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Average farmland prices rose by 33.2% in the year to September 2007, revealing the second consecutive quarter of record annual growth.
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Prices rose by nearly 10% in the three months to September 2007
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Average farmland values (all types) hit £4,178 per acre in the third quarter, up from £3,137 a year earlier
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Demand from lifestyle purchasers (non-faming buyers) rises 25% in volume terms (acres) but by over 50% in value terms over one year
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15% of all UK farmland is now bought by overseas buyers - with the Irish being joined by northern Europeans and Russian buyers
UK estate agents Knight Frank says that over the past 18 months the price of farmland has risen steadily on the back of strong demand and restricted supply. The rate of price growth has increased over recent months, with the annualised rate now hitting 33.2% - the highest rate since 1977 (when price growth briefly hit 40%).
The rate of growth has increased rapidly with a rise of almost 10% recorded in the three months to September alone. The market has remained strong despite the increasing cost of debt, global financial uncertainty and outbreaks of Foot and Mouth disease and Blue Tongue.
Clive Hopkins, Head of Farms and Estates at Knight Frank, comments:
"Supply has failed to match rising demand by a significant margin for a long period. Whilst demand (applicants) rose by almost 12% on a year on year basis to September 2007, supply only rose by 3% which is down on the previous quarters figure of 8%.
The number of sales, on an acreage basis, completed in Q3 2007 was 2.5% higher relative to Q3 2006. This pent up demand, coupled with a reduction in supply will increase the scarcity of farm land on the market, which is expected to drive value growth further."
Finfacts Comment: The public welfare scheme known as the EU Common Agricultural Policy provides direct payments to farmers and there is no ceiling. The loose criteria for payment effectively means that a landowner can receive payment for just watching the grass grow.
Beef processor Larry Goodman is the biggest individual Irish recipient and he collects more than €10,000 each week in cash payments.
The farm dole is also available to wealthy capitalists who aspire to be "lifestyle" farmers.
In Ireland, the corrupt land rezoning system, which creates an artificial scarcity of land in a country that is 4% urbanised, gives some farmers a double whammy at the expense of taxpayers and new homeowners.
The proceeds from the millions from the sales of development land and land for roadbuilding (Farmers to get quarter of �18.5bn of taxpayers' money to be spent on Irish main roads over next decade) goes mainly into UK commercial property and land.
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