(Thisismoney.co.uk) - The cost of farmland has been rising over the past decade and held its own during the recession. So why is farmland remaining so consistent and popular with buyers?

The Royal Institute of Chartered Surveyors has revealed in their most recent Rural Land Market Survey that the price for commercial farmland remains high, driven by increased demand and a continued lack of supply.

Over the past six months, 47% more chartered surveyors reported a rise rather than a fall in demand for commercial farmland. This was up from 31% in the previous half year.

Demand for residential farmland increased but not as sharply, with 14% more surveyors reporting a rise in demand rather than fall, up from 1% in the last half of 2009.

Prices are being driven up by both investors and lifestyle buyers. The demand from non-farmers is outstripping supply.

Even bearish market pundit, Marc Faber, who is nicknamed 'Dr Doom' for predicting the 1987 stock market crash, likes land. He recommended investing in farmland and gold in a speech he hosted in February.

Typically there are four main reasons put forward for farmland's popularity (and it remaining reasonably unaffected by the downturn):

People speculating

Farmland is one for the speculators. People buy into farmland as they see prices rising, although they have no specific knowledge or reason to believe that the land will rise if value – it just does as other speculators buy into farmland.

Lifestyle buyers looking for the good life

Many people, especially City high-fliers, like the idea of buying into the 'good life.' These people like the idea of owning a bolthole from the urban environment - an emerald field in the middle of the country which they can call their own.

Foreign farmers buying UK land

British farmland has been relatively cheap compared to other nearby countries, such as Ireland and Scandinavia. This makes it attractive to overseas buyers. In 2008, 15% of farmland was snapped up by overseas investors. The majority of these buyers were from Holland, Ireland and Scandinavian countries. This means prices are pushed up as demand increases.

Inheritance tax benefits

Actively farmed land becomes free of inheritance tax after you have owned it for two years. If it is not actively farmed by you but by a tenant, it usually qualifies for a 50% capped reduction. Be warned actively farmed by you does actually mean you being personally involved in farming the land and agricultural buildings and farmhouses must meet strict criteria.