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Price Of Farmland Trebles In Less Than A Decade

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http://www.bbc.co.uk/news/business-23792583

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.

Farm to let?

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How would anyone knowwhat the price has done over a decade?

UK ag land is one of the most illiquid markets there is.If 1% of it transacts annually,I'd be surprised.

Edited by Sancho Panza

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Good grazing land in the west of Ireland is fetching around €10k per acre. I think farmland in Bulgaria is a bit cheaper but then you would have to ship your wares a long way to market.

I think land prices are closely related to

1) EU single farm payment subsidies that can be obtained by doing nothing.

2) The quality of the land

3) The cost of oil, as you have to transport your goods to market.

4) To a lesser extent credit availability and demand,

5) Interest rates.

Most will have to borrow to buy land so if interest rates are low and food prices high you can borrow more and more against the rising food price.

Edited by Gone to Ireland.

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Good grazing land in the west of Ireland is fetching around €10k per acre. I think farmland in Bulgaria is a bit cheaper but then you would have to ship your wares a long way to market.

I think land prices are closely related to

1) EU single farm payment subsidies that can be obtained by doing nothing.

2) The quality of the land

3) The cost of oil, as you have to transport your goods to market.

4) To a lesser extent credit availability and demand,

5) Interest rates.

Most will have to borrow to buy land so if interest rates are low and food prices high you can borrow more and more against the rising food price.

You forgot the likelihood of being able to get planning permission to build houses.

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There is a side issue on the planning debate which rarely gets mentioned.

Planning in the UK is double edged in that on one hand it helps the housing VIs by restricting available land to build on but on the other hand it helps to support farmers through cheap land (because of enforced less demand for farmland).

For sure many of the housing VIs will have connections to farming.

Just saying.

Edited by billybong

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There is a side issue on the planning debate which rarely gets mentioned.

Planning in the UK is double edged in that on one hand it helps the housing VIs by restricting available land to build on but on the other hand it helps to support farmers through cheap land (because of enforced less demand for farmland).

For sure many of the housing VIs will have connections to farming.

Just saying.

You might also want to consider that farmland in exempt from inheritence tax. It also receives generous EU payments from merely owning it. So with cash returns low, you can invest in something which gives you a yield without having to go to the trouble of actually growing actual food.

Get rid of these state subsidies andwe might see a more sensible market.

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You forgot the likelihood of being able to get planning permission to build houses.

You won't be wanting to build on it when food it produces becomes more expensive than houses. ;)

hourglass.jpg

Edited by winkie

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You won't be wanting to build on it when food it produces becomes more expensive than houses. ;)

hourglass.jpg

But, but but we have only built on 5%

AND

There is no government in the world that do not pass problems onto the next generation, why is land use different to passing on trillions in debt? <_<

Anyway the world will run out of fuel before scarcity of farmland causes starvation.

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But, but but we have only built on 5%

AND

There is no government in the world that do not pass problems onto the next generation, why is land use different to passing on trillions in debt? <_<

Anyway the world will run out of fuel before scarcity of farmland causes starvation.

......but, but, but, land can produce fuel, there are already fields of solar panels, wind turbines and rapeseed oil fields amongst others.....water, the right amount of sunshine and fertile soil also required in the right places with the right climates......not all land is suitable land.....how much does that leave us with? ;)

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Andy Wightman on the matter:

http://www.andywightman.com/?p=3069

Looking at the Rural Market Survey report, itself (which is only available if you register as a RICS site user), things become clearer. The basis for the claim that "prices had trebled in less than a decade" is based upon "an opinions based measure (which is a hypothetical estimate by surveyors of the value of pure bare land)."

wightman.jpg

:lol::o

post-8947-0-23132100-1377279498_thumb.jpg

Edited by aSecureTenant

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You would think the prices would more reflect the global market than the UK. I dont think farmland is anything like this expensive in the US or South Africa.

The climate ( both weather and political) is more predictable in the UK and one reason agricultural land is worth more than in the US or SA.

Produce is sold on the world market, so with a devaluing currency the land will be worth more to a farmer (in sterling - or the same in a basket of other currencies)

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