Sales activity closing in on four-year high
Farmland prices have reached the highest levels in the survey’s history reports the RICS rural land market survey for Great Britain. Rising 9% year on year in Q2, sales activity is nearing a four-year high.
Following the resolution of the Single Farm Payments scheme in the CAP reform package, demand in both the residential and non-residential sectors has greatly exceeded supply, with demand for commercial farmland remaining robust – fuelled by Irish farmers buying into the market this quarter and prices rising strongly.
The rise in residential farmland continues to reflect this year’s housing market boom, with strong city bonuses sustaining amenity and lifestyles buyers.
The availability of farmland in both the residential and non-residential sectors also continued to build momentum. Non-residential land outpaced that of residential land, rising at the fastest pace in the survey’s history.
More farmland has come on to the market, helping sales activity to rise by 77%, the highest levels since Q3 2001.
Chartered Surveyors predict that the residential market will remain buoyant, spurred by a strong economy and housing market.
Expectations for commercial farmland has seen surveyors make upward revisions in light of the single farm payments issue being resolved.
RICS spokesperson Sue Steer commented: "Resolution of the single farm payment issue has pushed land onto the market, increasing sales activity.
"Investment from Ireland and elsewhere has led to demand outstripping supply.
"With Irish land being sold for residential development, Irish farmers are taking advantage of relatively cheap farmland in the UK.
"Residential farm land is still however attracting lifestyle buyers as town dwellers attempt to escape from the madding crowd, pricing locals out of the market."
RICS, 09.08.2006