Farmland prices exceed £20k in NI county for first time

Average farmland prices have surpassed £20,000 an acre in a Northern Ireland county for the first time.

The overall average for Northern Ireland has hit a record high of £14,736 an acre.

County Armagh topped the annual land price survey by the Irish Farmers' Journal (IFJ) with an average of £20,174.

The survey found top-quality farmland in the county had sold for as much as £28,000 an acre, with almost half of all sales achieving more than £20,000.

County Fermanagh was the only county to average less than £10,000 an acre at £8,867, a fall of 3.5% on 2023 prices.

Land prices are being watched keenly by farmers here, amid concerns that acreage alone will push many over the incoming new inheritance tax threshold of £1m.

The 2024 Northern Ireland average is an increase of almost £1,000 on the average price in 2023.

And that rise came despite the amount of land being publicly advertised for sale also increasing by 21%.

Three counties recorded a rise, 4.2% in Tyrone, 12.9% in Down and 14.6% in Armagh.

Meanwhile, Fermanagh, Antrim (-2.4%) and Londonderry (-1.4%) recorded small falls.

The IFJ survey covers purely the value of bare land, excluding any dwellings, farmyards or building sites.

But Peter McCann from the IFJ team said separate calculations showed the total price paid for such properties equated to £19,140 an acre in 2024, an increase of 5.6%.

He added that existing farm buildings are expected to rise in value in the coming years as "tight rules around planning restricts the construction of new sheds".

The survey found that farmers are the main purchasers in the Northern Ireland land market, with the parcels offered for sale being too small and too costly to attract companies trying to offset emissions.

Land prices in Northern Ireland are much higher than in the Republic of Ireland.

Prices there averaged €12,515 (£10,442) an acre, up 5% from €11,925 (£9,949) in 2023.

News of this increase will come as no surprise to local farmers. 

With 26,000 of them vying for land here, it is always at a significantly higher value than elsewhere in the UK or the Republic.  

But these prices come with an added layer this year – when previously land was seen as a long-term investment for the longevity of the farm enterprise, it now could expose many of the next generation to a heavy tax burden. 

The survey highlights that when adjusted for inflation, land prices in Northern Ireland have actually remained fairly stable in real terms despite rising in actual terms. 

But that will be little comfort to the many thousands of elderly farmers concerned about pressure on their successors, nor to those young farmers now questioning their future in the sector.

Cormac McKervey, the Ulster Bank's head of agriculture, said that "the very fact that there is such limited availability that when land does come up it can meet a very strong demand".

Speaking to BBC News NI, Mr McKervey added that "of all the land that could be sold in NI every year there's probably less than half of one percent that's actually for sale."

"There's also added competition from non-farming interests that are trying to buy land as well, and that can force land prices up.

"There's a whole host of factors come into it but by far the biggest one is just the lack of supply."