FARMLAND prices in the second quarter of the year saw the biggest rise on record.

Nationally, they rose by nine per cent, compared to the same period last year, with sales activity up 77 per cent to a near four-year high.

Key reasons were farmers receiving their Single Farm Payments and Irish farmers buying cheaper UK farmland.

The Rural Land Market Survey, conducted by the Royal Institute of Chartered Surveyors (RICS), said demand greatly outstripped supply in residential and non-residential farmland.

Sue Steer, RICS spokeswoman, said: "With Irish land being sold for residential development, Irish farmers are taking advantage of relatively cheap farmland in the UK."

David Coulson, RICS North-East rural spokesman, said good demand for most types of land in the region heralded a buoyant market.

The average land prices per hectare in the second quarter were arable £6,796 (UK average £7,639) and pasture £4,572 (UK average £7,139).

Mr Coulson, of Broadley and Coulson, of Crook, County Durham, said with the Single Farm Payment being more area-based, many farmers wanted to expand and farm extensively.

The survey did not include areas of less than 12 acres, which have sold well in the North-East for between £5,000 and £10,000 per acre.