Land price almost triples over 10 years

Average price for an acre of grade 3 arable land in Yorkshire is now £5,230 an acre and grade 1 land can fetch £8,000 an acre or more. Ten years ago, grade 3 land averaged £1,800.

Ian Bailey, head of Savills’ rural research team, said: “We expect farmland growth rates to slow as the market becomes increasingly polarised, with a strengthening correlation between values and land type, quality and location.”

The Savills report on activity so far this year says non-farming “lifestyle” buyers have represented about one-third of all buyers.

Another estate agency, Strutt & Parker, has pointed out a growing interest in woodland – fetching twice as much as it was before the credit crunch began in 2008.

Commercially viable woodlands are selling at up to £3,000 an acre because they are “considered to be tax-efficient, low-risk investments which also offer potential for commercial timber production and biomass schemes,” says Strutt & Parker.

Timber prices have increased by 34.8 per cent since March 2010 and the latest Forestry Commission Timber Price Indices show the highest price for standing timber since 1999, in real terms.

Mark Herrod, an expert in woodland ownership for Strutt & Parker in Harrogate, said: “Neglected coppice woodlands, conifer thinnings, under-managed broadleaf forests and poor quality timber that would previously have been considered useless can now be used in the production of woodchips and pellets for biomass boilers. Additionally, there are financial incentives. The Renewable Heat Incentive is due to be introduced later this summer. In some areas, interest-free loans are available for the purchase and installation of biomass boilers. And commercial woodlands can be exempt from Capital Gains Tax and Inheritance Tax, if it can be demonstrated to the Inland Revenue that they are managed to a commercial standard.”