Values of pastureland have set a fresh record in England, boosted by the dairy revival and a return of lifestyle buyers, with arable acres only narrowly behind their 2008 peak, Savills has said.

Average pastureland values, in the first three months of the year, overhauled the peak of £4,400 an acre reached in 2008, the property consultancy said.

Vales were supported by the rebound in dairy prices, which near-doubled in international markets in the second half of last year, and the return of the small-time livestock farmers who virtually disappeared from the market during the economic downturn.

"This year we have seen a few lifestyle buyers come back, whereas last year it was only commercial interest," Ian Bailey, Savills' head of rural research, told Agrimoney.com.

'A bit of catch up' 

The improvement also reflected a long-term trend since the shake-up of the subsidy regime ditched differences between arable and grassland, which has seen pasture prices close some of their discount.

"Since the introduction of the single farm payment, [pasture] has played a bit of catch up," Mr Bailey said.

Nonetheless, prices of arable land ticked some 1% higher during the quarter to £5,000 an acre in England, near its 2008 peak.

The area of land marketed in Scotland, as some 5,000 acres, was too small to tell much of a trend, even though it was 16% higher than a year before, Savills said.

Debt factor 

Indeed, the supply for sale of UK farmland - which is being chased by investors holding £7.5bn – ended the quarter 10% higher, despite poor weather prompting a collapse of two-thirds in marketings in January.

"In February and March, marketings were good," Mr Bailey said.

However, they remained small by historical standards, and looked likely to remain so unless interest rate rises, as recovery takes hold, prompt a rash of sales to pay off debts.

"In the 1980s and 1990s, when interest rates were much higher, indebtedness accounted for 25-30% of the land we had for sale," he said.

"Now it is about 7-10%."

Savills, which manages or advises on more than 2m acres of land, stood by a forecast of farmland prices rising by 5-6% this year.