Farmland is soaring in price and is now outstripping shares, and even London property prices, with the average price rocketing 15% in 2014. The average price per acre in the UK is now at a record high of £7,925, according to a report by Knight Frank. This compares to an average of £6,891 a year ago and many of those purchasing the land are not farmers but investors. However, the average price per acre of farmland in Wales is the highest in the UK at £8,625 having risen 19% over the past year, according to the Royal Institute of Chartered Surveyors.
Why are investors so interested in farmland? Well one reason is the generous tax breaks available on land. Agricultural relief allows land and agricultural buildings to be passed on to the next generation free of inheritance tax as part of a Will, or even as a gift during the owner’s lifetime. However, there are stipulations. If the land is tenanted, the assets must have been used for agricultural purposes for the seven years immediately preceding the transfer or, if used by the owner or a company controlled by them or their spouse, then this period falls to 2 years. Whilst growing crops, rearing livestock or even breeding racehorses qualifies, if the land has just been used for leisure purposes such as keeping riding horses or pet donkeys, then it would be liable for the tax. Another appeal of land investment, of course, is the finite amount available.
Further good growth in farmland prices are forecast for this year and thereafter. Savills predicts 8% annual growth for the next five years for top quality land. However, cautious investors may hold out to see the result of May’s general election as, depending on the result, this could possibly result in tax reliefs being removed.
If you are looking to buy a farm, invest in farmland or just move to West Wales or buy a holiday cottage here, we at West Wales Property Finders would be delighted to help you. Around 90% of the properties we find for our clients never come to the open market so, with our help, you really do get the pick of the crop. Contact us on 01834 862816, carol@westwalespropertyfinders.co.uk or check out our website at www.westwalespropertyfinders.co.uk
