A new investment index which distinguishes between let and farmed land, has recorded a 10.9% return for farmed properties in 2012 compared to a 20% return for let properties.

The new Bidwells Agri-Investment Index (BAII) separates the performance of let agricultural land managed for investment, from estates farmed by their owners or through contract farming agreements. The returns shown by the index reflect the rental income and capital growth from let farms and the farming return and capital growth for farmed estates.

The average value of farmed land in 2012 was recorded at £8,479/acre on average- nearly twice the value of the average let land, at £4,764/acre.

The index measured the investment performance of more than £500m worth of agricultural and rural property with a strong bias towards arable land in the East.

Property in the let category included a diverse range of estates let under a variety of tenancies, and in the farmed category a sample of farms managed by Bidwells.

Using the BAII the average return for farmed land over the economically challenging period of 2007-2012, was recorded at 12.5% and at 16.9% for let land over the same period.

 BAII total returns to end of year 2012 (%)   
  One year Three years Five years
BAII let 20.0 16.7 16.9
BAII farmed 10.9 15.2 12.5
UK equities 10.2 6.7 2.1
UK bonds 4.7 9.9 8.8
Source: Bidwells   

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