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Increasing demand for farmland drives up prices

By Garry Best

They are not making any more of it," is the common phrase land agents hear from sellers and buyers. That is the critical element setting land apart from the residential and commercial sectors, due to the finite supply of farmland, building sites and development land.

On a price per acre basis, the southern half of Northern Ireland is considered one of the most expensive for farmland in the UK.

Good quality farmland in the area regularly sells at £12,500 an acre on average, with land of exceptional quality often reaching £15,000 or £16,000.

With a limited supply in the Warrenpoint area, three separate holdings in 2016 there all averaged more than £20,000/acre. The increased supply of land listed in 2016 has not reduced values and the majority of buyers are currently from the non-farming sector.

As the quantity of farmland coming to the market has increased in recent years, the landscape - in terms of land sales - is changing in Northern Ireland.

Once landowners were 'custodians during our lifetime' with land passed to the next generation, but increasingly, younger families approach us to discuss the potential sale of their farms, so that they and their families can reap the benefit in their lifetime.

And many from the business sector are ready to buy. As businesses grow post-recession, they often see land as an outlet for their wealth. In taxation terms, there are significant inheritance tax benefits which factor here too but buying land is a unique combination of 'heart and head'.

Many business owners are only a generation or two from farming backgrounds, which drives the desire to own their own land.

We also see building sites continue to gain momentum as buyers grow in confidence and ambition to build sustainable (and more often carbon neutral) home.

Rural sites still range from £35,000 to £60,000, reaching £75,000 to £100,000 if they skirt urban areas and climbing to £250,000 and upwards for sea view or shorefront site in the Rostrevor and Warrenpoint areas.

Only in the past 12 months are there signs of interest from the construction sector, with builders enquiring about one-off sites, as an opportunity to 'spec build' new homes where development land is not readily available in towns. This limited availability of residential development land, particularly in greater Newry, has seen small but significant transactions in the past 18 months.

Lotus Homes, having enhanced its reputation in the Banbridge area in the past five years, has in the past two months begun construction on Hill Crest Village - 250 Residential units off the Millvale Road in Bessbrook - with prices from £140,000 for three bed semi-detached homes.

And in Warrenpoint a local developer recently acquired 13 acres for a new business park on the Upper Dromore Road, a useful addition to the existing Milltown Industrial Estate, which has very little remaining available space.

Garry Best is a member of the RICS (Royal Institution of Chartered Surveyors) and managing director of Best Property Services

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