According to a report recently published by Strutt & Parker – UK property consultants – the demand for farmland in Great Britain has increased significantly since we reported the significant increase at the beginning of this year.
The growth of investors’ interest, in its turn, resulted in a rise in farmland prices. Since the beginning of 2010, UK land values have increased by 18%, from £5,260 per acre in January to £6,223 in May.
Commenting on the findings, Mr. Evans of Strutt & Parker said that the prices have seen the most growth in the past 2 months.
Strutt & Parker’s report is supported by the forecast made by Savills, which states that farmland prices will increase by another 5-6% until 2015.
In the opinion of Mr. Miles of Savills the prices are growing constantly as the demand from buyers increases.
This year, traditional buyers of land in the UK – farmers – have been joined by British and foreign investors. Even though the average yield from UK land remains at as low as 2%, this type of asset is considered a safe investment, which might also bring capital gains and tax benefits.
Higher yields can be achieved when purchasing strategic development land. This is a plot of land which has no planning permission but is located near existing housing, development sites and in areas where there is a shortage of housing. This land is generally bought with the intention of gaining planning permission to sell on to a developer at a much higher price – some investors have reported yields as high as 400-500%.