Agriculture prices reach record levels

A massive shortage of farms on the market is forcing land prices to record levels, a leading Norfolk land agent Mike Gamble has said.

A massive shortage of farms on the market is forcing land prices to record levels, a leading Norfolk land agent Mike Gamble said yesterday.

There was a 20pc rise in farmland prices as a flood of money from foreign buyers, the city and even local farmers looked for a home, according to the latest half-yearly report from the Royal Institution of Chartered Surveyors.

“Demand far outstrips supply for all agricultural properties. If a farm comes available, then we're getting keen interest from every sector - from buyers in Ireland and Denmark and locally,” said Mr Gamble, who is a regional RICS spokesman.

Mr Gamble, of Norwich-based Irelands, said that a block of 270 acres of bare land near Norwich last autumn even attracted interest from the Irish Republic but not a bid.

“In my years in the profession I've never known such demand for land,” he added.

Christopher Miles, of the Norwich office of Savills, reported “strong demand from all types of buyers - investors, farmers, lifestyle buyers and Europeans - leading to a surge in values in the last six months. We have a record number of people looking with more than £5m but very little supply,” he added.

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Buyers from Denmark enjoy tax advantages, which makes it more attractive to buy land outside their native country.

The RICS report revealed that demand was extremely strong for both residential and bare farming land and prices had increased at the fastest rate in the survey's history after a 4pc rise in the first half of the year.

The dash for land and rapid rise in prices was driven by lack of supply, which saw just 36,323 acres change hands in the past six months in England and Wales - an average purchase of 164 acres by the 221 purchasers. In the first half of last year, 23,200 acres were sold by comparison.

The exceptionally strong demand, which has seen land prices rise to more than £3,300 an acre, has been driven by “life-style buyers” with record city bonuses and farmers also keen to expand production as commodity prices have recovered.

Charles Baskerville, of TW Gaze & Son, of Diss, said: “We've seen a complete resurgence in arable land values over the past three months. Following the sharp increase in cereal prices post harvest, we have seen arable values increase by as much as 50pc in three months.”