FARMLAND values continued to rise in the first quarter of the year – performing even better than gold.

Experts at Savills expect they will continue to increase to comfortably outstrip inflation by the end of the year.

Andrew Black, from the company’s York office, said the supply of farmland in the North was 33 per cent down during the first quarter.

While values of all land types had risen, the gap between the best and worst was widening.

He said: “Good quality land in high demand is now fetching up to £8,000 an acre on the back of strong demand, whilepoorer land in less popular locations is nearer £4,500 per acre.”

Sales agreed in the North suggested the market remained firm. The cold start to the year had delayed some marketing decisions, but there was nothing to suggest the volume would differ significantly to previous years.

Mr Black said: “Purchasers are looking on a national basis for well equipped farms of any size.”

Savills say the average rise in value for an acre of grade three arable land was one per cent during the first quarter – below the rate of inflation.

However, Ian Bailey, head of Savills rural research, said: “The fact that non-farmer buyers have started to reregister their interest in farmland, combined with a continuing low interest rate environment, leads us to see no reason why farmland values will not gain momentum and we fully expect annual growth to be in line with our forecasts of about five to six per cent.”

Cash buyers now represent more than 60 per cent of clients registered to buy farmland with Savills. Most are looking to purchase property of up to 500 acres.