Farmland prices bucked a slump in property and land markets in the first half of 2008 and grew at the quickest rate since at least 1995, the Royal Institution of Chartered Surveyors (RICS) said on Monday.
However, there were some signs that the market may have peaked, with "City Slickers running scared" due to the global credit crunch and higher input prices making some farms unprofitable, the professional body said.
RICS said the weighted average price of arable and pasture land rose by 24 percent in the period as sharp commodity price rises encouraged farmers to expand production and investors to buy land.
It was the biggest six-month rise in the RICS rural market survey's 13-year history and reflected broader commodity price trends.
Global wheat prices rose to record highs earlier this year but have fallen back in recent months ahead of an expected record wheat crop.
In Britain they are about double where they were two years ago.
Arable land prices led the way up in the first half, rising by almost a third to a record 14,453 pounds ($28,680) per hectare, RICS said.
Even so, lifestyle buyers showed signs of retreating from the market.
The net balance of Chartered Surveyors reporting an increase in demand for residential farmland fell for the first time since 2005 from plus-50 percent to minus 3 percent while the balance of demand for non-residential farmland was at plus 65 percent.
A positive net balance implies that more respondents are seeing increases than decreases, in the underlying variable, while a negative net balance implies that more respondents are seeing decreases than increases.
"The credit crunch is putting an end to city expansion into the country as the precarious financial situation has made city slickers re-think their lifestyle priorities," RICS spokesman Julian Sayers said in a statement.
Average UK farmland prices have risen by almost half since June last year.
