Rated above bonds, cash and property investments, farmland in its current standing is being outlined as “the best low-risk investment over the next decade.” MoneyWeek magazine have singled-out ‘Britain’s greener pastures’ in the busy and bustling world of investment management as actually being Britain’s Green Pastures. And according to a recent report from Savills, there is almost £7.5bn in cash waiting to buy farms and regional estates throughout the UK in response to low cash and gilt yields. This has the potential effects of increasing prices by half in just three years according to MoneyWeek – which is no mean feat.
Now, if you are like most of us then the fast and furious world of investment may just wiz by in a blink of an eye at a jargon-fuelled blur incomprehensible to the strongest grips of concentration. But after sieving through the chunks of nomenclature, kneading some of the more convoluted statements and by bringing the key ingredients forward to stand for themselves, then it soon becomes plain to see that there is definitely something wholesome to be had here.
Put it this way, due to their recent bad-press over the past ten years or so, a general lack of interest from ‘new-buyers’ and a scare easy standing from potential investors, farms are cheap. Not only have they become financially viable but they are also ‘sustainable’ investments too: there is income to be had from the crops grown and produced on the land; EU subsidies are set in place for the next five-to-ten years or so; and then finally there are sizeable tax breaks – including breaks on inheritance tax, reclaimable VAT and even initiatives for budding entrepreneurs!
Okay, before we rear off this quite idyllic country road and find ourselves toe-to-toe with gaz-guzzling red sports cars then there is a word of caution that should be added. Although farms are cheap, investment isn’t easy. It requires a thick-skin, hard head and lots and lots of craft(y) work. The reality for this scale of investment is not all wellington boots and robins perching spades. Instead what lies ahead is a strict route and keen sense for the ‘right of way’ privileges that farmers are entitled to. For instance, one of the driving factors for investing in arable land (whether it be deemed ‘right’) is not the soil-rich country lifestyle that accompanies it, instead it is, quite simply, a much-employed way to protect existing capital from biting taxes.
Inheritance tax, for example, no longer becomes applicable for a person who owns agricultural property and farms it on a day-to-day basis for a minimum of two years. The proprietor of the property is free to pass their plump little cash-cow on to heirs without having the tax man come knocking at the door with his sharp set of carving knifes. The bare bones of it stands like this: the Government wants to encourage national investment, especially in British agriculture. Exactly why may be beyond a simple sensibility like my own. However, it has to be a good thing. Right?
From the ecological perspective, investment into (what has been) a much ignored sector of UK industry, moreover, one that is committed to developing and refining the ways of ‘working with the land’, has got to have a positive outcome in store. Especially in today’s environmentally-aware consumer society, and with E.U. requisites focuses their firm eye, we can live in hope that there will be little room for woodland, agricultural and arable farming to be led astray into the wilder-than-wildlife cages of business investment. Can’t we?
