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Written by David Lewis
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Wednesday, 23 February 2011 09:01 |
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Farmland and forestry have topped the UK investment performance league over last 3-years
According to Savills Rural Research, the proportion of investment motivated purchasers more than doubled to 31 per cent last year, suggesting that investors have woken up to the benefits of holding farmland. Also the number of new applicant registrations increased by more than 45 per cent; providing further evidence of the current interest in farmland as a strong performing asset. Ian Bailey head of Savills Rural Research says, "In the past 15 years let and in-hand land has outperformed all assets except residential property, but during the past three years farming and forestry have topped the investment performance league in the UK."
However, with the supply of farmland across Great Britain in an historical context remaining tight at 158,000 acres, values could only move one-way. Savills Farmland Value Survey shows the average value of grade 3 arable land for Great Britain increased by 11 per cent in 2010 to £5,250 per acre. This average figure masked some exceptional prices paid, which in some cases reached well over £10,000 in England and over £7,000 per acre in Scotland. Demand was particularly strong for good quality commercial farmland and so unsurprisingly the highest rates of growth were recorded down the eastern side of England where a number of larger arable units traded. Alex Lawson, Director of Savills comments, "Anecdotal evidence suggests there was significant activity 'off market' for large commercial farms and estates last year, which was driven mainly by vendors' requirements for privacy, especially in the case of top-end estates." In the wake of an improved sentiment for prime country property and predictions for a relatively robust run of commodity prices, Savills has revised its baseline forecast for average farmland values upwards to 9.7 per cent growth for this year. |
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Last Updated on Wednesday, 23 February 2011 09:08 |