Demand for land in Britain from Irish and Russian buyers has pushed the price of farmland up by one-third during the first three quarters of this year.
The price of land there is now 33 per cent higher than it was during the third quarter of 2006, the highest annual growth rate since 1977 when it briefly hit 40 per cent.
According to the British specialist farm sales estate agents, Knight Frank, land prices jumped by 10 per cent during the three months to the end of September last to leave the average cost an acre at £4,178.
As in Ireland so called "lifestyle" or hobbyist purchasers now make up the largest proportion of buyers in the sector, accounting for 38 per cent of all purchasers during the third quarter of the year.
"But, at the same time, overseas buyers continued to stoke demand with the Irish, Russians and other northern Europeans looking to buy up land in the UK," said a report from the company last week.
"The market has remained strong despite the increasing cost of debt, global financial uncertainty and outbreaks of foot and mouth disease and bluetongue," said Clive Hopkins, head of farms and estates at Knight Frank .
He added that while demand had risen by nearly 12 per cent year-on-year, supply had failed to match this, increasing by just 3 per cent.
He predicted the the "lifestyle" buyers will remain dominant in the market, but that the credit crunch impact on city bonuses and incomes and on the London residential property market generally would see a slowing in the number of lifestyle purchasers over the next two years.
The price of land in Ireland is six times more expensive than in Britain and thirteen times higher than in France. A recent survey carried out by Savills HOK, the auctioneers, found that the average price of land in Ireland is €23,600 per acre.
Geraldine O'Callaghan, a property business consultant, said there were many factors accounting for the dramatic increase in agricultural land prices here. Writing in Off Farm Investor News she said these included CPO, rezoning of land and "lifestyle farmers" acquiring small tracts of land in key locations.
"The sale/CPO of these lands leave the vendor in a very strong cash-rich position [ with] some off-farm investments further fuelling the spiralling upward prices," she wrote.
"The chronic lack of supply and demand from non-farming buyers only serves to perpetuate the cycle leading to further land price increases," she continued.
"A lot of farmers are turning to investing in farmland and farming enterprises outside of Ireland; places like the UK, Argentina and eastern Europe are shaping up to be commercially viable alternatives," she said.
The Irish Farmers Journal reported land sale prices of €25,600 an acre for land in Mayo this week and €26,100 an acre for land near Mullingar and the sale of a Co Meath non-residential farm of 90 acres making more than €1.75 million.