The latest RICS Rural Land Survey reveals demand for all types of farmland continues to rise across much of the UK, while the supply of land took a turn for the better in the south west.
Over the past six months 47% more chartered surveyors across the UK reported a rise rather than a fall in demand for commercial farmland. However the south west saw a slight fall back in commercial demand with 52% reporting a rise in demand rather than a fall – down from 58%.
While for residential farmland demand is improving, with 28% more surveyors in the south west reporting a rise rather than fall, up from 13% in the last half of 2009. This compares to 14% across the UK.
The supply of farmland to the market continued to decline across much of the UK, but improved within the south west. The net balance for availability of commercial farmland within the region improved from -46 to zero, while residential farmland saw the net balance improve from -38 to zero.
Although land values remain high, the survey results present a mixed picture. Farmland prices improved within the south west and arable land now stands at £14,827 per hectare (up from £13,591). The opinion based measure of bare land prices across the UK saw increases of 6% to £13,530.
Looking ahead, surveyors expect farmland prices to continue rising over the next 12 months due to the imbalance in supply and demand. However, it is the commercial farmland sector which can expect to see the sharpest price rises, with 52% of surveyors within the south west expecting prices to rise rather than fall.
Commenting on the state of play in Cornwall, Andrew Body from Lodge & Thomas said: “Strong demand remains for all land with some exceptional prices being paid where there is keen competition between neighbouring farmers.”