Is Farmland The Next Property Boom Sector?
As the UK housing market continues to fall away there are signs that the value of UK farmland will continue to push higher and higher in the short term. Estate agent Savills has reported that the price of English farmland had increased by over 30% since December 2007, bringing a 50% gain over the last 12 months. So what is happening?
As with any investment, farmland is valued on the investment yields which it can support, the equivalent of rent in the housing market. At the moment the best yields are available on wheat fields as the price of the commodity pushes higher and higher in the worldwide markets. Some blame bio-fuels, some blame increased demand but whatever the reason it is having a massive impact upon the price of farmland.
Those who assume that the growth period is over may well be surprised to learn that experts forecast a further 15% growth in farmland prices over the remainder of 2008, an excellent return at any time, never mind in the current economic situation. As the bio-fuels row rages on there is the possibility of further upward movement in farmland prices over the next couple of years.
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