In the first half of 2013, the average cost of farmland in Great Britain jumped to 7,441 British pounds ($11,629) acre or about three times its cost in 2004 of about 2,450 pounds ($3,829), according to a report quoting the latest Royal Institution of Chartered Surveyors Rural Land Market Survey.
As with recent U.S. land price surveys, Great Britain’s farmland prices are record highs, and those paying the high prices are confident that land investment is a safe way to use their money and can provide return on investment better than other investment opportunities.
Also in common with the U.S. is growth in farmland prices being driven by a surge in demand from farmers and investors alike. Interest from potential buyers started to steadily grow at the beginning of 2006, the surveyors organization reported. Increases in commodity prices began leading farmers to expand agricultural operations and big prices being paid for quality land.
Investors increasingly have seen land as a sound economic bet.
What might be a little different in the U.S. than Great Britain is that “lifestyle or hobby farm demand has not grown.” But the UK Business Property online news service notes that the report explains how house building land on the periphery of settlements is in demand and the sellers of this land generally turn around and roll their land sale money back into buying other rural land.
“Land sales are being increasingly conducted by tender rather than auction because of the time that bank funding is taking to arrange,” noted the business reporters. “Banks are very willing to lend on farmland, though it has to be clear that the business can afford the debt.”
“Demand for commercial farmland is expected to remain firm for the next year. The picture around the country sees the North West as having the most expensive land after a 35 percent increase in the first half to £8813 per acre, while Scotland has the cheapest land at £4438 per acre,” the UK Business Property reported.