Farmland prices in England rose on average by 0.4% in the first three months of 2012, following drops of almost 1% in each of the final two quarters of last year, according to the latest index from Knight Frank.

The average value of agricultural land is now £6,073 per acre, just £83 below the record high of £6,156 per acre reached in the summer of 2011.

‘We predicted that the slight drop in the value of land in the second half of 2011 was not the start of a more significant trend. The upturn in values so far this year bears this out and we expect further growth of about 6% during the rest of the year. Despite the on going economic uncertainty farmland is still considered a solid, tangible safe-haven investment,’ said Andrew Shirley, head of rural research at Knight Frank.

Tom Raynham of Knight Frank’s farm sales team said that he has noticed an upturn in the number of investors attracted to the asset class. ‘So far we haven’t seen any activity from institutional investors, but specialist funds and private and corporate investors are showing a lot more interest. A number have retained us to find suitable investments for them,’ he said.

‘As ever, the biggest problem is satisfying the demand. We have a number of good farms coming to the market, but so far this year there has been very little increase in the availability of quality land. This imbalance will help to ensure prices remain firm,’ he added.