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City slickers will continue to buy farmland says mfg
Published March 2008
Soaring farm land prices are set to continue despite the slowdown in the commercial and housing sectors, according to agricultural experts at mfg Solicitors.
Agricultural and rural affairs partner Iain Morrison believes that a reported slowdown in land investment by so called “lifestyle buyers” - worried about shrinking city bonuses - will not affect a buoyant market in the long term.
He said: “In most regions demand outstrips supply, and there is increasing interest from countries like Ireland and Denmark where prices in most areas of the United Kingdom compare favourably.”
Demand from so-called “lifestyle buyers” for farmland is falling according to the Royal Institution of Chartered Surveyors, even though the surge in commodities prices has seen values for workable farmland rocket to record levels.
In recent years the new rich industrial class, including affluent city workers using their bonuses, have invested heavily in farmland.
The “lifestyle buyers” appear to have slowed down their buying spree because of the economic slowdown according to the new report.
It says farmland prices rose by almost 28 per cent in the second half of last year, but slowed to 22.6 per cent in the first half of 2007.
Mr Morrison believes the continued growth of agricultural land values is expected due to the relatively short supply of farmland combined with the growing purchaser profile.
Recent reports, he said, indicated it was the grassland sector which had seen the most growth where increases of 41 per cent and 63 per cent were recorded last year in some areas for medium and poor quality pasture respectively.
He added: “Despite the slight downturn, I believe so-called ‘lifestyle buyers’ will continue to generate strong demand for such land, with many looking to buy farms located in picturesque locations.”
According to the Royal Institution of Chartered Surveyors “lifestyle buyers” have accounted for as much as 40 per cent of all purchasers in recent years, however this reduced to 30 per cent during 2006 following increased competition.
The average price of arable land rose to £10,949 per hectare, from £9,929 in the first half of 2007, breaking the £10,000 per hectare barrier for the first time in the survey’s 13-year history.
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