Farm Land Values Set To Rise

After a whopping increase of 8 per cent in the value of farmland in 2010, countryside property experts are forecasting a further 6 per cent rise in 2011, and as much as 12 per cent ‘where there is purchaser competition’, according to Savills.

Besides the traditional buyers – farmers (funnily enough) – there is increasing interest from overseas bidders, including Italians, Indians, Germans and Chinese. Part of it is to do with strong commodity prices and lack of supply. But there is surely more to it than this.

Are they plotting a James Bond-style hideaway in rural Suffolk? Or maybe our lovely soil is actually stuffed full of some precious mineral that we’ve never discovered?

“In line with our research I think prices will continue rising next year, as every bit of bad news on the global economy or problems in the euro zone will give fresh impetus to investors looking for a home for their cash while interest rates remain low,” says Christopher Miles, head of Savills farm sales in the East. Not sure if they mean East of England or East like China and India. But he continues: “Strong commodity prices will also give strength to the investment rationale and to farmers looking to expand. Rising prices will be seen by some as an opportunity to offload poorer farms although we will see a marked variation in prices paid. Good commercial farms are the flavour of the moment and premiums will be achieved for 1000-acre plus units.”

I’d like to add that, although good commercial farms are the flavour of the moment, you’d need an almighty appetite to eat one. And it would leave a bit of an aftertaste, what with all the manure and slurry and feathers and whatnot.

Original comment can be found at The Property Prices Advisory

via Posterize