Demand for Country Land Booms
Townies and City slickers desperate to buy up rural retreats are pushing the price of farmland up to record highs.
The Royal Institution of Chartered Surveyors in its land price report said the cost of farmland rose by 16% during the past year as demand continued to outstrip supply.
It said much of the rise was driven by so-called lifestyle buyers snapping up rural land and property, with non-farmers accounting for only 43% of sales during the three months to the end of June.
Increasing numbers of people are opting to quit the rat race and move out of cities across the country, boosting the cost of farmland and pricing locals out of the property market.
The group said demand from non-farmers had been driven by a pick up in the economy and the associated increase in City bonuses.
RICS rural spokesman Julian Sayers said: 'The high demand, which is particularly evident in the West Midlands and Wales, is in part driven by relatively poor investment returns in other asset classes.
'There is also the common dream of owning part of the British countryside. So far interest rate rises do not seem to be affecting buyer activity.'
During the year to the end of June farmland prices averaged a record £8,630 per hectare. Surveyors said the price rise was being exacerbated by a decline in the amount of land coming on to the market, largely due to the uncertainty created by the mid-term review of the Common Agricultural Policy.
At the same time demand for land increased at its fastest pace during the three months to the end of June since RICS began the survey in 1999.
The group added that demand for land with a house on it also rose, but at a slower pace than during the first quarter of the year.
The cost of farmland is expected to continue increasing over the coming 12 months reflecting the shortage of land coming on to the market. The price of land which comes with a farmhouse is expected to rise particularly strongly.
The Countryside Agency reported earlier this year that the large influx of people leaving towns is causing increasing problems for locals who are being priced out of the housing market.
The rural idyll remains strong among metropolitan workers who would like to cash in some of the gains they’ve made in their property but the desire to move away from towns and cities means there are fewer and fewer affordable homes available for local families.
The Countryside Agency said that homelessness is an increasing problem in remoter areas with many young people there forced to move away to afford a home when they start in work.
Pressure from 'incomers' is also evident in a good deal more rural road use, partly due to the trips new arrivals in the countryside make to towns for work and shopping.
thisismoney.com, 26th August, 2004 (originally published 30th July)