DEMAND for North West farmland continues to grow strongly, with half the region’s chartered surveyors reporting increased activity over the past year.
The cost of farmland in the UK rose by three per cent in the first half of 2014 to £9,594 an acre, according to the latest RICS/RAU rural land market survey - with prices now 12 per cent higher than a year ago.
In the North West, the price of the average acre fell in the first half of 2014 to £8,250 from £8,813, a 6.4 per cent reduction.
But one South Lakeland-based expert says this trend is being bucked by small parcels of farmland in Cumbria, which can command more than £10,000 an acre.
Nationally, the increase now means that farmland costs more than four times what it did when RICS first began recording rural land market data in 1994 - when land cost £2,028 per acre.
In the North West, a net balance 50 per cent of chartered surveyors said they had seen rising demand for farmland over the past year, compared to 33 per cent in the same period in 2012, while 75 per cent predicted demand would continue to rise over the coming 12 months, up from 50 per cent in 2013.
Julian Lambert of Carter Jonas in Kendal said: “We operate in an area where grades of land vary enormously, from rough fell and rocky pastures to good grazing and meadow land. They all command differing prices, even if they are all in roughly the same neighbourhood, which they often are.
“Factored into this is the type of buyer, ranging from the established farmer wishing to augment his holding, to those wishing to start a farm business from scratch, and those for whom the lifestyle is the biggest driver.
“Others are keen to buy even small parcels of land to bring the area of their holding above the minimum now required for the new Basic Payment Scheme, due to be implemented in January 2015, which is now five hectares. Thus small parcels of land can often exceed £10,000 per acre by a substantial margin.”