Shropshire Star

Shropshire farmland soars in value but end to rise in sight

The price of farmland in Shropshire and the West Midlands soared to a fresh high in the second half of last year – but the crisis in dairy farming could finally lead to a levelling off in values.

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The average selling price of an acre of agricultural land increased by 7.5 per cent to £8,875 per acre, according to a new survey from the Royal Institute of Chartered Surveyors.

Across the UK, prices rose to an average of £10,067, marking the 11th consecutive period in which prices reached new record highs.

But according to surveyors in Shropshire, demand for agricultural land is finally beginning to match the amount on offer as farmers feel the effects of the collapse in commodity prices.

Tim Main, of Balfours in Shrewsbury, said: "I don't think we will see the increases we have seen in the last five years in the foreseeable future, although I don't see prices going backwards.

"Last year we saw a little bit less land come to the market nationally, but in Shropshire there was a little bit more than usual.

"There was also more work through receivership, because of the pressure on dairy farmers, because banks are taking a tougher view, and because there's always a little bit of land comes through that way."

Mr Main added that demand for smaller blocks of land with good access remains high, with farmers looking for 'bolt-ons' to their existing property.

But he said there was less interest in larger blocks of land.

Victoria Pocock, of surveyors firm Carter Jonas in Shrewsbury, added: "The struggle with poor milk price is clearly having an adverse effect on farm incomes and we are likely to see more land and farms to come onto the market in spring 2015 as a result of this.

"With the lead up to the general election there is likely to be some effect for both buyers and sellers but only time will tell on this."

However, Jack Tavernor of Shrewsbury firm Strutt and Parker added: "Demand overall, particularly from commercial farmers is not being satisfied by the supply coming forward and I don't anticipate this supply and demand balance changing any time soon.

"The dairy industry in particular will experience tough times but I don't expect this to mean a significant amount."

The increase in demand from so-called lifestyle buyers continued during 2014, including in the West Midlands, the survey said.

According to the RICS, that is adding to price pressures in the region, and could yet lead to further increases in the price of land despite reports of softening demand in Shropshire.

According to surveyors in the West Midlands, average arable land rents grew during 2014 to £165 per acre, while pasture rents rose by 13 per cent to £130 per acre.

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