THE price of farmland in East Anglia has hit record levels as non-farmers take advantage of low interest rates and buy up farmhouses, barns and land.But the latest rural land survey admits it remains unclear whether farmers in the county are being squeezed out of the market or if they have chosen to stay away.

THE price of farmland in East Anglia has hit record levels as non-farmers take advantage of low interest rates and buy up farmhouses, barns and land.

But the latest rural land survey admits it remains unclear whether farmers in the county are being squeezed out of the market or if they have chosen to stay away.

The Royal Institution of Chartered Surveyors RCIS todaypublishes results for October to December last year.

The RCIS said the price of land had soared as city-slickers continued to buy up rural retreats.

It said individual non-farmers accounted for 51% of sales nationwide during the final three months of 2003, up from 45% in the previous quarter, while the number of farmers buying more land had fallen to less than 40%.

The group said during 2003 farmland was selling for an average of £7,931 a hectare, 7.3% more than during 2002.

The group said there had been a continual drop in the amount of land for sale, with 55% more RICS members saying they had seen a reduction than those who reported an increase, compared with 38% who reported a drop in the previous quarter.

At the same time the level of sales remained low, with 4,100 hectares sold during the final quarter of the year, slightly up on the record low seen during the three months to the end of September.

There has been a general decline in the supply of land. This has led to prices rising and non-farmers, who are unconcerned about the outcome of changes in the future agricultural support regime, view farmland as a good investment.

Many farmers are biding their time and are awaiting the outcome of the UK's proposals for Common Agricultural Policy reform before pursuing their future business plans, which could include buying or selling land.

Robert Rush, a farmer of Shimpling, near Bury St Edmunds, said: "The market is being supported by non-farmers buying farmland, and the price of land would have dropped fairly dramatically over the past five years had it not been for outside income.

"But farmers get their living from working the land, so people coming in from outside and effectively increasing the value is pretty bad news for those who want to expand their businesses. Non-farmers see this land as an investment, or buy it for the amenity value. For them, it is not an income-generator."

David Card, group secretary for the Stowmarket and Sudbury branch of the National Farmer's Union, said that soaring farmland prices were good for retiring and existing farmers – but they would hit younger couples aiming to start in the industry.

Mr Card said high prices for rural land would benefit those people already farming who could secure money from the banks against the land, giving them money to inject into their businesses. It would also help those farmers coming out of the industry who were able to retire.

Mr Card added that people buying in to farms who did not want to be involved in the day-to-day involvement of farming could also lease the spare land out to existing farmers. They would reap the rewards of farming more land while enjoying better economies of scale.

"The fact land rises have held up will enable those who wish to retire to do so without financial penalty, but there is a slight disadvantage for youngsters having to pay higher prices than they might," he said.

Wil Gibson, Suffolk ACRE's chief executive, said he questioned what people who were not farmers were doing with the rural land they bought. He said if some of the land was being used for keeping ponies for their children then they were issues about the impact on employment in rural villages.

Giles Allen, the RICS rural spokesman for Suffolk, said: "Demand for farmland has increased on the back of improved commodity prices resulting in an increase in bare land sales of 10-15% in the last six months. Residential farms continue to be in good demand with prices strong."

John Jolly, who has run the 400-acre Mangapps Farm, Burnham-on-Crouch for 20 years, said: "There are two sorts of market for non-farmers. One is for odd bits of land to extend gardens, or buy a paddock for a pony, for example. The other is for small farms with a nice house. Farmers are not usually interested in the small bits of land, and are being squeezed out of the small residential farms."

He added that uncertainty over the future of agricultural support had led to agents advising their clients not to market land at the moment.