Returns on UK farmland have slumped to their lowest levels in eight years, according to the IPD UK Annual Rural Property Index.
Total returns were 5.5% in 2015, almost half the 10.4% delivered in 2014, and well down on the five-year average returns of 10.6%.
Rural property has enjoyed a bull run since 2009, due to a perceived status as a safe capital hold that also enjoys favourable tax status.
Capital growth has averaged 9% over the last five years, but fell to 4.1% last year.
MSCI said sentiment had recently been tempered by weakening commodity prices and the EU referendum.
Capital growth slowed most in the South East, to 5.8% from 17.9% in 2014, though eastern England, East Midlands, and Yorkshire and Humberside all saw significant moderation.
Colm Lauder, vice president at MSCI, said: “The weakened investment performance suggests confidence in the land market is cooling down after years of great returns.
“Investors were concerned that it will be some time before there is a clear picture for the agricultural economy.”
The index tracks the performance of 1,873 properties with a capital value of more than £3bn. The index is sponsored by Carter Jonas and Savills.
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