THE rate of growth of farmland prices in the South West has trebled, reaching the highest levels in history.

The latest RICS Rural Land Market Survey shows prices going up countrywide by 18% in the second half of 2006 compared to 6% in the first half of the year.

Land prices in the South West increased by 14% in the second half of the year compared to a 6% rise in the first half of the year. The average price for arable land grows to £3,500 an acre (£8,649 per hectare) and pasture rose to £3100 an acre (£7,660 per hectare).

Competition between city "lifestyle" buyers and farmers, keen to expand production and exploit higher commodity prices has resulted in demand rising at the fastest pace in the history of the RICS survey.

Demand was currently far exceeding supply of available land, said Alex Rew, head of the farms department at Stags of Exeter. Demand for residential and non-residential land gathered momentum in the second half of the year whilst supply diminished.

The figures highlighted the growth in the demand and price for farms and land throughout the region, said Mr Rew.

The company saw 83% of their farm purchasers being non-farmers. "We also had prices reaching record levels both in the sale of farms and land lots," he said. "The market place for land lots in particular is much wider than it used to be and it is now quite common place for plots of land to be bought by purchasers living over 100 plus away.

"This is often for investment or lifestyle reasons. Also buyers will try to locate a parcel of land and then buy a house near it rather than the other way round due to the scarcity of available land."

Cowley Barton, near Exeter, a 274-acre mixed farm, sold to a London-based investment fund following competition from other non-farming buyers from outside the region as well as both farmer purchasers within and outside the South West.

Mincombe Farm, Sidbury, Sidmouth, Devon, sold in excess of the guide price of £750,000. This small farm set in the Roncombe Valley, near Sidbury, close to the south-coast, included a three bedroom flint-stone bungalow with agricultural tie, farm building and 126 acres including about 20 acres of woodland.

Again interest was attracted from both the lifestyle and farming purchasers although in this case the farm was sold to two farming buyers, one local and one within the county.

North of Tiverton, Pylemoor Farm, Washfield, with 100 acres, was split into two, with the main bulk of the farmland being picked up by a local property owner.

"At the start of the year we have also seen more private trading than normal with three properties being sold discreetly behind the scenes," said Mr Rew. "These include a substantial farm/estate with three dwellings and in excess of 220 acres situated in the Exe Valley."