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The latest RICS/RAU Rural Land Market Survey H2 2013 has revealed that farmland prices hit another record high during the final six months of 2013.

They rose 15% in 12 months. This meant that during the second half of last year, the average cost of farmland rose to £7754 per acre across England and Wales, hitting a record high for the ninth consecutive period. The cost of land is now 14.3% higher than during the same period in 2012 when an acre cost, on average, just under £6800.

Continued strong demand from farmers looking to expand their operations coupled with limited land availability is behind the growth in prices.

What impact the recent flooding will have on land prices in rural areas is as yet unclear.

RICS Head of UK Policy Jeremy Blackburn said: "Farmland price growth has been enormous in recent years. With commodity prices now having remained strong for some time, many farmers have been looking to expand their businesses and, with so little actually coming up for sale, competition for good land is fierce.

"Although, with floods having devastated large swathes of southern England, what remains to be seen is the impact this has on the market in these areas and further afield. It will not be surprising to see this have a negative effect on transactions. In fact, a lot of the best quality and highest value agricultural land in the UK is located close to rivers and on floodplains so this too could potentially have an impact on food production."

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