Farmland shinier than gold to investors

The price of British farms will rise higher than any other class of real estate in Europe over the next four years, driven by investors betting on growth in global demand for food and looking for tax advantages, according to Oxford Economics, a consultancy spun off from Oxford University, working with property consultants Savills.

Their joint report predicts farmland values will rise another 37 per cent by 2016, beating forecast growth for gold, oil, government bonds and home and office space in London’s most exclusive neighbourhoods.

Savills director Alex Lawson told the Reuters news agency one factor was growing demand from developing countries for bread and potatoes.

He said: “Combined with that there are income tax, capital gains tax and inheritance tax advantages to putting your money in farmland.”

The Reuters report quoted Ian Bailey, head of rural research for Savills, saying: “UK farmland will be the top performing real estate in Europe and potentially the world. Supply is tight and demand is strong for arable crops.”

The British market is the most transparent and liquid in Europe, so investors like it, Bailey said.

The average value of British farmland has trebled over the past decade to about £6,000 pounds an acre – £10,000 and more for larger tracts of land and the high quality arable farms in east England.

n Carter Jonas has reported two sales to local buyers. Ashday Hall Farm and 75 acres, close to Southowram, Halifax, sold for “significantly in excess of the £650,000 guide price”. And the 700-acre Hoddlesden Estate, near Darwen, made up of moorland, tenanted farms, and housing, sold for “in the region of” £2m.