Buy land, they're not making it any more - that was the advice of Mark Twain more than 100 years ago, and it still looks pretty sound today. The value of houses, offices, shops and malls may be in freefall but farmland is soaring as the high price of wheat bolsters demand.

Figures from land agent Savills today showed the price of English farmland has risen by a staggering 30% since December, and is now nearly 50% higher than in June last year. It is double what it was three years ago.

Not even at the height of the property boom were house prices rising that fast, and experts reckon land will go up another 15% by the end of the year - slower growth than before but not to be sniffed at.

Supply is tight and demand has risen sharply on the back of soaring commodity prices, particularly wheat. Wheat has tripled in value over the past year - although it has retreated from its peak in recent weeks - so it is no surprise that the value of a wheat field should respond.

Wheat prices reflect the fact that the world's food supplies are struggling to keep up with the growing population. Over the past 30 years, the world's population has increased by more than 50% to over six billion. It is expected to rise above nine billion by 2050. China is now a net importer of wheat, and both China and India are consuming dairy products and meat in large quantities for the first time.

There is also pressure to produce crops for biofuels - so farmland is now an attractive prospect, and not just for farmers. There is still, despite the credit crunch, a steady flow of City types escaping the hustle and bustle of London for life in the country. And it is worth remembering that agricultural land is free from inheritance tax, so anyone looking to pass on their wealth to future generations could do a lot worse.

But it is also attracting attention from investors reeling from the crisis in financial markets. Farmland has long been seen as a safe haven during times of turmoil, and values mirror both movements in the price of gold, that seemingly recession-proof commodity, and of oil, where sharp price rises are often a precursor to an economic slowdown.

No wonder seasoned investors such as Vincent Tchenguiz are now buying into agriculture. The property tycoon has taken a stake in the Braemar UK Agricultural Land fund. "You won't see me driving a combine harvester," says Tchenguiz, "but we look forward to reaping the rewards. This is an excellent opportunity as supply constraints and price pressures combine to enhance the potential value of British farmland."

Braemar is looking to raise £20 million - from punters putting in a minimum of £10,000 - so it can buy land and grow cereal crops for food and biofuels. "It is a nice, steady asset to own," says managing director Marc Duschenes. "It is not going to set your portfolio alight, but you're not going to go bust either."

Investing in British farmland also has the advantage that it is much cheaper than in many parts of Europe. According to Savills, the average price of land in Britain is now £4400 an acre - up from £3000 a year ago and £2200 three years ago. Prime land goes for a lot more, over £10,000 an acre, but the average price is less than half what it is in Denmark and Ireland and considerably less than in the Netherlands, Belgium and Germany.

As Duschenes says: "Britain is a nice, stable north-western European economy with the same climate and same quality of soil as north-western Europe. But our land is at a discount."

This has attracted significant investment from farmers in Denmark and Ireland as well as from other institutions. BlackRock, part-owned by Merrill Lynch, has launched an agriculture fund which has raised $450 million, and Knight Frank plans to launch a fund through its Rutley Capital Markets subsidiary. Allianz launched a global agriculture fund in April and Barings is planning a similar move in the autumn.

Brad Cole, president of Cole Partners Asset Management in Chicago, a fund of hedge funds focused on natural resources, is also looking to English farmland, or "wherever the profit picture is improving".

But just as the housing boom came to an abrupt end in the wake of the credit crunch, there are those who warn this is nothing more than a bubble. The rising cost of transport and fertiliser is gnawing away at the profits farmers hoped to make from a spectacular wheat harvest. Michael Summers, an agricultural manager at HSBC, warns: "If you look closely at the numbers, it is less easy to reconcile the size of the increases in land value back to farm profitability."

No one expects land values to grow as fast in the next 12 months as they did in the last. Andrew Shirley, head of rural land research at Knight Frank, concedes profits for new investors are "not going to be as good as people thought a year agoî. But pointing out that land prices have risen from "a very low base" and are well below much of Europe, he insists this is not a bubble about to burst: "We will still see steady growth. The market is dictated by supply and demand, and there are still plenty of people out there who would like to buy land."

And as they say, they are not making land any more.