Prices for farmland in England hit record levels in the first quarter of 2007, with an average acre costing £3,353, according to new figures from National Property Specialists Strutt & Parker’s Farmland Database. This represents a 14 per cent increase over the past year. Strutt & Parker expect the farmland market to outstrip the residential market this year. The residential market has a definite North–South divide, whereas farmland prices vary by only £150 or so per acre above and below the £3,353 average throughout England.

Farmland’s all-time high is due to the limited supply coming to market. Whilst the first quarter of this year was the busiest for land sales for eight years (with approximately 26,000 acres sold), only about 8,400 acres of new land entered the market – the lowest amount since 2001.

‘There is a massive shortage but huge demand,’ says Mark McAndrew, Head of Estates and Farm Agency at Strutt & Parker. ‘In each of our five selling regions, no more than 3,000 acres came to market during the first quarter of 2007. That could represent only two or three sales. It means that purchasers need to be either very patient or very flexible about where they want to buy.

‘Today’s buoyant market is linked more to the strength of the UK economy than to the state of farming or quality of land. There has never been so much money in the farmland market, from farmers but also from investors and lifestyle buyers. In addition to UK wealth, we have seen an influx of European investors, particularly from Denmark and Ireland, where prices are substantially higher than in England.

‘Now is a great time to sell; although you can never predict when the top of the market will be reached, record prices today are as good a reason as any. It’s a great time to buy, because with such limited supplies we expect the farmland market to be set fair. And it’s a great time to trade: there is so much interest – and money – out there.’