News
March 2011
Price of land expected to rise
The price of good-quality land is expected to rise sharply during 2011 as speculative investors vie with expanding farmers for the best plots.
Real estate service provider Savills said it had a record number of people on its books looking for land, with large farms particularly in demand.
In its Agricultural Land Market Survey 2011, the firm predicted that strong commodity prices and an improving prime country house market would help maintain values this year, although growth may soften in 2012 due to the impact of reforms to the Common Agricultural Policy (CAP).
Land values in the UK are set to increase by an average of 9.7 per cent this year, according to the report, although that masks fairly wide variations with weaker growth of around five per cent expected in areas dominated by grassland farms with no residential or amenity appeal compared to around 15 per cent for good-quality, mainly arable, farms and top-quality estates.
Savills said that, while an increase in interest rates could put downward pressure on prices, its effect would be minimised as only one in four land purchases are currently purchased through loans. Any adverse changes to land taxation may also affect prices, the firm suggested.
