Land prices drop

Struggling farmers are deserting the countryside and causing the price of land to drop, according to a survey.

The cost of farmland has been falling for over a year, with sales down 50% since 1998, said the Royal Institution of Chartered Surveyors (RICS).

The rural market is now dominated by families looking to escape city life.

Overall, land prices fell 5% during the final quarter of last year, with non-farming buyers outnumbering farmers for the first time since 2004.

"Rural homes are playing catch-up with the national market and are not yet mirroring the small rises being seen in the wider market," said RICS spokeswoman Sue Steer.

"A large proportion of buyers in the market seem to be families escaping to rural life."

Returns in the farming industry have been steadily falling, and land prices are starting to reflect the financial pressures people who work the land face.

Farmers also face an uncertain future until the latest Common Agricultural Policy reforms are implemented.

And rising fuel costs sparked by last year's record oil prices have made matters even worse.

"The rising costs of energy are now contributing to this squeeze on incomes especially for dairy farms, who use the most," Ms Steer said.

Date: 13th March 2006
Source: The Royal Institution of Chartered Surveyors