chgs 3 days ago

In the U.K. farmland has a rental value of about £100 an acre but a purchase price over £10k an acre.

The value in the land isn’t in its use (which is getting 1% ROI), but in speculation it may be granted permission to be converted to housing, or because of tax loopholes.

2
blitzar 3 days ago

The owner also get capital appreciation / depreciation of the land - ~5.7 per cent per annum over the last 100 years bring the total return to a 6.7% ROI.

Land at the edge of cities and towns where there is a reasonable chance of development happening costs orders of magnitude more than the average.

The person renting that land then farms it (presumably for a profit) for additional ROI.

pjc50 3 days ago

Yes, this came up in the recently closed inheritance tax loophole; people were buying "family farms" purely to leave to their children while doing the minimum of farming.

chgs 2 days ago

Yes speculation and tax avoidance. Neither of which are behaviours we want to encourage.