RESIDENTIAL values of farmland in the West Midlands have risen by an average of 15 per cent since February last year.

According to Anthony Mayell, a partner in Fisher German's Evesham office, this has encouraged the letting of farms which would otherwise have sold as commercially viable units, and helped push the value of some bare land above £3,000 an acre.

"Despite the crisis in farming," he said, "demand remains strong for bare land from farmers who still regard land as the soundest investment. They may have sold their farm elsewhere and bought a farm in the Midlands because it offered a better investment potential."

Mr Mayell said 200 acres of bare land in Worcestershire with a mix of IACS arable and pastureland recently sold for almost £3,000 and acre.

A commercial block of less versatile Worcestershire arable land barely achieved £2,000 an acre.

Tied dwellings, he said, appealed to farmers who could negotiate a realistic price without tying up capital in an expensive farmhouse.

The sale of 220 acres at Cleeve Prior proved how valuable agriculturally tied farms in a decent location had become, selling for well above the £650,000 guide price.

Some residential farms with character farmhouses had created their own niche market, enabling non-farming buyers to shelter capital in additional farmland, providing them with a tax haven.

Mr Mayell pointed out: "As farmers reduce their costs and generate income from non-farming sources, fewer commercial farms are reaching the market.

"Residential farms with 250 acres plus have topped £1m most strikingly in Gloucestershire where land values have reached £6,000 per acre or more. This small sector is recession proof and unlikely to react to changing interest rates in 2003."

Location and quality of land, he said, were becoming more critical to a successful sale.