UK Farmland Prices Are Highest Since at Least 1994, RICS Says

28 September 2007 - Source: http://www.bloomberg.com/apps/news?pid=newsarchive

U.K. farmland prices rose to the highest in at least 13 years in the first half as farmers and international buyers vied with City financiers, according to real estate brokers.

Rural land prices were 23 percent higher at the end of June than a year earlier, rising to an average of £8,850 ($17,900) a hectare (2.47 acres) the Royal Institution of Chartered Surveyors said in an e-mailed statement today.

Prices were stoked by a shortage of land, leading to the fewest number of sales in three years.

"Rising commodity prices and increased interest in biofuels have resulted in a bit of a feeding frenzy for farmland as farmers compete with investors, foreign farmers and lifestyle buyers for properties," RICS spokeswoman Sue Steer said in the statement.

Higher commodity prices are encouraging farmers to expand just as bankers, brokers and hedge fund managers use bonuses to buy land. U.K. farmers accounted for half of all purchases, the highest since RICS started its survey in 1994.

The number of sales fell 29 percent in the first half, returning to the level of the first half of 2004.

Financial buyers are more interested in the location of the land they are buying than the quality of the soil, the RICS said. The biggest increase was in Scotland where prices surged 62 percent from a year earlier.

The greatest number of international buyers are from Ireland and Denmark, where land prices are much higher, it said.

 

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