Land News

Farmland Investments Rising

Lawson Fairbank 11th May, 2005

With house prices stagnating, investing in farmland may prove to be the alternative property investment.

According to the Royal Institution of Chartered Surveyors’ (RICS) rural land survey, farmland prices are still rising strongly.

Strong demand against falling supply pushed prices up by 25% in Q4 of 2004. Successive interest rate rises have contributed to a slowdown in the demand for mainly residential farms, although RICS finds no signs of a collapse.

The lifestyle buyers have fallen by 10% in the last year thanks to rising borrowing costs, however individual farmers buying have increased by 7%.

According to RICS rural spokesperson, Julian Sayers:

‘Despite the further decline of farmland availability, supply conditions are expected to improve as the implications of the Single Farm Payment are clarified. Both increased caution from non-farmer buyers and expectations for better availability in 2005 have led surveyors to believe that commercial and residential farmland property prices will flatten out over the coming year’.

Farmland prices in 2004 rose by 25%, compared to just 7% in 2003, the largest increase since 1994.