Welsh farmland demand continued to outpace supply in the final six months of 2014, with land prices rising by 12.5 per cent over the year to reach over £8,438 per acre, according to the latest RICS/RAU Rural Land Market Survey H2 2014.

During H2 2014, the average cost of farmland rose to £10,067 per acre across England and Wales, hitting a record high for the eleventh consecutive period.

During the same period in Wales in 2013 an acre cost, on average, £7,500.

Despite anecdotal evidence that the recent fall in commodity prices is starting to temper the pace of demand, surveyors in Wales are expected to see prices to continue to rise over the next 12 months.

The increase in demand from ‘lifestyle’ buyers that began in H2 2013 continued throughout the whole of 2014 with this trend being noticed in Wales. This is adding to price pressures and is supporting expectations for further increases. Anecdotal evidence also indicates continued strong demand from investor purchasers in pursuit of larger parcels of prime land. Across Wales the supply of commercial farmland at best remained flat, while demand has continued to grow.

David Powell, managing director of Powells Chartered Surveyors, in Monmouth, said: “The latter half of 2014 saw little land or farms come to the market and those that did received modest interest, with no immediate offers or evidence of premium prices likely to be achieved for equipped farms.”