Farmland prices have hit a record high in England, and look set to keep appreciating - even if the forthcoming general election results in the widely-feared hung parliament.

Farmland values rose by 5.4% in the first quarter of 2010 to £5,397 an acre, property consultancy Knight Frank said.

The rise meant that buyers during the market trough a year before, as the global economic downturn hit its nadir, would have made an average return of 15.5%.

The latest upturn reflected in part a squeeze in the availability of lots for sale, with the volume of farmland advertised in Farmers' Weekly magazine slipping by 18%, year on year.

'Very good value'

However, demand was bring driven by the return of overseas investors who, with lifestyle buyers, have elbowed farmers out of picture, accounting for "virtually all" Knight Frank's farmland sales in 2010.

And this factor might be enhanced by the failure of any of the major parties to win control in the next election - resulting in a so-called hung parliament - an outcome viewed by many domestic observers with dismay.

Many analysts believe an inconclusive outcome would deny the UK the strong government they see as necessary to steer the country clear of Greece-style debt troubles.

"It is generally acknowledged that economic confidence in the UK will take a hit if we end up with a hung parliament," Mr Shirley said.

"If this, however, leads to a further weakening of sterling, it could make investing in English farmland even more attractive to buyers from overseas."

Growth forecast

Knight Frank added that it expected farmland prices to rise by a further 10% this year, taking them near to £6,000 an acre and, if fed into the consultancy's property index, implies a doubling in values in five years.

"The strong performance of the English farmland market that we saw at the end of the last decade has continued this year," Mr Shirley said.

Many analysts believe farmland has been helped by a quest for tangible assets, such as gold, fuelled by the economic downturn.