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Investors drive up price of farmland

Investors' high demand for farmland, coupled with a supply shortage, caused prices to rise in the second half of 2009, following a slight dip in the previous six months.

Low interest rates have led to investors choosing alternative assets in an attempt to maximise their returns. With farmland maintaining its value during the recession, this has proved a popular investment.

The lack of land being put up for sale fuelled an almost eight percent price rise in the latter six months of 2009, with prices expected to keep rising in 2010 as demand continues to outstrip supply.

Available farmland has also proved popular with established farmers who are looking to expand and so capitalise on increasing livestock prices.

The demand for residential farmland, for example, land with a farmhouse, also increased in the second part of 2009.

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