DEMAND for farmland in the Yorkshire and Humber region fell sharply in the third quarter of 2002, according to the latest rural land survey from RICS.

None of the surveyors who responded in the region reported a rise in demand, while 44pc reported a decline.

Nationally, farmland prices have stabilised following a sharp rise at the beginning of the year.

The survey shows the price of land per hectare rose from £7,651 to £7,801 in the last quarter, although this is still below the price at the beginning of the year.

Although more land is up for sale now the last of the foot-and-mouth restrictions have been lifted, prices have held up as supply remains tight, with demand stronger nationally than in the same period last year.

Farms with good farmhouses are benefiting from the residential property boom and are selling well. Nevertheless, bare land prices have picked up sharply, rising by 9pc over the year to stand at £6,303 a hectare, the highest figure since the first quarter of 2000.

Looking ahead, chartered surveyors are not confident that prices will continue to rise, with only 13pc expecting them to do so, and 43pc expecting them to fall.