DEMAND for farmland has fallen for the first time in more than two years, according to the Royal Institution of Chartered Surveyors' rural land survey.

Farmland prices have also slipped back for the third annual quarter, an annual fall of one per cent, though the price of bare land continues to rise and there is a niche market.

Jasper Fielding, of Strutt & Parker's Moreton office, said: "The market is still dominated by a lack of supply which is keeping prices high."

Matthew Peters, of BK in Gloucester, said: "More realism is creeping into the market place. Overpriced properties are remaining on the market for a longer period of time or until a relaunch at a lower price.

"Land values are still holding if in the right place as are small areas which are still achieving high values to the horseyculture set."