Figures released by DEFRA (Department for food and rural affairs) confirm that there has been a marked downturn in the number of agricultural land sales. By the third quarter of 2004, sales were down 62% to only 191 for the quarter, from the same period in 2003 and 83% from the last quarter of 1999.
The farmland market has seen an influx of non-farmer buyers on the back of the housing market boom. Demand from lifestyle purchasers and interest from those seeking alternative investments to the equity market has also been strong. Since their low in 1993, farmland values have risen by 176%, which has outpaced that of equities which have risen by only 75% largely due the technology market crash.
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However, in the past year, a marked drop in sales activity has occurred due to the uncertainty created by reforms to the Common Agricultural Policy (CAP), leading many farmers to hold rather than sell their land.
DEFRA figures also show a downturn in the average value of farmland in the third quarter of 2004, with prices falling 1.4% below last year's levels (based upon the four quarter moving average published by DEFRA). These figures have under reported the strength of the market into the latter half of 2004. More timely statistics from the RICS survey of chartered surveyors to the first quarter of 2005 show that average farmland values rose by 14% from a year ago levels.
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