Foreign farm investment
Overseas investors are expected to buy up farmland in the South West in an ongoing trend which is pushing up prices to over £5,000 an acre.
The trend means English farmland has trebled in value over the past decade.
However, while foreign buyers of English farms 20 years ago were largely Dutch and Danes, followed, in the first few years of this century by an influx of Irish capital seeking investment, buyers these days are increasingly coming from the sub-continent and Far East – China and India.
There are also buyers from cash-strapped EU countries like Greece and Italy, where people with money are seeking greater fiscal security than at home.
Overseas sales have been limited to the eastern part of the region, principally Wiltshire and Dorset, but the foreign buyers are expected to start looking westward in the coming years.
Farmland prices have increased enormously over the past 10 years, rising up to threefold in parts of England, and viewed by international investors as a safer haven than the stock market – giving a modest annual return.
Smallholdings and modest-sized farms – of which the Westcountry has an abundance – are particularly attractive to Chinese investors.
"They want to buy social status and a piece of England," said James Prewett, of agents Knight Frank.
There are clear attractions in buying farmland, said Mike Townsend, regional director of Savills, based in Exeter.
"The safe-haven status British farmland has earned, combined with the various tax-saving advantages which may be open to a landowner, are encouraging a wide range of individuals to look at purchasing land," said Mr Townsend.
"Many farmers have watched their property's value double or even treble during the past few years and for some this represents a good opportunity to cash in on the strong market and take advantage of the relatively low value of some other investments classes."
The rolling arable acres of East Anglia and the East Midlands have proved most popular with overseas buyers, with prices pushing £8,000 an acre.
To the west of England, land value growth was more muted over the past 12 months, due to the predominance of livestock farms, where because of the smaller acreage, the residential element of the whole farm value continues to be relatively high.
Existing farmers continue to be the highest proportion of traders of land, representing over half of buyers and sellers, said Mr Townsend.
In terms of reasons to purchase, investment is given as the reason in 27% of all purchases, which is an increase on last year.
In Devon and Cornwall, the majority of sales are to farmers, often seeking to increase their land holdings by buying neighbouring farms.
"We're still selling to farmer buyers, and the situation hasn't changed for the past 18 months," said Jackie Chegwyn of agents Kivells, based in Holsworthy.
"It's certainly true that overseas buyers are purchasing land upcountry for investment – and that could well be heading this way."
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