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The average price paid for agricultural land in NI stands at over £10,000/ac for the first time, the Irish Farmers Journal can exclusively reveal.
Our annual survey of land sales covered 4,543 acres across NI during 2018 and found that the average price paid for land came to £10,182/ac, up 4.4% on the 2017 figure.
With the average land price in NI increasing by 8.0% during 2016 and reducing by only 0.6% in 2017, the latest findings confirm that uncertainty surrounding Brexit continues to have no impact on the agricultural land market in NI.
Over the nine years that NI has been included in our annual Agricultural Land Price Report, the trend is generally upwards, and the land market remains substantially ahead of where it was in the early 2000s.
Compared with records that were previously kept by DAERA, average land price in NI has more doubled since 2002 when it stood at £5,043/ac.
Auctioneers across NI report that farmers were more active on the land market during 2018. In previous years, business people that were investing in land for inheritance tax reasons, and farmers with off-farm income, were driving the market in many areas.
Armagh continues to be the most expensive county in NI to buy land, with the average price up 3.7% last year to £13,829/ac. When converted into euro, Armagh is the second most expensive county across Ireland at €15,631/ac, with Dublin in top spot at €21,938/ac.
Tyrone has moved into second place in NI rankings at £11,116/ac and had the sharpest increase across NI, with prices up 10.9% year-on-year. Average prices increased by 2.3% in Down to £10,288/ac and were up by 6.6% in Antrim last year to £9,863/ac.
Derry and Fermanagh both recorded decreases in average land prices during 2018, with figures back by 11.2% and 13.1%, to £8,757/ac and £7,119/ac, respectively.
The land market in NI remains significantly ahead of the Republic of Ireland (ROI), with the gap between the average price in NI and ROI widening slightly during 2018 to €2,437/ac, up from €2,421/ac in 2017. Overall in ROI, the average land price dropped marginally by 0.2% last year to €9,072/ac.
Banks
Meanwhile, the Irish Farmers Journal has learned that local banks are coming under increased pressure from financial regulators to prove that land being bought is value for money.
Some banks in NI already require land to be valued by an accredited surveyor before a loan is taken out. However, with the land market rising and money being borrowed to cover high land prices, it is understood that all local banks will have to follow suit in the coming months.
Land that is already owned by a farmer and is put down for security against a new loan will also need to be independently surveyed to ensure the collateral value is accurate. One local banker indicated that all farmers taking out new loans, or getting a significant increase to existing loans, will have to have land assessed by a professional valuer.
It ultimately means that farmers will have to pay for the service, either through a direct payment to the valuer or else as part of interest rates to the bank. It is understood that a valuation of an average-sized farm can cost upwards of £500.
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