3 August 2001

RICSresults a mixed bag

By Andrew Shirley

THE Royal Institution of Chartered Surveyors has released its latest analysis of the farmland market covering the second quarter of the year.

Given the ongoing ravages of foot-and-mouth the results of the survey, which are compiled from questionnaires completed by land agents across the country, present a mixed bag of tentative optimism and continued gloom.

On the positive side, average land values appear to have gained ground and the weighted price for sales during the period was £3267/acre, up from £2896/acre in the first quarter (see graph) and 24% higher than the same period in 2000.

However, RICS economist Ryan Emmett emphasises not too much should be read into this. "Due to the reduced number of transactions the figure was based on a low level of sales and is meant only to be indicative of market trends."

A meagre 52 deals were recorded by the study between April and June, compared to 120 last year.

More pessimistically, a balance of 26% of respondents noted less buyer activity than in the preceding quarter. Although interest is much keener in the areas that escaped the direct effects of F&M.

This pattern is repeated for the various categories of land. Over 40% of the agents questioned predict a fall in demand in the hard hit beef and sheep sector, while only 22% expect a slackening off for arable holdings.

Availability is also set to rise. According to 80% of the surveyors, more land will hit the market over the coming months.

What remains to be seen is exactly how many producers will view F&M as the final straw and quit farming. If a large number do decide to sell up this could possibly precipitate the flood of properties and subsequent price collapse land agents have been predicting for some time.

Logic suggests this should have happened some while ago, but Mr Emmett reckons any downturn in values due to foot-and-mouth will take at least until the final quarter to filter through. "So far the decrease in supply has outweighed the decrease in demand." &#42