Business

Price of farmland trebles in less than a decade

harvesting
Image caption Farmers are buying more land to increase production

The price of farmland across the UK has more than trebled in less than a decade, according to new figures.

The Royal Institution of Chartered Surveyors (Rics) described the rise as "nothing short of staggering".

According to the Rics survey, farmland now costs an average of £7,440 an acre, compared with £2,400 an acre in 2004.

The record rise in prices is being put down to increasing demand from investors, as well as farmers wanting to expand.

Even though wheat prices have fallen substantially this year, the survey suggests that many farmers are keen to capitalise on the general trend of rising commodity prices.

Investors, in the form of pension funds, sovereign wealth funds and rich individuals, have also been buying farmland.

"In less than ten years we've seen the cost of an acre of farmland grow to such an extent that investors - not just farmers - are entering the market," said Sue Steer from Rics.

£10,000 per acre?

The most expensive place to farm in the UK is north-west England.

Land prices here have risen by 35% in the last six months alone.

The price here is £8,813 per acre, compared to Scotland, where land averages £4,438 an acre.

But even the Scottish figure is a new record.

And Rics expects the rise in land prices to continue over the coming year, as demand continues to out-strip supply.

"If the relatively tight supply and high demand continues, we could experience the cost per acre going through the £10,000 barrier in the next two to three years," said Sue Steer.

However, it is not thought that the increasing price of land will have a serious impact on the price of food.

Food prices are more closely tied to global production levels, and the quality of harvests.

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