Savills’ Global Farmland Index recorded an average annualised growth of 13 per cent since 2002 and 7.5 per cent over the past 10 years. Ian Bailey, Savills head of agricultural research, said: “While pressure on commodity prices is the common theme across the global downturn in values over the past five years, these have shown less volatility than other commodities, being significantly less affected by the global financial crisis in 2008. Increased food production and competitive land use continue to drive demand for this asset, securing its status as an attractive longer term investment.”
In the UK, Mr Bailey said the average value of farmland was likely to remain under pressure in the short-term due to low commodity prices, despite the fall in output costs and increased subsidy receipts due to the weak value of sterling. “The price pressure will be tempered by a continued low supply, which will help underpin prices in the medium to long-term,” he said “Additionally, we expect increasing rollover and general economic improvement in the medium-term to support demand and therefore prices.” Mr Bailey said he expected average UK values to increase by 5.5 per cent over the next five years, although he predicted local variations and a widening price gap between the best and poorest land.