English farmland prices continue to firm

English farmland prices rose on average by 3.7% in the three months to the end of June, according to Knight Frank.

The increase takes 12-month growth to 2.3% following a marginal rise in the first quarter of 2012 and a drop of 2% in the second half of 2011.

The real estate agent estimates the current value of English agricultural land at £6,295/acre, almost £140 above the previous record high of £6,156/acre reached in summer 2011.

Andrew Shirley, head of rural research at Knight Frank, comments: “We are seeing interest from a wide variety of investors, as well as farmers. The on-going economic troubles in the Eurozone and other parts of the world only seem to enhance farmland’s reputation as a safe-haven asset.”

The firm’s head of regional farm sales in Central and Western England, James Prewett, adds: “I am now starting to see genuine bids from private Chinese investors. They tend to already own property in London, so are starting to feel more confident about buying other assets here. Part of the attraction is lifestyle, but investment seems to be the main driver.”

However, farmers remain the most active buyers and will currently pay high prices for the right land.

Looking forward, Knight Frank expects average farmland values to continue to firm over the rest of the year.