“In September 2005 Acorn Rural Property Consultants (then the Taunton office of Carver Knowles) ran various articles that we are still reminded of from time to time that compared the price of agricultural land with the price of carpet and predicted that the average price of agricultural land would hit £10,000 per acre within 10 years. It is fair to say that everyone thought we were, to say the least, overly bullish in our predictions” says Mark Sanders of Acorn Rural Property Consultants.
According to Sanders, the average value of agricultural land 10 years ago was around £3,000 per acre and cheap carpet was about £2.50 per m2 which works out at about £10,000 per acre. He says the comparison is even more striking today than it was 10 years ago with productive agricultural land which will be needed to be able to continue to feed a growing population still getting scarcer as it continues to disappear underneath concrete and tarmac and is lost to the sea as part of the policy of “managed retreat” appearing exceptionally good value compared with the carpet on a living room floor.
“Even a bargain basement carpet is now about £4.00 per m2 (about £16,000 per acre) and, according to the latest rural land market survey published jointly by the Royal Institution of Chartered Surveyors (RICS) and the Royal Agricultural University in Cirencester (RAU), the average price of bare land has just exceeded £10,000 per acre for the first time and now stands at £10,067 per acre”, explains Sanders.
Sanders says that although it is gratifying to have proved the sceptics wrong, it is still the case that agricultural land is an undervalued asset and that opportunities exist for farmers and investors to benefit from increasing land values in the long term. “The next threshold is an average of £20,000 per acre and I would not be surprised to see that being achieved over the next 10 years” adds Sanders.
For further information or professional advice please contact Acorn Rural Property Consultants on 01884 214052.