The current momentum in land prices is predicted to continue for the rest of the year as the lack of supply of good quality land remains an issue, according to a land market report.
The new report by Sherry Fitzgerald says dairy farming continues to show “strong signs of growth and with this comes the need for grazing lands which will subsequently increase demand for land either through letting or sales.”
Its agents reported a notable pick-up in activity in the final quarter of last year along with an improvement in buyer sentiment, relative to the rest of 2020 and 2019. “Poorer sentiment had hampered the market for much of 2019 due to Brexit concerns and beef protests.”
Land prices had fallen by 3pc in 2019 as poor sentiment impacted the market and the downward pressure continued in early 2020 with the outbreak of Covid and health restrictions came into force.
However, an easing of restrictions during the year led to solid price growth as “depleted stock levels and pent-up demand raised values”. Prices increased by 1pc with the increase evident across much of the country, the report states.
Across the 12 months of the year, growth was strongest in the mid-west and south east, but other regions noted a very marginal fall in value, less than 1pc in the year, expect for the border region, where steep declines earlier in the year saw values decline at stronger levels.
Covid lockdown, it says, has hampered the supply of land, with a third of its agents reporting a decrease in supply on the previous months.
Prices for grassland, it says, saw strongest increases in the south east, with prices up 2.1pc, while the mid-west and south-west saw some minor growth, but prices in the mid-east and midlands saw prices decline in 2020. Arable land, it says, did not perform as well as grassland, when it came to prices paid.
But, in the final quarter of the year both prime and marginal grassland values increased by 1.3pc, the strongest quarterly growth since 2014. On the back of this, prices for prime grassland over the course of the year were up 0.7pc.
Strongest price growth was seen in the south east last year, with prices up 2.4pc in the region, while prices in the mid-east and mid-west were up 1.3pc and 1.1pc respectively.