The South China Morning Post reported yesterday that Chinese investors are joining the rush for British country estates. So, what’s happening?
Last Friday, the Guardian reported that, in addition to snapping up multimillion-pound townhouses in Knightsbridge and Chelsea, rich foreigners are now buying farms and country estates across the UK. The story is here.
Estate agents are reporting a big increase in investment buyers – some from as far away as China – trying to buy swaths of British farmland. The influx has sent the price of farmland to a record high of £6,882 an acre – an 11% jump on this time last year and a 210% increase over the past decade.
The Guardian reports that Andrew Shirley, head of rural research at estate agents Knight Frank, said: “People from around the world who buy a townhouse in Chelsea look around for what else they could buy… increasingly they’re looking at country estates and farmland. There has been a significant increase in inquiries from overseas investors.”
He said rich buyers were “not going to be sitting on the tractors themselves” but were buying farms for investment or as a “lifestyle estate”.
The Chinese are also becoming increasingly attracted to the British countryside, though more for its investment potential than to be country squires.
Rich buyers spent £54m on Scottish estates last year, according to the estate agency Savills. One world-renowned grouse-shooting estate changed hands for £20m and two others sold for between £8m and £10m.
Farmland’s cost per acre compared with gold prices over the last 50 years
The Guardian article refers to research by Knight Frank which shows the average price of UK farmland has risen to £6,882 an acre, compared with £6,214 a year ago. That works out as an 11% increase, compared with an 8% increase in UK average house prices and a 30% decrease in the price of gold over the same period. The 210% rise in the price of farmland over the past 10 years is significantly more than that for the FTSE 100 – the index of leading shares has risen by 51%.
Also mentioned is Ian Bailey, the head of rural research for Savills, who said prices were rising because demand far outstripped supply. Last year just 150,000 acres of farmland were put up for sale compared with 300,000 a decade ago. “It’s a tangible asset – people can live on it and walk on it,” he said. “It’s a popular product and we’re not making more of it.”
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