'Townies' move in on farmland

WEALTHY 'townies' who relocate to the countryside are part of a new breed of investors snapping up farmland and forcing up prices, according figures published today.

The average price of farmland is edging close to £10,000 per hectare (2.4 acres), with price rises rivalling those of the residential sector in the past year, the latest rural land survey by the Royal Institution of Chartered Surveyors (RICS) shows.

The RICS found that overall prices have risen by up to 30% in 12 months and 130% since the early 1990s.

Although land prices continue to rise, this has not weakened demand as non-farming buyers look to farmland as a source of investment potential, the RICS said.

One possible reason could be relief from inheritance tax, but a more likely explanation is that non-farmers are buying neighbouring farmland to protect the expensive residential property they have purchased.

Demand is strong but sellers are few, so sales have declined to their lowest level recorded by the survey.

Despite the sale of farmland declining noticeably over the But surveyors are confident that farmland prices will continue to rise in the next 12 months.

RICS spokeswoman Sue Steer said: 'More and more people are being turned on by land as an investment. These are not just downshifting city slickers. but also those looking for a viable investment alternative to bricks and mortar or the stock market.'