Farm land prices look set to keep on rising

 

05 11월, 17:06www.shropshirestar.com

Fundamentally, a growing population requires more food and more housing so while more land is required to produce the extra food, there is continued reduction in the productive land available due to development of greenfield sites to provide the housing and service infrastructure demanded by those additional people.

 

 Population

 

 So, the drive to produce more from a slowly diminishing land area is one of the contributing factors to rising farmland prices experienced over the last few years and with the turmoil in the banking sector, downturn in the economy and consequent low interest rate returns, it seems relatively easy to understand why investment in farmland is currently seen as an attractive proposition.

 

 The so-called BRIC countries of Brazil, Russia, India and China continue to aspire to a higher standard of living closer to western world standards which are mostly taken for granted.

 

 A recent Royal Institution of Chartered Surveyors publication reported population density in Mumbai at 31,700 per square kilometre compared with London at 5,900.

 

 Further, the average male life expectancy in Mumbai is currently 52.

 

 These figures are shocking in their own context but when the aspirations of Mumbai residents begin to be realised, a greater land area will be taken for residential purposes because more can afford an improved standard of living and as a consequence of rising population due to improved life expectancy.

 

 The reader may be now asking why this is relevant to Shropshire, but there are parallels to be drawn from our local situation.

 

 The Shropshire Council Core Strategy document has identified a need to house a growing population and consequently is obliged to incorporate within its Local Development Framework, appropriate sites for housing and the services demanded by the local populace.

 

 We can therefore expect to see built environment growth in our towns and villages locally and nationally and as land is taken up, and with more windfall cash gains from sales largely looking to be invested back into land, it is likely there will be localised ‘hotspots’ in terms of land value.

 

 It is difficult to predict where farm land prices will be in the future.

 

 But it seems clear there are sufficient drivers to maintain a general upward momentum, particularly in productive land areas.

 

 Alongside this background, technological advances in crop genetics and mechanical operations perspectives are likely to gain significant ground as the need to optimise and decrease the per capita land area required to maintain a reliable food supply becomes essential in the UK and globally.

 

 * Robert McCabe MRICS FAAV is a Partner of Nock Deighton Agricultural LLP and a Rural Chartered Surveyor