Land prices boosted by City buyers

A flood of cash from high-flying City buyers desperate to find a place in the country is driving demand, according to the latest survey of farmland prices.

A flood of cash from high-flying City buyers desperate to find a place in the country is driving demand, according to the latest survey of farmland prices.

Norfolk chartered surveyor Christopher Miles reported “strong demand for commercial farms and estates as City and international buyers compete” in a narrow market.

He is selling a 600-acre West Norfolk estate, Wallington Hall, near Downham Market, which has gone on the market with a £5m price tag. It is one of the largest single estates to be offered for several years in the county.

City bonuses have fuelled higher demand from amenity and lifestyle buyers, the latest quarterly survey by the RICS (Royal Institution of Chartered Surveyors) reveals.

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While land prices rose by just three per cent to an average £3,770 an acre on the year, the demand for residential farmland rose at the strongest pace for two years. Almost half the buyers are non-farmers, bolstered by a tide of City money from record bonuses.

As non-farming money has poured into the market, there has been growing interest in buying farmland. Agents across East Anglia report “demand strong in most locations.”

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Land agent Jim Bryant, of the Cambridge office of Bidwells, said: “The expected increase of farmland into the market in the early part of this year has not happened but a greater supply is now starting to emerge.”

The RICS rural land market report is based on 81 farmland sales in England and Wales covering 9,884 acres. It notes: “The availability of residential and non-residential farms is historically very low having fallen for most of the past six years.”

Although prices for commercial farmland are expected to remain flat in the next 12 months, the gradual resolution of the Single Farm Payments fiasco may bring more land to market. Farmers have been reluctant to sell because of uncertainty of the implications of the new subsidy regime.

“The price of residential farmland is expected to increase strongly, driven by demand from amenity and lifestyle buyers,” said RICS spokesman Julian Sayers.

In West Norfolk, Sarah Land, of Robin Landsdell & Co, said: “The supply of land appears to have increased marginally but SFP (Single Farm Payment) issues are restricting the supply coming onto the market.”

In south Norfolk, Edward Baskerville, of TW Gaze & Son, of Diss, said: “Small areas of land still command the highest values with 10-acre block of bare arable land achieving £5,000 an acre.”

The RICS pointed out that for the first time, the survey's headline farmland figures are based on the views of the 128 chartered surveyors on typical prices for arable and pasture land.

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