03 January, 2012

The capital value of UK farm land will grow quicker than many other property markets including residential housing and London office spaces, according to Savills rural research.

In a Property Wire report, the global property group says that the average value of farm land will rise by 36 per cent over the next five years, with many expecting a five per cent growth in 2012 alone.

Its predictions follow a strong growth in average farm land values over the last five years - up 138 per cent. This is significantly more than the average values seen in residential and commercial property assets.

However, it is only the best quality farm land that is likely to increase its value dramatically, says Alex Lawson, director of Savills Farms and Estates.

Mr Lawson explained that Savills' expectations of a 9.7 per cent increase in average farm land value for 2011 were pulled down by the quality of land seen in some regions. Therefore the actual rise was muted, at just 5.7 per cent.

"This average however, masks the strong demand for the best arable land which recorded growth of 8.9 per cent," he said, according to IBTimes.com.

Going forward into 2012, Mr Lawson expects land values to at least maintain their value, if not rise.

"Against a backdrop of economic uncertainty the farmland market is likely to become more diverse in terms of performance, we expect the continuing tightened supply and low interest rates to maintain values for all but the worst quality land," he added.

Source: Vertical Leap