Farmland has seen its value trebled in the last 10 years whilst the FTSE 100 Index has seen its shares fall by 20%. Any land for sale is precious. The Knight Frank Farmland Index shows that in the second quarter of this year agricultural land has increased by a huge 7%, therefore in 2010 alone total growth stands at 13%. Farmers who have their land for sale stand to make a great profit.
Knight Frank estimates that the price per acre for English farmland now stands at an impressive 5,769, however the land for sale often accrues around 7,000 per acre. In the Cotswolds alone the land for sale there is estimated at 8,842 per acre in the last 12 months. However Cirencester has seen two sales make 10,000 per acre on the land for sale there.
The supply of farmland for sale is down on last year, however Knight Frank has launched a 23,300 acre site in the Lake Vrynwy Estate in Powys on behalf of Severn Trent water so this could be an interesting gauge. This land for sale is the single largest property sale in England and Wales as it is on a 125 year long lease at 11million.
Knight Frank however estimate that farmland will increase in value but may not increase as fast as last year. The average price of farm land for sale in Gloucestershire is around 9,000 per acre and Knight Frank believe that the demand for land for sale in Gloucestershire is outstripping supply. An example is in 2006/2007 land value in this part of England stood at 3,500 to 4,000 per acre. Compare these figures to the land for sale in 2010 at 8,842 per acre on average. The prices of land have doubled in just a few years.
Land for sale in these areas are a rare commodity according to Knight Frank. They even suggest that when land such as this appears on the market, it is a once in a lifetime opportunity. Clive Hopkins, head of Farms and Estate sales in Knight Frank, believes that now is a good time to sell land because of the uncertainty in the interest rates. Therefore any land for sale can be guaranteed to achieve a very good sale price.