London, 20 June 2012, Investors everywhere breathed a sigh of relief this week as Greece opted to stick with the euro instead of defaulting on its debt, and some economists are now confident that growth will return to the eurozone during the latter half of the year.

Economic turmoil across the continent has created widespread difficulties for numerous investment sectors however the price of rural land in the UK continued to grow in 2011.

Commercial property values may be in decline across most of the country, although the rising price of commodities, which has led to rising profitability in the rural sector, has attracted further interest in land as a safe investment.

Demand for agricultural land strengthened throughout 2011 as investors continue their ‘flight to safety.’ Both active farmers and investors proved acquisitive, due to the safe haven status of the asset class. Furthermore the restriction in the amount of land available, and the weight of money moving in, has led to considerable pressure on prices.

Richard Liddiard, head of rural agency at Carter Jonas, comments, “Agricultural land has continued to remain in high demand from a widening array of investors. The ongoing period of macro-economic uncertainty and turmoil has underpinned the need for safe havens for investment, and land has been a beneficiary of this trend.

With limited stock levels available on the open market, prices rose throughout 2011. Prime farmland values are forecast to continue to rise although at a slower pace than witnessed last year as the amount of land for sale remains relatively low. However, there is increasing evidence of a two tier market appearing with values of poorer quality farmland forecast to witness a decline.

The significant tax advantages in holding agricultural land, for investors and individuals, have further reinforced its performance compared with alternative asset classes. The powerful tax advantages of holding land means there is little incentive to bring to the market, ensuring supply remains scarce, which will underpin current values.

Mark Weedon, associate director of Alternative Asset Investments, affirms, “Despite any concerns surrounding the inflationary pressures on the sector, rural property remains one of the best performing asset classes that IPD measures. Five year returns were 11.9 per cent, against the IPD All Property Index which recorded - 0.7 per cent, whereas equities recorded 6.2 per cent.