Agricultural Land Prices

Usually purchased as a business investment for farming purposes agricultural land will not usually have planning permission, however, that is not to say planning permission to change the purpose of the land cannot be obtained in certain circumstances. Agricultural land falls into two categories, that of arable land and pasture and grazing land. Arable land requires specific soil conditions as well as good location which means that it is in limited supply and therefore sold at a premium.

The average price of arable land rose to £10,949 per hectare in the first half of 2007, thereby breaking the £10,000 per hectare barrier for the first time in the Royal Institution of Chartered Surveyor's 13 year survey history. However, land that is of high quality and well-located can fetch prices of well over £15,000 per acre. Although pasture or grazing land is in far greater supply and therefore fetching lower prices, these can still fluctuate, with quality and quantity obviously playing an important role in the final price.

During the first half of 2008 the value of agricultural land continued to increase with prices rising at their fastest rate ever. The average price rose by 24% in the first half of 2008 and by 47% year on year. Availability of agricultural land rose by 32% in the first half of 2008. With evidence of more land coming onto the market during the latter part of the year, a levelling off in the rate of price increase is likely. However, well located agricultural land is still being seen by private investors as a realistic alternative to stocks and shares.