Agricultural Land Market Survey

The Spring 2008 Agricultural Land Market Survey has been produced by Savills.

The key points from the survey are:

The value of farmland is in a period of exceptional growth. Values in excess of £7,000 per acre were achieved in 2007, often for large commercial farms which are in very short supply.

Historically, farmland has been a safe, low risk investment with farmland giving an annualised total return of more than 10% over the last 30 years. However, this sector's recent performance is now attracting widespread interest from traditional investors, fund managers and City investors.

Growing confidence, fuelled by rising commodity prices, amongst farmer buyers has added to the strong demand for farmland. In 2007 farmer buyers represented 53% of all purchasers with the majority citing expansion as the reason for purchase.

Overseas buyers continue to be a key feature of the market, representing 21% of all buyers in 2007. The Danes and Irish being the most significant representing 10% and 5% of buyers respectively.

The residential component of farms and estates makes a very significant contribution to final value. The market for property at the top end, over £163;4m, proved to be more resilient to the general slowdown, giving the best performance overall

We expect supply to remain tight into 2008. Farmer confidence will remain high creating a group of active buyers and hesitant sellers. We expect farmland values to increase again during 2008 and forecast growth of between 25 and 30% with additional premiums paid for large good quality farms.

To read the full survey, click here