New research suggests that a third of IFAs expect the value of UK land to increase dramatically over the next three years.
The new figures come from a report commissioned on behalf of the Consilium Strategic Land Fund. This is a fund which aims to deliver an annual return of 12% a year by investing in UK land sites predominantly in the South East.
The figures also reveal that over half of those IFAs questioned say that they think land values will rise ‘slightly’, whilst none of them think they will fall.
What’s more, the questioned IFAs believe that land prices will rise the most in London between now and 2018, but 84% of those interviewed still listed the South East in the three regions likely to see the most growth. This was followed by 44% who said the same for the South West, and 15% who cited East Anglia and the West Midlands.
As to what is driving the rise in land prices, just over half of IFAs said that population growth is very important, and this is followed by 39% who said this it’s central government support to build homes on land, such as more favourable legislation. Some 36% cited demographic changes such as the dramatic rise in single person households and people living longer.
Director of the Consilium Strategic Land Fund Joanne Luce said: “We believe UK land is one of the most attractive asset classes available at the moment. As our research shows, the potential for it to increase in value over time is high and it also has very low correlation with other real estate asset classes, as well as equities and fixed income.
“However, the challenge for investors is to find land investment opportunities with realistic potential to have planning permission granted on them.”