FARMLAND prices in the North-East have risen faster than anywhere else in the country.

A combination of lifestyle buyers and mostly arable farmers - including from Denmark and Ireland - are largely responsible for the 52 per cent surge in the first half of the year.

And, according to the annual survey by the Royal Institute of Chartered Surveyors (RICS), prices in Yorkshire and Humberside rose by 22 per cent.

David Coulson, of Broadley and Coulson of Crook, is the RICS North-East rural spokesman and said demand was still outstripping supply.

He said: "Farmers are showing keen interest in buying whole farms and blocks of land. The increase in arable prices and the biofuel prospects has helped to lift demand."

In Yorkshire and Humberside arable farmers, buoyed by the huge rise in grain prices, are buying more land.

Christopher Orme of Strutt & Parker, Harrogate, said more land had also come on to the market, attracting interest from Danish and Irish farmers.

Andrew Fallows of Carter Jonas, York, said larger commercial units had met strong interest from foreign buyers as well as large farming businesses.

The foreign farmers are investing here as land is still among the cheapest in Europe.

RICS says the combination of different buyers has pushed prices to unprecedented levels.

Londoners, armed with record city bonuses have continued to drive demand for residential farmland.

In the North-East the average price for arable land rose to £9,267 per hecatre (£3,750/acre) and pasture fetched £7,413 per hectare (£3,000/acre).

Yorkshire and Humberside prices averaged £9,205/ha (£3,725/acre) for arable and £7,413/ha (£3,000/acre) for pasture.

Sue Steer, RICS national spokesperson, said: "Rising commodity prices and increased interest in biofuels have resulted in a bit of a feeding frenzy for farmland as farmers compete with investors, foreign farmers and lifestyle buyers for properties.

"Although the availability of land increased fractionally in the last half year, supply remains constrained and insufficient to satisfy the appetites of buyers.