IN spite of a fall in farmland values nationally, farmers in North Yorkshire "are generally hesitant about committing to sell and are watching and waiting. Despite falling incomes and poor prospects, lenders are still very competitive."

That is the regional Yorkshire and Humberside view expressed by Giles Bilton of rural estate agents Carter Jonas in Harrogate for the Royal Institution of Chartered Surveyor's latest quarterly report.

The RICS records a fall of 3.3 per cent in farmland values and concludes that the continuing problems of agriculture in Great Britain are beginning to be reflected in overall land prices. The average price fell from £7,543 per hectare (£3,407 per acre) in the first quarter of the year to £7,295 (£2,947) in the reporting period.

Despite the downward trend, this quarter's values are only one per cent down on the same quarter of 1999, but this had been supported by a low level of available land and high prices for land suitable for residential development. The trend in bare land prices has been downward since 1997.

With an increase in available land and a general slowdown in the residential sector, chartered surveyors remain pessimistic over the outlook for prices in the coming year, with a net balance of 76 per cent expecting falls in rural property values.

A balance of 25 per cent of surveyors report demand slowing in the arable sector, compared with 10 per cent reporting a rise last year. The beef/sheep sector struggled on, with a balance of 54 per cent of surveyors reporting lower transactions. The dairy sector recorded a negative balance of 63 per cent, compared with 52 per cent in the first quarter.

The one area to buck the trend was the residential farm sector, with a balance of 50 per cent of surveyors reporting a rise in demand, but even this was down from the 77 per cent reporting a rise in June 1999.