Farmers are beating the growing number of agricultural investors to British farmland – but at a cost, with the price of prime crop farms soaring by nearly 6% in three months, Savills has said.

The number of new prospective farmland buyers registering with the property consultancy soared by 60% in the first half of the year, Savills said, noting evidence of particularly strong interest from investors outside agriculture.

Nearly half the would-be buyers had £2m-5m to spend.

However, farmers maintained their lead in winning auctions, accounting for 62% of completed transactions, Savills said, adding that interest from non-farm buyers was "not yet transferring into deals".

Market squeeze

Nonetheless, farmers' victory was coming at a price, with the value of top-quality arable land in England rising by 5.8% to £5,850 an acre in the April-to-June quarter. The average British crop plots sold for £4,950 an acre, a rise of 3.9% in the period, and faster than the 0.8% price growth recorded in the first three months of the year. 

The extent of the priece inflation reflected a decline in the availability of land for sale in many areas. The supply of English land looked set to fall below 100,000 acres, half historic levels,

Indeed, it would be the lowest figure for at least six years, when uncertainty over a subsidy rejig depressed volumes.

"Much of this rise [in prices] is explained by the high ratio of buyers to sellers," Savills said.

Christopher Miles, director of the group's farm agency said: "One of the reasons why the market is different this year is because it's not just farmers driving it.

"They have been joined by investors so an extra element of competition has been introduced."

North south divide 

The buoyancy of the overall British market masked a weaker performance in Scotland, where prices "have remained under pressure", extending to a year a period of price stagnation.

Supplies of Scottish farmland up for sale had proved relatively rich, rising by 43% in the first half of the year, and of livestock farms which were being less prized by buyers.

"Average farmland value will remain relatively stable throughout the remainder of the year," Savills said.