The economic climate has brought the boom in demand for farmland from non-farmer buyers to an end, although there is still a shortage of farmland on the market, says the latest report from The Royal Institute of Chartered Surveyors (RICS).
Lifestyle buyers ‘have all but disappeared’ says RICS, although availability also fell sharply indicating that few people were being forced to sell their farmland. Demand in the commercial sector, though, remains intact as Government loans to agricultural sector have been unaffected by the state of play in the residential sector which has been hit by the impact on the financal sector of the economic crisis.
RICS now predicts that farmland prices have peaked and that demand from lifestyle buyers is likely to remain depressed, although the commercial sector should, as a whole remain healthy, although small farms may suffer from a recent reversal in commodity prices.
C J Harding from Dreweatt Neate, Chippenham said: ‘The credit crunch in the last quarter of 2008 has begun to have an effect on farm and agricultural land prices. Residential farms have eased in value reflecting the problems in the general housing market, good commercial farms continue to be in demand. The land market is likely to become a two tier market with some blocks selling well and others in less popular areas being difficult to sell.’
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