Prices for farmland remain high in Kent, driven by increased demand for commercial farmland and a continued lack of supply.

Over the past six months to the start of August, 44 per cent more chartered surveyors reported a rise rather than a fall in demand for commercial farmland. This was up from 29 per cent in the previous half-year.

Demand for residential farmland also increased, with 25 per cent more surveyors reporting a rise than a fall, up from eight per cent in the second half of 2009. As well as investors, this can be attributed to some "lifestyle" buyers returning to the market.

Land prices increased in Kent, with arable land prices rising from £13,591 to £14,209 per hectare and pasture land prices also increasing.

Looking ahead, surveyors expect farmland prices to continue rising over the next 12 months due to the imbalance in supply and demand.

However, it is the commercial farmland sector which can expect to see the sharpest price rises, with 45 per cent more surveyors expecting prices to rise rather than fall.

Commenting, RICS south east director Amanda Gardiner said: "The demand for farmland shows no sign of abating and it continues to outpace supply.

"As in the previous survey, we are seeing demand from farmers who are keen to expand their production, particularly into neighbouring farms. Given the elevated prices at the farm gate, it seems farmers are willing to pay a premium in order to do so.

"Farmland continues to be viewed as 'recession-proof' and we are seeing UK and overseas investors purchasing commercial farms as an alternative form of investment which is outperforming other markets. These investors are competing with farmers and keeping prices high."