Shortage of Land for Sale

Land Prices in North of England, with overall picture nationally recording prices of land highest ever with a consistent reduction in supply of land coming on the market because of CAP reforms.

RICS (Royal Institution of Chartered Surveyors) has published that price of farmland continues to rise as demand outstrips supply.

land prices for the second quarter of 2004 rose by 16pc on the same period last year. According to rural property chartered surveyors, farmland prices averaged £8,630 per hectare(£3,492 per acre) nationally in the 12 months to the second quarter of this year, the highest level ever recorded.

In the North-East and North-West land sales prices for arable and pasture land have risen slightly on the first quarter of the year at £2,650 an acre for arable land and £2,125 for pasture land.

Arable land prices are comparable with the same quarter last year while pasture land prices are up by 6pc on the same quarter in 2003.

Demand for commercial farmland increased in the quarter of this year at the highest pace since the RICS survey began in 1999. Demand for land with a house is also increasing, but at a slower pace than earlier in the year.

The split between farmer buyers and non-farmer buyers remains fairly equal, as non-farmers continue to play an active role in the farmland market.

RICS rural spokesman and chartered surveyor Julian Sayers said: "Some farmers are holding back from putting their property on the market until the final implications of the single farm payment regime are known.

"The high demand, which is particularly evident in the West Midlands and Wales, is in part driven by relatively poor investment returns in other asset classes. There is also the common dream of owning a little part of the British countryside land."

So far interest rate rises do not seem to be affecting land buyer activity.

"As we start to see growing certainty regarding the outcome of the CAP mid-term review, farmers will be further encouraged to bring their land to the market if they wish to sell."

The volume of land sales reported in the second quarter of 2004 is 23pc down on the same time last year, although up 7pc on the first quarter of this year on a seasonally adjusted basis.

- James M

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