Farmers are regaining the initiative in the countryside and fighting back against the "city slickers", despite rising farmland prices.

The latest rural land survey published by the Royal Institution of Chartered Surveyors (RICS), shows farmers in the South East, encouraged by improving commodity prices, beginning to reverse the recent trend of non-farming buyers accounting for an increasing share of the market.

Individual farmer buyers in the region now account for 35 per cent of the market, up from 21 per cent in the fourth quarter of 2003. The proportion of purchases by non-farmers has fallen from 65 per cent at the end of last year to 44 per cent in the first three months of 2004.

The demand for commercial farms is also rising steadily, with 43 per cent more surveyors reporting a rise than a fall, a new five-year high.

Trevor Hines, South East regional director of RICS, said: "Things are changing in the rural land market. For the first time since 2002, the influence of non-farmer buyers is decreasing in favour of farmers.

"This has been brought about by an improvement in the returns for certain sectors and growing certainty regarding the outcome of the Common Agriculture Policy (CAP) mid-term review.

"Howevever, chartered surveyors believe that some farmers are holding back from putting their property on the market until the final implications of the single farm payment regime are known."

Institutional investors and developers are also looking towards farmland as a commercial investment.

In the South East, five per cent of farm purchases were by institutional investors and a further five per cent by developers.

Across the South East, the RICS anticipates a moderate but clear upturn in demand for commercial farmland after a prolonged period of decline.

When it comes to prices, little or no change is envisaged for the year ahead, although chartered surveyors anticipate firm rises for the residential sector.

According to chartered surveyors, South East farmland prices averaged £2,450 per acre for arable land and £2,000 per acre in first quarter of this year, up 12 per cent on the same period last year.

The rise in farmland prices continues to be exacerbated by demand outstripping supply and a decline in the availability of land on the market.

The volume of sales dropped from 84 per cent in the last three months of last year to 34 per cent in the first three months of 2004.

Much of this can be accounted for by the usual seasonal weakness.

Tuesday May 11, 2004