Demand for residential farmland plummeted in 2008, according to the RICS.
The chartered surveyors’ Rural market survey, published today, says that demand has fallen from a positive 50 on its balance last year, to -64% in the second half of 2008.
It warns that prices peaked in H1 2008.
The report says that “demand has fallen drastically”, with an expectation that buyers will “continue to retreat while the challenging financial climate persists”.
However, the RICS reports that availability fell sharply, suggesting there hasn’t yet been a great number of distressed sales.
Demand in the commercial farmland sector has fared slightly better with the net balance just falling into negative territory.
The weighted average price for farmland, including residential land, is now £16,318 per ha.
RICS spokesperson Sue Steer said: “The downturn in the economy has made many from the financial services sector re-think their life-style priorities, putting an end to city expansion into rural areas.
“Prices for farmland peaked in the first half of 2008 and lower commodity prices and an uncertain financial climate could push prices lower in the first half of 2009.”
