“Buy Land – they´re not making any more of it” – Mark Twain
UK land is gaining in value faster than ever before. Some extraordinary numbers released last week showed that UK land values increased by £450bn last year.
Land now represents 51% of the UK´s net worth and dwarfs the amount held in property and financial savings. That compares to just 26% in Germany and 41% in France – a country with a land mass nearly twice the size of Britain.
So it appears that Mark Twain was right – but buying ANY land can often be a fool´s errand. Land that has residential planning approval can be worth up to 100 times the price of farmland and several times the price of Brownfield. However, planning permission is a very imprecise science and buying land on the basis of promised permissions is at best speculative and often little short of misrepresentation by the brokers selling it. There are NO investment guarantees when it comes to buying land and NO certainties in terms of timescales.
What is absolutely guaranteed is that land prices and property prices across the UK will continue to increase in the medium and long term. The days of home-ownership for the majority are over and it is forecast that more than 50% of the population will be renting privately (up from 16% today) by 2035. The UK´s property shortfall is getting worse and the need for good quality rental property means that investors should be putting their money into developers who have the experience to buy the right land for private rental sector developments, and not taking the planning risks themselves.