Compare and Contrast - Farmland Price story Telegraph and RICS source

Mon Feb 16 11:50:30 GMT 2009

Price of farmland falls as City Workers ( surely should be vampires )
abandon dream of rural retreat  ( from the Torygraph)

Demand for farmland has fallen sharply because City workers can no longer
afford the luxury of a rural retreat, according to new research. 

 By Harry Wallop, Consumer Affairs Editor -16 Feb 2009

Cottage - Price of farmland falls as City workers abandon dream of rural
retreat 

There has been a dip in demand for rural properties, suggesting that city
workers can no longer so easily afford a second home in the countryside 

The value of a place in the countryside climbed strongly over the past
decade as an increasing number of bankers, lawyers, and other executives
have sought weekend properties with land attached. 

But this demand has stopped abruptly because of the recession, according to
the Royal Institution of Chartered Surveyors (RICS), and as a result the
price of land has started to fall. 

The fall in value mirrors the drop in other markets  such as wine, art and
hotel rooms  which also enjoyed a boom thanks to bankers looking for a home
for their money. 

"Demand for residential farmland plummeted in the second half of 2008, as
life-style buyers all but disappeared," said the RICS report published
today. 

Almost two-thirds more surveyors (64 per cent) reported a decrease in demand
for residential farmland than those who reported an increase when questioned
by RICS. 

The speed of the slump is illustrated by a sudden tail-off in demand for
farmland  at the end of 2007, 50 per cent more surveyors reported an
increase in demand. 

The price of farmland nearly doubled in just three years, shooting up from
£2,764 an acre to £5,248 an acre in the first half of 2008. 

During the second half, however, prices started to fall and the average
price at the end of last year was £4,994. 

Sue Steer, a spokesman at RICS, said: "The downturn in the economy has made
many from the financial services sector rethink their life-style priorities,
putting an end to city expansion into rural areas." 

The end of the boom has also been caused by the sudden reversal in commodity
prices, including wheat and dairy. 

During 2006 to halfway through 2008, the price of these key food ingredients
escalated on the global markets, encouraging many investors to exploit the
trend by buying up farmland. 

BlackRock, a City fund management company, bought 2,800 acres in Norfolk,
for instance. 

"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," Ms Steer added. 

Now if they can just go away and die.

But from  the Royal Institute Charted Surveyors site http://www.rics.org/
the story is....

City Slickers running scared but arable land prices reach record high

RICS Rural Market Survey H1 2008

UK farmland prices surged at the fastest pace in the RICS rural market
surveys history during the first half of 2008 but lifestyle buyers
retreated as the credit crunch deepened.

The farmland market jumped forward, with the average price rising by 24
percent (the fastest pace in the surveys history) from £10,439 to £12,965
in the first half of 2008 and by 47 percent year on year. 

Arable land rose by 32 percent to £14,453 from £10,439 and pasture land rose
by 16 percent to £11477 from £9929. Sharp increases in commodity prices
continue to encourage farm investors to expand production or enter the
market as purchasers.

The net balance of Chartered Surveyors reporting an increase in demand for
residential farmland fell for the first time since 2005 from 50 percent to
-3 percent while demand for non-residential farmland remained buoyant at 65
percent. 

The net balance of surveyors expecting price rises in residential farmland
fell from 30 percent to -25 percent. There is an expectation that lifestyle
buyers will continue to retreat while the challenging financial climate
persists. 

The number of farmland sales surged by 50 percent year on year and farmland
availability picked up by in both the residential and non-residential
sectors. Sharp rising costs in food and commodity prices have pushed input
prices upwards resulting in marginal farms becoming unprofitable. 

RICS spokesperson, Julian Sayers said:

"Ever rising commodity prices have pushed the price of farmland to record
highs as farmers and investors compete for arable land. However, the days of
the lifestyle buyer are on the wane. The credit crunch is putting an end to
city expansion into the country as the precarious financial situation has
made city slickers re-think their lifestyle priorities."

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