Rural land prices continued to climb during the first half of the year, reaching the highest levels in the survey's history, reports the RICS rural land market survey.
The farmland market strengthened, with prices rising by 22.6%, compared to 18.1% in the second half of 2006.
Demand is booming in both the farming and non-agricultural sectors. Individual farmers, with greater confidence in the profitability of the industry, are more reluctant to sell and increasingly entering the market as purchasers.
Londoners, armed with record city bonuses have continued to drive demand for residential farmland. Confidence in the outlook for commercial and residential farmland property prices remains very high.
RICS spokesperson Sue Steer says: "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. Although the availability of land increased fractionally in the last half year, supply remains constrained and insufficient to satisfy the appetites of buyers. The market is being fuelled by city buyers trying to make the most of low farmland prices, and large bonuses are entrenching these 'move to the country' trends. Farmers from Denmark and Ireland are also becoming more visible as they buy up competitively priced land in the UK. "
