NORTHERN England saw the highest rise in farmland prices of any UK region between 2009 and 2010, latest figures have revealed.

A study by property adviser Savills showed that prices per acre across the north, including Yorkshire, rose by 24% during that time against 18% for Eastern England and 16% in Wales.

Based on improved confidence in prime country property and commodity prices, Savills has revised its forecast for average farmland value growth to 9.7% in 2011.

The latest research also shows how farming and forestry investments in the UK have outperformed all others over the last three years.

Andrew Black, director at Savills in Yorkshire, said: “Arable land values locally have increased by 13%, which exceeds the national average and reflects a renewed optimism within the cereals sector.

“This follows the rise in cereal prices and a distinct shortage of farmland supply in the area”.

Mr Black said: “Investors are attracted by the taxation advantages of land ownership as well as farmland investment being a perceived safe way to hedge against further rises in commodity prices.

Ian Bailey, head of Savills rural research, added: “In the past 15 years, let and in-hand land has outperformed all assets except residential property – but during the past three years farming and forestry have topped the investment performance league in the UK.”

Savills’ Farmland Value Survey shows the average value of grade 3 arable land for Great Britain increased by 11% in 2010 to £5,250 per acre. This average figure masked some exceptional prices paid, which in some cases reached well over £10,000 in England and over £7,000 per acre in Scotland.

In 2010, the proportion of Savills investment motivated purchasers of agricultural property more than doubled to 31% – suggesting investors have woken up to the benefits of holding farmland.

Also the number of new applicant registrations with Savills increased by more than 45% – providing further evidence of the current interest in farmland as a strong performing asset.