Buy Land!!! NOW IS THE TIME?

[Bossfarmer]

With a lot of farmers in the country falling out with landlords over high rents/ future ELMs scheme threatening to take their land, owner occupiers looking to expand and interest levels at record levels, huge inflation forecast in the coming decade is this the perfect storm and infact the ideal time to buy?

Take for example a block of 200 acres medium quality grade 3.1 land at 6k an acre on a 40 year interest only loan, lets say its 1.2m today, in 40 years time it could be worth 5m? the value of money will change instead of a few pounds for a pint youll be £15-20

Am i right here what do people think? ive never gone down this route before but then interest rates have never been as low in my lifetime and may never be again

 

[Holsteinfriesian90]

6k . It’s more like 10k in Cornwall

 

[teslacoils]

Inflation alone would mean your 1.2m will be the equivalent of 4m in 40 years time.

 

[teslacoils]

Bank margins are widening. UK vase rate is about to go lower. Perhaps you've missed the boat.....

 

[thesilentone]

As long as cash has little value, land will.

 

[paul&mandy]

With a lot of farmers in the country falling out with landlords over high rents/ future ELMs scheme threatening to take their land, owner occupiers looking to expand and interest levels at record levels, huge inflation forecast in the coming decade is this the perfect storm and infact the ideal time to buy?

Take for example a block of 200 acres medium quality grade 3.1 land at 6k an acre on a 40 year interest only loan, lets say its 1.2m today, in 40 years time it could be worth 5m? the value of money will change instead of a few pounds for a pint youll be £15-20

Am i right here what do people think? ive never gone down this route before but then interest rates have never been as low in my lifetime and may never be again

I'm not an expert but after 40yrs it still wont be your land as you have only made interest payments.

 

[Steel]

Land prices have gone crazy here too.
We bought a neighbours place a couple of months ago for $2500 an acre including crops. I thought we may have gone a bit crazy and paid to much at the time. Since then other places have sold for up to $2700 not including crops.
Even the bank manage recently said we got it cheap.

 

[vantage]

If you have the income to cover it, ok. Trouble is land value is divorced from the income attainable on it.

 

[lloyd]

With a lot of farmers in the country falling out with landlords over high rents/ future ELMs scheme threatening to take their land, owner occupiers looking to expand and interest levels at record levels, huge inflation forecast in the coming decade is this the perfect storm and infact the ideal time to buy?

Take for example a block of 200 acres medium quality grade 3.1 land at 6k an acre on a 40 year interest only loan, lets say its 1.2m today, in 40 years time it could be worth 5m? the value of money will change instead of a few pounds for a pint youll be £15-20

Am i right here what do people think? ive never gone down this route before but then interest rates have never been as low in my lifetime and may never be again

Will you be able to claim subsidies on it?

 

[GeorgeK]

In 40 years our currency will probably be Yuan

 

[roscoe erf]

price of land could go down or up ill just rub my crystal balls together arrr thats better

 

[jackrussell101]

With a lot of farmers in the country falling out with landlords over high rents/ future ELMs scheme threatening to take their land, owner occupiers looking to expand and interest levels at record levels, huge inflation forecast in the coming decade is this the perfect storm and infact the ideal time to buy?

Take for example a block of 200 acres medium quality grade 3.1 land at 6k an acre on a 40 year interest only loan, lets say its 1.2m today, in 40 years time it could be worth 5m? the value of money will change instead of a few pounds for a pint youll be £15-20

Am i right here what do people think? ive never gone down this route before but then interest rates have never been as low in my lifetime and may never be again

I agree with you that now is a good time to buy land.

But I disagree with the notion of a high inflationary period over the next 10 years like what happened in the 1970s.

However, it's looking increasingly likely that we are entering a period of a new economic era that is going to result in a period of negative interest rates.

How this will play out remains to be seen.

If we have a base cut to -0.5% sort of region like Europe, then there will be a very mild appreciation in asset prices, land that was £10k an acre will likely go to £11-12k an acre.

If however rates go to -3% or below sort of territory then there will be a much greater uplift in values, and it wouldn't be unreasonable to see ag land values go to £15k an acre.

I know it does seem a bit crazy about thinking of base rates in that sort of region but some of the leading economic thinkers of our time are now suggesting that it is possible.

Warren Buffet recently in a TV interview said 'the biggest question going forward for the financial markets is how they will respond to negative interest rates'.

Ken Roggoff, a leading economist and senior Harvard academic has also written some very interesting papers and articles on the potential new era of negative interest rates.

Finally, there is always an inverse relationship between interest rates and asset prices. As noted by a previous poster, if we get negative be sure to shop around as bank margins are sure to increase.

 

[Danllan]

Will you be able to claim subsidies on it?

Not for much longer...

 

[Exfarmer]

Always remember land values are driven by Tax regimes. If it were not for IHT and CGT reliefs they would be far lower, and who knows what the chancellor is going to do 10 years down the line

 

[lloyd]

Not for much longer...

And there I was thinking we were becoming the 51st state of America
and entitled to a proportion of their $30 billion dollar+subsidy handout
to farmers .

 

[jackrussell101]

Always remember land values are driven by Tax regimes. If it were not for IHT and CGT reliefs they would be far lower, and who knows what the chancellor is going to do 10 years down the line

True, and interest rates too

 

[Jdunn55]

6k . It’s more like 10k in Cornwall

If not 12-15!!

 

[Green oak]

Trying to keep what you have is the biggest focus for me. Let alone buying more!!

 

[7610 super q]

I dunno. Paying £10k / acre to earn £200 / acre per year ( arable ) ? I'm ooooooot.

 

[jackrussell101]

I dunno. Paying £10k / acre to earn £200 / acre per year ( arable ) ? I'm ooooooot.

UK 10 year GILTS are currently yielding 0.18% as of this morning.

Ag land at 2% annual return based on your example doesn't seem too bad does it?