Farmland values will soar by 40%, says report

Fields between East Ord and Tesco in Berwick
Fields between East Ord and Tesco in Berwick

FOLLOWING a decade of consecutive annual growth farmland values throughout Great Britain are forecast to continue their upward trend and increase on average by a further 40% over the next five years, according to research released today by Savills.

This is in stark contrast to the other property success story of prime central London, which after three and a half years of considerable price rises is likely to endure a period of little or no growth next year, but total price growth of 26% by the end of 2017.

Andrew Black, farm agency Director at Savills comments: “It is no longer a case of one size fits all and there are now clear divergences in value between the prime quality, well located blocks of arable land and the rest, which are likely to widen further.

“Across all property asset classes the economic uncertainty has pushed investors towards quality and farmland is no exception.

“This against a backdrop of limited supply is set to continue with the best in class continuing to be bought in competition while secondary and tertiary quality land and farms may struggle to find buyers, when priced unrealistically.”

The agricultural industry has suffered dramatically with lower yields and for the livestock sector higher costs due to increased housing of animals and higher consumption of forage.

Average farming incomes are estimated by Savills to be slightly lower for 2012/13.

Slower growth in farmland values is forecast after 2013 as the effects of CAP reform come into play and the rise in future commodity prices is estimated to be more conservative.