Just as the housing market bubble bursts, along comes news that
farmland prices are rocketing. Farmland values jumped 30 per
cent over the last 12 months, and prices are up 130 per cent
since the early 1990s.
The
average price is edging close to £10,000 per hectare, with the
boom being fuelled by a new breed of investors – non-farmers.
“More
and more people are turned on by land as an investment
vehicle,” says Sue Steer, spokesperson on rural affairs for
the Royal Institution of Chartered Surveyors.
It
isn’t just downsizing City slickers – all sorts of people
are looking for a viable investment alternative to bricks and
mortar or the stockmarket.
A
contributory factory driving demand is relief from inheritance
tax. However, many non-farmers are buying neighbouring farmland
to protect the expensive residential property where they live.
Demand
is strong but sellers are few, meaning sales have declined to
their lowest level in years. As a region, South-East England has
the biggest proportion of non-farmer buyers – 62 per cent.
Surveyors believe prices will continue to increase during 2005
in spite of the weaker housing market and the prospect of
further interest rate prices.
Ambitious
housebuilding plans for the Home Counties announced by the
Government may be prompting speculative investment in farmland,
regardless of the strict planning regime controlling
development.
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