based measure increased by 5% to £6,115/acre. The growth rate has slowed down since H2 2010 but both measures are at all time highs.
Surveyors are suggesting that the farm land market is experiencing the same sort of subdued activity seen in the broader housing market. Commercial farmers however want to capitalise on higher commodity prices and therefore expand production.
Bare farmland prices increased in most regions but the strongest price increases were in the North East where prices were up by 14% and the East Midlands were they were up 10%. At the end of 2011 the most expensive land was in the North West where prices reached £6,938/acre, the cheapest was Scotland at £3,813/acre.
Showing posts with label RICS. Show all posts
Showing posts with label RICS. Show all posts
Thursday, 29 March 2012
Tuesday, 9 March 2010
Supply And Demand Combine To Increase Farm Prices
Farmland prices increased in H2 2009 after a slight fall in H1. The changes were due to a decrease in supply in both commercial and residential farmland sectors, stable demand in the residential sector and increased demand in the commercial sector according the the RICS Rural Land Market Survey for H2 2009. Price expectations increased but more so in commercial.
RICS publishes two different measures of farmland prices, the opinion based and the transaction based measures. The RICS opinion based measure of farmland prices increased by 4% to £12,715/hectare in H2 from £12,172/hectare in H1 2009. Arable land increased by 5% to £13,713/hectare in H2 from £13,085. Pasture land increased by 4%. In H1 it was £11,260/hectare and in H2 it increased in £11,718. The transaction based measure increased by 7.5% in H2 from £15,199 to £16,381/hectare.
Demand for farmland in the residential sector stabilised during H2 2009. Demand for commercial farmland increased. Some surveyors suggest commercial farmers are still interested in expanding their operations. Surveyors also suggest that low interest rates are making commercial farmland more attractive to non-commercial buyers. Supply however is falling in both residential and commercial farmland sectors. These conditions are expected to continue which will help increase prices further during 2010.
RICS publishes two different measures of farmland prices, the opinion based and the transaction based measures. The RICS opinion based measure of farmland prices increased by 4% to £12,715/hectare in H2 from £12,172/hectare in H1 2009. Arable land increased by 5% to £13,713/hectare in H2 from £13,085. Pasture land increased by 4%. In H1 it was £11,260/hectare and in H2 it increased in £11,718. The transaction based measure increased by 7.5% in H2 from £15,199 to £16,381/hectare.
Demand for farmland in the residential sector stabilised during H2 2009. Demand for commercial farmland increased. Some surveyors suggest commercial farmers are still interested in expanding their operations. Surveyors also suggest that low interest rates are making commercial farmland more attractive to non-commercial buyers. Supply however is falling in both residential and commercial farmland sectors. These conditions are expected to continue which will help increase prices further during 2010.
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