The cost of land in the region rose on average by seven per cent in the last year and Matthew Peters, specialist in agricultural sales says that shortage of supply will continue to drive prices upwards.
“In the last half of 2013 we saw developers across the region, prompted by the Government’s relaxation of planning regulations, coming back into the market in a big way making strategic purchases of land that is near to the towns and cities.
“That has pushed the prices of the remaining farmland up and people are now seeing it as a good investment. While interest rates remain low and tax reliefs are available we will continue to see values rise.”
The twice-yearly RICS Rural Market Survey showed that in the second half of last year, the average cost of farmland in the region rose to £7,763 per acre, hitting a record high for the eighth consecutive period. The cost of land is now seven percent higher than during the same period in 2012 when an acre cost, on average, just under £7,250.
Matthew said that behind the headline figures arable land had risen by above that per centage while pasture land had not risen so much.
He said: “It is an undersupplied market place and demand has been high. We are seeing a lot of farmers looking to expand and not much on the market-place. There is very little rural land being marketed at the moment.
“We are finding that most deals are being done privately with land owners knocking on the door of their neighbours and asking them if they can buy land off them. Some of those private sales have been very large in the South West and for good prices, way above the average.
“Of course the full effects of the recent flooding in parts of the region have yet to be felt fully but with the measures now being promised to mitigate the effects of flooding in places like the Somerset levels there is every reason to believe that it will have little effect on land values.
“We have a commodity in the region that is in short supply and with a strong demand and that is pushing the price up, which is a great benefit for land owners.”
Matthew is an experienced auctioneer providing agricultural property sales and valuations, including rural estates, farmland, country houses and equestrian properties. He regularly produces valuations for bank security, partnership, matrimonial, tax and expert witness.
Having been involved in agricultural deals in other parts of the country he says the South West is performing well against other regions.
For rural and agricultural property advice as it breaks follow @Agri_AdviceUK.