(1888PressRelease)
February 26, 2007 - New research published today shows that farmland prices are growing at their fastest rate in the Royal Institution of Chartered Surveyors' rural land market survey's history. In the first half of last year prices rose by six per cent whereas in the latter sixth months, land price inflation was running at 18 per cent.
This is down to two factors: farmers are currently keen to buy up as much land as possible in order to cash in on higher commodity prices but are being challenged by wealthy City workers, who wish to buy homes in the country for a change in lifestyle.
A third factor is that investors from abroad, particularly farmers in Denmark and Ireland who have been attracted to the UK due to both the strength of the economy and the rising prices in their homeland markets.
Sue Steer, a Rics spokesperson, said: "High commodity prices have resulted in a huge increase in demand as farmers compete with non-farming money for land.
"However, availability of land has slipped back as strong commodity prices has led to a sense of renewed optimism in agriculture and reduced the financial pressure on farmers to sell, despite rising interest rates.
"City slickers are still attempting to take advantage of low farmland prices with large bonuses encouraging ever popular City lifestyle trends."
Some 105,000 people moves to the countryside in 2005 an increase of 25 per cent over each of the previous five years, demonstrating how city-dwellers are becoming disillusioned with urban life and competing for homes in the country.
As such, country estates are becoming prime investment targets, particularly as they are popular for families on holiday, thus boosting their rental potential.
Brian Berry, head of public policy at Rics, called for the authorities to consider carefully how they build in the country as it may have a negative impact on the housing market.
"New housing in the countryside must not repeat the mistakes of the past with poor standards of design which has been so destructive to the beauty of the countryside," he said.
"The countryside and rural areas also need to adapt to changing circumstances and this may include building more homes. The countryside is not a museum."
