Rural UK property returned 12.3 per cent for the year ending December 31st, 2013, according to the IPD Annual Rural Property Index released in association with Carter Jonas and Smiths Gore.

This sector performed well in the recession, said the IPD, producing a 10.9 per cent total return over the last five years. Most of that was generated by rising values (10.7 per cent). Although income, mainly rents paid by farmers to lease land, is small (1.4 per cent of capital value), rents are rising due to it being a profitable period for farming.

Mark Weedon, IPD's vice president, said: "These index results show how well rural holdings have performed compared with other asset classes. This type of investment offers great diversification options against more mainstream assets."