Uncertainty over CAP reforms is preventing farmers from buying or selling land, according to the Institute of Chartered Surveyors.
The latest rural land survey, published by RICS today has found that farmers are unwilling to buy or sell land which could end up being either an asset or a millstone depending on the outcome of the review of the CAP, currently underway in the EU Parliament.
Meanwhile, market activity is being supported by demand from non-farming city people whose incomes are not dependent on the CAP.
Non-farmer buyers are facing increasing competition for farm properties as availability is falling. In the third quarter, 58% more surveyors reported a fall in the supply of farms with a desirable house, which is a significant decrease from the 22% reporting a decline in second quarter.
RICS also found that between July and September 45% of purchasers of rural property were ‘non-farmers’ – almost identical to the second quarter, while the proportion of farmers buying land fell from 43% to 41% over the same period.
RICS Rural Spokesman, Julian Sayers, says: ‘Uncertainty over the mid-term review of the CAP reforms is resulting in a lack of land coming on to the market as many farmers are holding back to see how the agricultural support regime pans out.
‘This, coupled with the strong appetite and competition for land from non-farmers, has supported expectations that prices will strengthen over the coming year.’