Investing in land is a good bet

Demand for land is continuing to rise despite a significant downturn in the UK’s property market, according to the specialist agricultural and rural business team at Withy King Solicitors.

Thanks to a bumper harvest in 2007, farmers have had the cash to invest in land, pushing prices up from £3,500 per acre in 2006 to £8,000 per acre earlier this year. Although land prices have dropped since then in the wake of the struggling economy, they are holding steady at about £5,500 per acre and demand for agricultural land remains strong.

"Land is an excellent investment, particularly in the current economic climate where residential, commercial and retail properties are struggling to fetch anything like the prices they once were," commented Angus Williams, head of the agricultural and rural business team at Withy King, which has offices in Oxfordshire, Wiltshire and Somerset. "Agricultural land is becoming scarcer and therefore more valuable as the global demand for food increases. There are also growing demands on land to support long-term development plans, particularly around urban areas where land is needed for additional housing, business parks, retail centres and other amenities, as well as conservation projects and the generation of crops for bio fuels.

"Farmers are still the major buyers and sellers of land, recognising the long-term investment value as well as the short-to-medium term gains to be had, for example by producing traditional crops, bio fuels or entering the agri-environmental sectors which are part and parcel of everyday farming. These schemes and the continued availability of Agricultural Property Relief have helped make land very attractive for a variety of uses," said Angus Williams.

With land becoming an increasingly attractive bet for investors keen to steer away from the turmoil of the financial markets, now is an excellent time for potential sellers to get their houses in order. Title deeds, option agreements and planning permissions are just a few of the issues which will need to be dealt with by farmers looking to maximise the opportunities and achieve the best possible returns.