Farmland prices reached another record high during the final six months of 2013, having jumped around 15 per cent in the space of a year, according to new market research.
During the second half of last year, the average cost of farmland rose to £7,754 per acre across England and Wales, hitting a record high for the ninth consecutive period, figures produced by the RICS/RAU Rural Land Market Survey H2 2013 show.
The cost of land is now 14.3 per cent higher than during the same period in 2012 when an acre cost, on average, just under £6,800.
Growth in prices has been driven by the on-going surge in demand from farmers looking to expand their operations, RICS said, while the amount of land coming up for sale is continuing to lag well behind.
But with many areas hit by severe flooding in recent weeks, it remains to be seen what impact this will have on the price and saleability of farmland in some areas.
Looking ahead, chartered surveyors are predicting that prices will continue to rise over the coming year.
Jeremy Blackburn, head of UK policy at RICS, said: “Farmland price growth has been enormous in recent years.
“With commodity prices now having remained strong for some time, many farmers have been looking to expand their businesses and, with so little actually coming up for sale, competition for good land is fierce.
“Although, with floods having devastated large swathes of southern England, what remains to be seen is the impact this has on the market in these areas and further afield.
“It will not be surprising to see this have a negative effect on transactions.
“In fact, a lot of the best quality and highest value agricultural land in the UK is located close to rivers and on floodplains so this too could potentially have an impact on food production.”