Why is UK agricultural land a good investment?

Over the last 20 years farm land has steadily increased in value. Prices can vary widely depending on land type, quality, location and buyer competition. The rise of “Investment grade” arable land has seen an even sharper increase in value, regularly achieving £9,000 and £10,000/acre, or significantly more in some cases. Blocks of at least 1,000 acres often attract a premium due to their relative scarcity.

The population driven, global demand for food has propelled agricultural property prices to their current record high with no signs of it falling. Private investors, many with no previous experience in farming, are excited by the benefits of agricultural land ownership. For investors determined to keep wealth in the family, agricultural land can attract valuable reliefs from capital gains tax (CGT) and inheritance tax (IHT).  Currently agricultural land and woodland can be 100% IHT free – an important factor when planning for the future.

What drives the market?

Supply and demand normally drives the price of an asset and agricultural land is no different. Other factors such as political instability, equity volatility, and also the tax reliefs available on rented land, contribute to make farmland ownership an attractive option. Agricultural support payments cushion farmers from commodity market volatility and allow businesses to cope with periods of low prices.

Interested in investment?

CLM has significant experience in the land investment sector buying, selling and managing agricultural property throughout the UK. Purchases and Sales have been conducted for private and investment farmers either from the open market or via discrete off-market deals. We offer practical advice to purchasers to help them maximise the returns and capital value of their agricultural investments. This may include negotiating a purchase and lease back arrangement or securing land and then identifying suitable tenants. We can provide an on-going management service to ensure property is well cared for and rental incomes remain competitive. And when the time comes, we can ensure the land sale achieves its full sale potential.