Demand for country retreats collapses as City bonuses dry up, says RICS

Published 22nd Jul 2009

Royal Institution of Chartered Surveyors sees sharp decline in 'lifestyle buyers' for residential farmland


The number of City workers buying rural retreats plunged in the first half of the year as firms continued to slash jobs and bonuses in the financial crisis.

The Royal Institution of Chartered Surveyors (RICS) said today that 30% more surveyors reported a fall than reported a rise in "lifestyle buyers" in the six months to the end of June. Demand for residential farmland has been in decline since the start of 2008.

However, it said that large-scale commercial farmers in Britain were still keen to expand production, particularly onto neighbouring farms, with 22% more surveyors reporting a rise than a fall. But the Rics added that foreign demand for commercial farmland, especially from Irish farmers, has dried up.

Commercial farmland prices remained broadly flat in the first half of the year, but farmland containing residential property has seen prices fall.

The RICS found the price for bare land fell 1% to £12,172 per hectare, the price for arable land fell 1% to £13,085 a hectare, and the price for pasture land fell 2% to £11,260 a hectare.

The overall price of farmland, including residential land, fell 7.5% from £16,342 a hectare to £15,114.

Julian Sayers, a spokesman for RICS, said: "While the economic climate remains so uncertain, it is improbable that we will see demand for rural retreats return to pre-recession levels. As a result, residential land prices look likely to remain depressed for some time to come.

"The improvement in commercial land is encouraging. However, with the downward pressure on arable prices we are currently seeing and the lack of foreign demand, there is a risk that this more favourable trend could run out of steam."

While 15% more surveyors expect price rises than falls in the non-residential sector, 9% more are expecting prices to fall than rise in the residential sector.

Source: ' Guardian '

View All Latest News