“Agricultural land in the UK is a very valuable commodity – it’s total of 39.8 million acres is currently valued at a healthy £185.7 billion.”
Agricultural land in the UK is a very valuable commodity – it’s total of 39.8 million acres is currently valued at a healthy £185.7 billion. Despite the hurricane of financial and political uncertainty ensued during the run-up and the resulting aftermath of Britain’s decision to leave the EU, UK farmland has proved to be extremely resilient and has performed well.
For instance, UK farmland has performed very similarly to what it did back in 2015 where we have seen a very minor year-on year retraction of just 3%. However, the current pressure on average farmland values should be set in context against the long term performance. The bigger picture is far more telling when we note that UK farmland and woodland has increased by 149% over the past 10 years. The average value of bare agricultural land in England alone has increased by 97% over the last decade, with 16% being achieved over the last five years.
Interestingly enough, UK farmland is receiving more investment from the city and individual private investors than what is being invested by actual farmers. Although yields can be typically as low as 2%, farmland is proving a very popular asset because it can be an investment and a lifestyle purchase. As a lifestyle purchase, outside buyers are attracted by the prospect of living a quieter life in an attractive and peaceful location, and investment capital is attracted by the fact there are plenty of tax breaks, and food security is also a major factor that adds value to a plot of land that is producing a commodity for a domestic and global food market that is being driven by an ever increasing disparity between the demand for food and the actual available supply of food.