12:35

Land Values

One of the hottest asset classes of the last five years has been agricultural land. It is now well over £10,000 an acre and has gone for a lot more than that in certain places. Robey's Farm in Hampshire, for instance , recently went for £16,000 per acre. That two of the bidders were associated with the names Sainsbury and Heineken gives some clue to how it got to those levels.

It also highlights the problem with assigning purely commercial valuation logic to farmland. At £16,000 an acre the likely yield would be less than 1% - not much of a return for a hell of a lot of effort. Even at £10,000 an acre you are getting about the same net yield as a flat in Chelsea - the key difference being that you can lie on a beach in Barbados and collect your winnings in the case of the Chelsea flat. 

These figures only make sense in an era of ultra low interest rates where any yield at all looks reasonable. It also happens to be the sort of asset that wealthy people want to own and which doubles as a very attractive inheritance tax scheme. 

This is it's Achilles Heel. As HMRC cast their eyes over all tax avoidance schemes the burden is going to fall in the farmer to show that it is a serious business and not just a private game park.   

In the 1930's my great grandfather, a Bradford mail order magnet, bought an estate. He was asked by a colleague why he was entering a business he knew nothing about. He replied in a broad Yorkshire accent. 'I don't know nothing about farming but I do know about brown paper. An acre o'land is worth less than an acre o'brown paper - so I reckoned it were cheap!'

Any guesses on the current value of an acre o'brown paper?

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18:51

Milk prices

Milk prices
Much has been written about the role of supermarkets in the ruining of Britain's dairy industry. They aren't a monopoly in the stric...
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18:36

School Fee inflation

School Fee inflation
The cost of private education is breathtaking - and astonishingly bad value. How do they get away with such short terms and bad teaching rat...
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