Garry Best, Director of Best Property Services, has conducted a recent survey of farm land which compares land sales in the 1990s to 2015 to illustrate the changes a quarter of a century can make to the price of an acre.
The survey showed that land has experienced an almost 700% rise in the average per acre cost since the 90s.
Then the average price per acre was £1,900 compared to £13,000 per acre in 2015* - an average annual rise of approximately £450 per acre per year.
The increase in Conacre rental income has not been as significant as land values rises, with a 50% rise over the same period. Conacre rates in 1990 were set at an average of £95 per acre compared to £140 per acre for good grazing land in 2015.
Garry Best says: “As land agents we often hear comments that, ‘I should have bought more of it 20 years ago when I had the chance, but didn’t realise it was such good value then.’ It’s hard to imagine agricultural land being worth £40-70k per acre by 2035 but in 1990 we would hardly have imagined the 700% growth in the cost per acre that land is currently fetching.”
The highest individual price achieved in 1990 was £2,960 per acre and 2015 that figure soared to £17,000 per acre –in both cases those land sales included farmhouses which would have added value to the agricultural price per acre.
“Apart from a three year gap in 2007-10 when farmland prices dropped, our figures show that land in NI has risen steadily during the past 35 years”, Garry said. “This has been driven in the main by limited supply combined with strong demand from the farming and business sector.”
“This year to date, many of the land purchasers we’ve dealt with have been from business, or non-full time farmer category and therefore less dependent on farming income to fund land purchase. Agricultural Land is still an attractive asset to hold for those needing to take full advantage of reducing their Inheritance Tax liabilities.
The indicators would suggest that land value will continue to rise steadily upwards over the next five years,” Garry added.
*figures are based on the first ten farms sold (over 10 acres) in both 1990 & 2015.