Farmland sales dip

From the archive, first published Monday 5th Dec 2005.

Demand for farmland has fallen for the first time in Wales since mid-2001, according to the Royal Institution of Chartered Surveyors rural land survey published recently.

Farmland prices were unchanged, although overall price levels are lower than a year ago.

Sales activity is quiet, with surveyors reporting a sizeable fall in availability of land.

Fifty-five per cent of buyers in Wales are individual farmers, against 33% non-farmer purchasers -- compared to 45% and 40%in the UK as a whole.

The cooling of the housing market over the last year has contributed to the softening of prices and affected demand for residential farms, while the recent downturn in agricultural output has hit demand for commercial farms.

Continuing uncertainty over some areas of Single Farm Payment entitlements has also led to a fall in supply of land to market.

Across the UK, RICS members expect commercial farms to see modest increases over the next year, with residential farms fetching lower prices -- the first negative outlook since the survey began a decade ago.

This is the first quarter in over a year where farmland has lagged behind the residential market.

However, according to RICS Wales director, Cathy McLean: "With the wider housing market exerting such a strong influence on rural land prices, the general housing slowdown is restraining growth for now.

"The picture is clouded by uncertainty over Single Farm Payments which is keeping some buyers out of the market and demand is unusually low in Wales -- but so is the amount of land becoming available so it's a flat market."

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