Farmers looking for a shelter from the storm of recession are increasingly buying more land, according to experts. Over the last five years, the average value of agricultural land has risen 135 per cent, according to Richard Binning of Savills rural agency team in Oxford.

He said: “This huge increase has been market-driven and there have been some notable changes in buyer profile.

“During 2008, the percentage of ‘non farming lifestyle buyers’ in the market fell to 23 per cent from 33 per cent the year before which, we think, is a clear indication of the impact the global recession was having on the farmland market.

“By contrast, half the farmland purchased in 2008 went to commercial working farmers, often neighbours wanting to expand.

“Overseas buyers, particularly Europeans, are also entering the market in force and they will continue to be a significant and important source of demand because of the weak performance of sterling against other currencies.”

Statistics show that, in the last quarter of 2008, average land prices fell by nearly five per cent, although the overall annual growth in 2008 was still significant at 21 per cent.

Values tailed off in the second half of the year but this was more to do with pressure on farm profits, due to falling commodity prices and increased input costs, than to recessionary pressures. However, the current economic climate affects general economic confidence, and will have some bearing on the decisions of prospective purchasers.

“There are some significant elements which point to a positive outlook this year,” added Mr Binning.

“Low interest rates and a bullish wheat price forecast, coupled with reduced input costs, are likely to bring some respite to farm incomes and a weak pound will provide a boost to UK exports, EU subsidies and overseas buyers.”

“These positive factors are balanced by the overall global recession, reducing ‘lifestyle’ purchaser premiums, so land values will be generally stable in 2009.

“No two pieces of land are the same but, for commercial blocks of arable land, we are predicting average prices of £5,000 to £5,500 per acre in this area, perhaps a little softer in the first six months, but more positive in the second half, especially if commodity prices for this year’s harvest bounce back.”

The property market as a whole has seen a ‘flight to quality’, with the downturn impacting more severely on the poorer quality properties, and this is equally true for farms and agricultural land.

Experts anticipate a more distinct, two-tier market, with good quality, well equipped, well located and commercially viable farms demanding higher prices.

This trend will, in turn, continue to encourage buyers to invest in farmland — the proportion of investor buyers was up from 16 per cent to 24 per cent last year.

The findings are backed up by research from Cassington-based Smiths Gore, which shows land prices holding firm.

Giles Wordsworth, head of farm agency, said: “The asking price of bare farmland rose to an average of £5,700 per acre in the fourth quarter of 2008, up two per cent on the average of £5,500 in the third quarter, and eight per cent since the start of the year.”

Mr Wordsworth believes the outlook for this year remains optimistic.

He added: “Bare land prices have not yet been significantly affected by the residential market, the credit crunch, or the wider economic downturn.

“Many farmers remain optimistic about the core business of farming and lending to farming for agricultural land purchases should continue.

“Banks and other lenders still view farming as a secure, well capitalised sector and agricultural land is still seen as the preferred safe investment when money on deposit is providing such small returns.

“The weakening pound may also encourage overseas investors to the UK. We expect bare land prices to continue to rise and prices for equipped farms may also rise, as they return to their long-term upward trend.”