The price of an acre of Blighty continues its upward trajectory, prompting some to argue that green is the new gold.
If that sounds like a bit of a stretch consider this: Savills Agricultural Land Market Survey for 2011 shows that the price of prime agricultural land rose by 11% last year, on top of 7.2% the year before, pushing average prices to £5,250 per acre.
In some areas of England prices have risen to over £10,000 per acre, while in Scotland they’ve climbed to £7,000. An acre of prime arable land in East Anglia is now selling for up to £8,500 compared with around £2,000 in 2001.
Savills say there are a number of reasons for the strong growth. Wheat prices have soared to £185 per tonne, so returns have risen too. And in tough economic times farmland is regarded as “a tested store of value in inflationary environments” and this has boosted prices and demand.
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“Prices for good arable land in the east of the country went up by 18% last year, and we predict up to 20% for prime land in 2011,” says Christopher Miles, of Savills Farms and Estates team.
Who’s buying? The market attracts farmers, lifestyle buyers and investors. Significantly, over the past year investors registering to buy doubled, and they accounted for 31% of all buyers.
“Investors are either English, buying for IHT relief purposes, or high net worth international buyers wanting to place a portion of their portfolios in land,” says Christopher Miles.
Will the land boom continue? We think it will, if only because, as Mark Twain famously quipped, “they’ve stopped making it”.
As an investment, gold may be less cumbersome, of course, but you won’t have the chance to wear a tweed hat and stand in a field with an expensive shotgun looking like a country squire.
Download the FREE Agriculture and Farmland Investment Guide here
Download the FREE Agriculture and Farmland Investment Guide here
Download the FREE Agriculture and Farmland Investment Guide here
Source: Planet Property