Demand for agricultural land is soaring and 2011 could see prices soar even further according to estate agents and leading auctioneers. Halls estate agents, who are based around Wales and Shropshire, have sold 3,319 acres of land with an aggregate value of around £25million during 2010. It was a very successful and thriving year for farmland.
Accommodation land continues to be in great demand and good quality arable land reached between £6,000 and £11,000 per acre during 2010. A spokesman for Halls said that they were confident that 2011 would be a great year for farmland after an exceptional 2010. Land is viewed by a lot of people as a secure investment and some see it as a potential tax saving as they want Agricultural Property Relief from Inheritance Tax in the future.
Surprisingly the driving force is the farmers. They want to expand and are encouraged by the higher commodity prices but see the lower bank interest rates as a bonus too. However although it seems that more people are interested in purchasing farmland there is a scarce supply available. This has fuelled competition but farmers are looking to the future with confidence.
Some predict that by 2012 agricultural land prices could be double what their 2010 value is. It seems that farmland has outperformed the FTSE 100 and even some prime London property. Between 1995 and 2010 agricultural land prices more than doubled and therefore the predicted doubling of farmland between 2010 and 2012 could occur. According to research because the global cereal stocks are low and farmland is very limited, prices will continue to rise in the future.
In 2010 agricultural land rose on average 11%, 2011 is expected to rise to 9% but 2012 is predicted as growing by 16.2%, a phenomenal amount. Many predict farmland investment as being as good as investing in gold.