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FARMLAND prices in the North East have reached a two-year high, a new survey shows.

The Royal Institution of Chartered Surveyors’ (RICS) Rural Land Market Survey shows that arable farmland in the region increased to £14,209 per hectare in the last half of 2010, up from £13,519, while pasture farmland stabilised at £9,946.

Chartered surveyors say the growth is in part due to commercial farmers being keen to expand production to capitalise on elevated commodity prices. And in Northumberland there have been examples of farmers selling off houses and buildings to raise the capital for a larger unit, and someone moving from Leeds to buy a 55-acre farm for various diversification and tourism projects.

RICS North East Chairman David Coulson said: “There is a shortage of both farms and bare land at present, and in 2011 supply is not expected to meet demand so it is almost inevitable the prices will continue to rise.”