The Lincolnshire countryside may seem an unlikely place for investors, however there is growing interest in the region’s farmland as a form of secure investment. “A year ago UK farmland values reached record highs with demand driven by farming and non-farming purchasers alike,” says Brown & Co land agent  This e-mail address is being protected from spambots. You need JavaScript enabled to view it . “With current low interest rates, and despite the recent banking crisis, values have held firm.”

In the locality, generally land is trading between £4,000-£6,000/acre. Historically farming is a high cost and relatively low return industry. However, recent trends show a marked increase in interest in agricultural land and farms as an investment tool. “The finite nature of land and the relatively low amount of farmland traded has driven up prices with demand continually eclipsing supply,” explains Parry. “The recent credit crunch had an adverse, and well documented, effect on commercial and residential property, yet despite this farmland in the Midlands has performed well.

Significant capital growth over the last few years has seen much of the UK’s farmland increase in value by at least 30% since 2006.”

Food security is high on the political agenda, with the UK currently producing around 50% of what it consumes.

“We should not rely on cheap, or guaranteed, imports but start increasing our domestic production levels,” says Parry. “However, there is more to land than just farming. Food production still dominates, however, other uses such as energy production, planning potential and farm diversification should all be considered. EU funding is available to assist in many diversification projects.”

Property and Business consultants Brown & Co regularly advise farmers and nonfarming investors on land acquisitions, with many deals completed behind closed doors. “Land supply here in Lincolnshire is short and sourcing the right farm is not easy,” says Will Parry; “Many factors must be considered. “We have seen some extreme volatility associated with UK farming costs and returns over the last 18 months. Farming is a long-term investment. Key calculations relating to future prospects and farming methods play an important role when analysing an investment,” says Parry. “Farmland must be considered a business asset, just like commercial property or residential development projects.”

Looking to the future, he says; “Food security, future energy production and the need to house an expanding population will all dictate how we value and use land. It is a diminishing resource and increasingly energy demands will have an important role in this sector.”