The value of bare agricultural land increased by two per cent to an average of £4,900 per acre in England between July and September 2009; the first rise in 2009 as values remained consistent during the first half of the year at £4,800 per acre and a total rise of 7 per cent since mid 2008.

However, Smith Gore’s survey of publicly marketed land found that the value of equipped farms fell by six per cent over the same period, the fifth consecutive quarter where values have fallen. They are now 24 per cent below the peak of summer 2008.

“Other surveying firms have reported land values continuing to rise, but we think this is rather short-sighted because they have ignored the market for equipped farms. While bare land values have risen, there is patchiness in demand for farms. The best quality farms continue to be in demand and they are selling well, often above their asking price; but lower quality farms are struggling to sell and there are more examples of over-inflated asking prices being reduced,” said Giles Wordsworth, Head of Farm Agency at Smiths Gore.

The ‘equipped premium’, the difference between bare land values and the value including houses and buildings, has dropped dramatically to only £2,000 per acre, down from £2,600 per acre FARMLAND Bare agricultural land values rise, but farms fall earlier in 2009 and now well below the average of £3,200 per acre for 2008 and 2009.

“Equipped farms are becoming better value as the weaker demand for them has reduced their value compared with bare land. We expect bare land values to continue to rise while there is still weakness in the equipped farm market – so there could be even greater value to be had in the next few quarters. After then, as confidence returns to the wider economy, we expect demand from non-farmer buyers to strengthen which will support and lead to increases in the prices of equipped farms,” said Gerald FitzGerald, Head of Investment, Smiths Gore.