Agricultural investment looks good in the UK
UK farmland is becoming more and more attractive to certain investors as they seek to take advantage of ‘safe investments’ that deliver solid returns. The market in 2011 has already started to boom and experts are expecting interest to increase.
A spokesman for a leading property consultancy indicated that UK farmland is currently seeing return yields of around 17% which explains why so many people see this as a safe investment during the current economic downturn. He said, “There is interest from a wide range of people who look at land as an investment. UK farmland, which has a relatively benign and stable climate compared to some parts of the world, is becoming the flavour of the month.”
Figures released by Knight Frank earlier this month indicated that English farmland values increased by 13% from the beginning of 2010 to the end of the year. If you compare this with residential property, prices in London rose by 10% and large country houses only experienced a growth of around 3%. Knight Frank also released data showing that the average price of farmland in the UK is currently £5,803 per acre which is marginally down from its peak.
People involved in sales understand that prices are driven by lack of supply and lack of quality with one head of farm sales at Knight Frank Tom Raynham commenting, “Farmland prices are being driven by lack of supply and lack of quality. When good quality farms come on to the market they sell well, whether that be lifestyle quality or quality of land.
"There are some good properties coming to the market in spring 2011 and due to the lack of supply these will hopefully provide some good activity at the beginning of the year to drive the market forward”
Early projected figures seem to suggest that 2011 will see the market continue to grow and by 2012 we may be experiencing growth in excess of 16% which makes investment now even more attractive.
If you would like to chat with us about investing in UK farmland then please do not hesitate to get in touch with us.
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