Salient to Investors:
Knight Frank said English rural land produced some of the best investment returns in Europe since 2007, appreciating by 51 percent versus a 19 percent rise got millionaires’ mansions in London and a loss for rest of the U.K. housing market.
Tim Atkinson at J.H. Walter is not expecting an alteration in the farmland market unless we see a general move in the financial markets to higher-risk assets – no one wants to sell land and there’s a weight of money waiting to get in.
Savills predicts values will increase by an additional 40 percent in the next 5 years versus 24 percent for luxury homes in London. Knight Frank expects a 5 percent gain in 2013 for farmland. Andrew Shirley at Knight Frank said prices double again over the next 5 years is not realistic, and expects steady, less spectacular growth.
Martin Robinson at Brooks Macdonald Funds said over the longer term, farmland will hold its own.
Farm buyers qualify for an inheritance tax break as long as the land is in use, another driver of prices.
Investment Property Databank said farm rental annual income is 2 percent of the land’s value versus average rental yields of 5.8 percent in the commercial property market. Andrew Dickins at Robin Jessop says from a rental point of view, it does not pay.
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