Regional outlook: NI land market sparse as producers ride out farmgate price slump

Land values in Northern Ireland are holding up, despite the province’s livestock-dominated farming industry falling on hard times.

Forced sales are not expected however, and agents say banks are choosing to support farming customers for the meantime. 

Farms with quality land and at a commercial scale are in short supply, while there is far more availability of parcels that are 10-20 acres.

With fewer house-building projects under way, the influence of rollover funds is not as it once was, but large-scale infrastructure work could have a role to play in the 2016 land market.

This is the final edition of our regional round-up series.

Garry Best, Best Property Services, Newry

• In the second half of 2015 we sold a couple of good 60-70 acre farms but we only get three or four of those a year. A lot of what we’re selling is 10 or 20 acres. 
• What we noticed last year was that dairy sector profitability has been hit but that it hasn’t brought the price of land down with it. Good farms last year were selling for £12,500/acre.
• Where there has been a business interest we have seen strong prices – we sold 70 acres with development potential on the edge of a town for £28,000/acre.
• We don’t expect to see forced sales as a result of lower profitability. We have found that during difficult times, farmers are resilient. A lot of banks are in quite deep with the larger dairy farmers and they would rather extend the borrowing than pull the rug out from under their feet.
• Progressive farmers still want to expand but land has to be on their doorstep and that’s been more obvious in recent times. Land is most in demand is north west of Derry and Omagh but if you go another five miles to Gilford or Banbridge area there’s not the same demand. 

Columb Henry, R Benson & Son, Coleraine

• In the past 12 months sales have been quite steady – we’ve sold a couple of farms at 130 acres, which is quite large for the area.  
• Many farms are in bad shape so banks are a bit reluctant to fund purchases so I would expect this year to be slow, but farmers have not been forced to sell yet. We expect the banks to be sympathetic to businesses for the next year to see how the milk price goes.
• There are a couple of major road schemes under way which will have some displacement compensation for those affected. Valuations are at £10,000/acre for that. For development land for housing, it is £100,000/acre, but sales for development are proving to be scarce.

John McIlraith, HA McIlraith & Sons, Coleraine

• In the past six months, farming has been on its knees and that’s starting to affect the land market. There’s not a lot of land changing hands because there are not so many buyers with funds.
• I think it will be slow in 2016 – last spring we were selling farms quite easily but after that things became more difficult. During the property boom around seven years ago there were lots of buyers with rollover money but that’s pretty much gone now. The buyers that we have left are genuine farmers.
• In a year we usually sell about 12 farms of various sizes. The average value is roughly £7,500/acres for good, versatile cropping land. Location, land quality and good access are all important to buyers. 
• A few years ago we had a number of farmers selling up and going to Scotland where they could double their acreage but with Scottish prices increasing that isn’t happening anymore and we also don’t get English farmers coming over here to buy.

Dan Flynn, Thomas Orr, Newtownards

• The supply of smaller parcels of land is not plentiful but demand for it is very good. We haven’t been blessed with quantity of bigger farms and demand is very much location dependent.
• A lifestyle farm could sell for as much as £25,000/acre but for the larger lots of land, we have just sold 40 acres for £10,000/acre where there were two bidders. The feeling is that prices will stabilise and maybe rise a little bit now that BPS has been resolved and there is a bit more predictability in the market.  
• We get a lot of farms that need money and work invested and neighbouring farmers will always be interested in buying those propositions. Anything we get would just be blocks of land rather than those with buildings.