As a capital asset things have turned out very well for farmland, and perhaps much better than anyone would have anticipated. But what does the future hold?
Farmland values are not exempt from threats – uncertainty of political change and the end of the current Single Payment Scheme in 2012 are both issues that may have an impact. Land ownership may, for example, become less enticing if there are changes to Agricultural Property Relief (APR) legislation that, in many circumstances, currently provides 100% relief from inheritance tax on farmland and residential property that is integral to the farming business.
Does Knight Frank predict that prices will continue to grow at the same rate this decade? Although farmland values in excess of £10,000/acre are certainly not inconceivable, caution should be used when estimating the future value of individual blocks of farmland.
Prices are likely to become more regionalised and not necessarily in line with the land’s agricultural productivity value as demand from other uses, such as renewable energy, increases.
Taking expert advice will be vital and valuers and land agents must consider all angles when analysing estate and farm resources for valuation or management purposes.
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