It's the latest craze, but beware firms asking up to £200,000 an acre for land that may never be developed, advises Alexander Garrett

...It is a message that has been persuading gullible investors to part with thousands of pounds, with little likelihood that they will ever see a return on their money. There is also evidence that many of those who have succumbed to such marketing are ethnic minorities and recently arrived immigrants, who don't understand UK planning law.

...Anyone tempted by one of these investments should bear in mind the fact that there is not a single known example to date of a site divided up into small investment plots receiving planning permission for development - despite what any of the salesmen claim about their 'track record'.

...Some of the land investment companies have suggested that holding such a plot is a good investment in its own right, but the opportunity to re-sell is likely to prove elusive and, in any case, agricultural land is not quite the dynamite investment that many of the investment companies suggest. Hayden James, for example, claims on its website that 'land prices over the past 20 years have seen consistent rises totalling over 1,000 per cent with no signs of slowing'.

Estate agent Savills, which closely monitors prices of agricultural land, tells a different story. Ian Bailey, associate director for research, says: 'Prices have gone up by 25 per cent in the past two years, but that has been exceptional. Alongside inflation, land hasn't done well at all. Prices peaked in 1975 at around £4,800 per acre, and the average today is around £2,300.'

(Via the Observer. To read the full story, click here)


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