Farmers are winners as land demand falls

Fewer city people are looking to quit urban life for a rural retreat – leading to a boom for farmers, according to figures from the Royal Institute of Chartered Surveyors.

More chartered surveyors are reporting a decrease in demand for residential farmland, with 30 per cent more nationally reporting a fall than a rise, continuing a downward trend that started last year.

By contrast, demand in the commercial sector has been strong across the UK.

In that sector 22 per cent more surveyors are reporting a rise than a fall, as large-scale commercial farmers return to the market looking to expand their production.

In the West Midlands, farming purchases rose by four per cent with evidence suggesting that interest is local.

This interest in agricultural land was borne out by a successful auction in Shropshire. More than 47 acres of farmland inside the Shrewsbury bypass and two building plots were sold at a public auction held by Balfours at the Lord Hill Hotel.

More than 120 people attended the sale last Thursday when land sold at an average of just under £10,000 an acre.

Tim Main, head of sales at Balfours, said: "There had been significant interest prior to the auction, so we were optimistic. Certainly the auction demonstrates that, despite the current economic climate, agriculture remains firm and investors with money are willing to invest in a commodity they know well and trust in the long term."

He added: "The two building plots with planning permission were each snatched up after strong bidding. The plot at The Laurels at Baschurch comprised of a 0.2 acre site and sold above its guide at £153,000. The final lot at Bishops Cottage, Worfield, sold well above its guide at £207,000."

RICS West Midlands spokesman, Steven McLaughlin, confirmed: "Prices are holding up well across the region, with the slight fallback reported in the survey coming from a very high peak in 2008. Scarcity of land for sale remains a significant issue but the demand for farmland has remained somewhat resilient to the economic downturn."

He added: "The demise of the residential market has led to a shift in land sales and created a positive turn of fortunes for farmers."

By Neil Thomas