Forget gold, farmland makes sense

Here is a suggestion from the Graham Norwood school of property investment: why not put money into British farmland?

It seems a perverse suggestion given that farmland prices across the Western world have had fewer spectacular peaks and troughs than other property-related investments like commercial premises, the residential sector or even property funds. But actually, that’s the point.



We are living in a period where no investment is safe, perhaps least of all those that show sharp rises only to suffer equally swift falls. Spectacular is out, safe-but-dull is in.

British farmland rose in value by 21 per cent in 2008, despite a slowdown late in the year, according to land agents. This is a remarkable performance compared with, say, mainstream residential prices which saw falls of some 15 per cent in the same period. It takes the five-year increase for farmland to 135 per cent, also well ahead of commercial property. In the longer term, the performance is even better.

Many investors see gold as a good investment in times of economic uncertainty but in fact British farmland has performed even better in the past 25 years. If you look back to 1983 and take the price of gold and British farmland at that time as a base, gold has risen in value by 81 per cent but farmland is up 115 per cent