Consider Farmland For Investment
The price of farmland is on the increase in Britain, as the demand for wheat and biofuels increases. Given that it is still priced relatively low compared to much of Europe, farmland may be seen as an excellent investment opportunity.
It seems that while the value of property is falling, the value of land is rising rapidly.
Land agent Savills say that farmland in England has seen a 30% increase in the last six months, is 50% higher than a year ago, and is twice what it was worth three years ago.
House prices have seen a boom, but nothing like these sort of increases. Experts are forecasting a slowdown – but even that still means another 15% rise by the end of the year.
The thing about land, of course, is that there is only a finite amount, and demand has risen as commodity prices have increased. For example, the price of wheat has trebled in value in the past year. Thus the value of a wheat field is going to increase in value. The price of wheat, of course, has gone up as supply of food around the world is struggling to keep up with population increases.
Farmland is also attractive because there is pressure to produce crops for biofuels.
Another significant point is that agricultural land is not subject to inheritance tax, so buying it can represent a good investment to pass on to future generations.
Investors, struggling to come to grips with the fall-out from the credit crunch: falling house prices, falling stock markets, are now looking elsewhere for a safe financial haven. Prices of farmland often follow prices of gold and oil.
Investors in farmland see it is an excellent investment opportunity as constraints of supply and the pressure on price enhance its potential.
Currently British farmland is much cheaper than that in Europe. Price per acre in Britain is currently £4,400, whereas it is considerably higher in much of Europe. That means it is selling at a discount in Britain, making it a prime investment opportunity right now.
