Britain's troubled Co-operative Group is preparing to cash in on nearly 18,000 acres of farmland in one of the biggest UK land sales in decades. As Ivor Bennett reports, the market timing couldn't be better, with farmland prices soaring over 270 percent in the last 10 years.
REPORTER: England's green and pleasant land - where the hills are rolling, rolling in cash. This farm is just under 500 acres, and 8 years ago, it sold for around 2 million pounds. Now it's just been put on the market again, but the guide price this time is over 5 million. The value of prime British farmland has soared by over two hundred and seventy percent in the last decade. Land now selling at an average price of 8,500 pounds an acre. The increase is more than double that of prime London real estate, up 135 percent for the decade. James Prewett is head of regional farm sales at Knight Frank.
JAMES PREWETT, HEAD OF REGIONAL FARM SALES, KNIGHT FRANK: "It's been a perfect storm of various factors. There's the financial crisis where people were looking for something to invest their money into, a tangible and physical asset; agricultural conditions have improved significantly in the last couple of years; and overriding shortage of supply has helped push prices up."
REPORTER: Infrastructure and housing projects mean that Britain's farmland is in fact shrinking - at a rate of 0.2 percent a year. Since they're not making it anymore, prices are set to only increase.
JAMES PREWETT, HEAD OF REGIONAL FARM SALES, KNIGHT FRANK: "Well there's always an obvious opporutinity to compare it with what happened in the housing market, and all I'd say is there doesn't appear to be a massive relaxing of supply at the moment. And as long as supply remains tight, I would have thought that prices will remain firm, stable and keep on growing."
REPORTER: Farming itself isn't that lucrative. Returns are just 2 percent compared to 20 in property. The attraction though is the security, along with the strong capital growth. Private investors and even pension funds among those now ploughing money into the country. Unlike in the city, though, foreign ownership is relatively low, overseas buyers accounting for just 8 percent of farmland sales in 2013.
1. To cash in on something means to get money or another advantage from an event or situation, often in an unfair way. • Her family have been accused of cashing in on her death.
2. If you are rolling in something, you have a lot of it. • After winning the lottery they're rolling in money.
3. A perfect storm is an occasion when several bad things happen at the same time, creating a situation that could not be worse. • The company blamed a perfect storm of bad trading conditions for a 90 per cent fall in profits. In the case of farmland prices, the perfect storm is of course positive for the sellers.
4. If you plough money into something you invest a large amount of money in a company or project. • The government has ploughed more than $20 billion into building new schools. There's an agricultural pun in the video since the literal meaning of to plough is to turn over the soil with a plough (pronounced 'plow' and spelt that way in American English).