If I hadn't quite realised just how literally the credit had crunched over the past couple of years, I did once I'd met Ian Bailey. "You wouldn't believe the price of Hobnobs in the Republic these days," he said, slipping a fresh packet into his rucksack as we met in the small coastal town of Newcastle in Northern Ireland to walk a section of the Ulster Way.

A former supermarket manager, Ian recently moved to Northern Ireland from Devon after marrying a local pharmacist, and now earns his crust as an outdoor activities guide.

For UK visitors, Northern Ireland is currently a much more cost-effective holiday destination than the Eurozone and, for visitors from the Republic, it's both easy to get to and a bargain.

The Ulster Way is a 665-mile circular walking route created by rambler Wilfred Capper in the 1970s. It linked the region's best-known sights and youth hostels, and was once the longest waymarked trail in Britain and Ireland. Over the past few decades, however, access rights and transport developments had seen the way badly lose its way.

Until now. Last month, after a long campaign by the local environment agency and the Ulster Way Advisory Committee – and a huge amount of work putting up new signs and negotiating land rights – the Ulster Way was relaunched, albeit in a marginally shorter 625-mile version.

Taking in the Giant's Causeway, Cavehill, the Cliffs of Magho and the Sperrins among other highlights, the new route has been designed with practicality in mind.

"With the old Ulster Way, people would have done the whole route – and you can still do that – but we've divided the new route up into what we would call quality sections and link sections," said Chris Scott, from the Countryside Access and Activities Network, which is in charge of promoting the new route.

"The quality sections are mainly off-road stretches, with good access and signage, while the link sections are mainly along roads. In the old days they would have been quiet roads, with maybe the odd tractor or car passing, but now they're busy routes with 50 lorries a day on them. Maybe 10% of people walking the new Ulster Way will want to do the whole thing, but we've designed it so that if you'd rather just do the quality highlights you can use public transport to skip the link sections. It's all about quality."

The plan is to keep improving, or in some cases diverting, the link sections so that they, too, become quality sections over time.

I made my way to Newcastle, an hour's drive south of Belfast, to follow a two-day quality section of it, the 26-mile Mourne Way.

It takes its name from the Mountains of Mourne, a brooding mass of hulking purple-grey shadows that loom sharply over Newcastle, and one reason why this is already a very popular trail is that you get the feeling of being in the mountains without doing too much climbing. The path mainly skirts the steeper slopes (including 850m Slieve Donard, Northern Ireland's highest peak), giving access to great views without a huge amount of effort.

Within 20 minutes of leaving Newcastle's seafront Ian and I were up among the mountains, looking out over dry-stone walls across the White Plains. A series of wild, windswept valleys, they looked majestic with the sun softening their rough edges, but this kind of empty landscape quickly turns bleak in bad weather.

The Mourne Way never lingers in one setting for too long, though. The next section of the walk was much more sheltered, taking us downhill through Tollymore Forest Park along sun-dappled tracks to Altavaddy Bridge, a pretty stone arch that straddles the Spinkwee river. Just downstream from here is the "meeting of the waters", a dark, cool spot surrounded by mossy tree roots and sprouting tendrils of foliage where the Shimna and Spinkwee rivers join. It's a magical place, the sound of water lazily stumbling over rocks and bouncing off soil echoing among the trees.

Crossing giant stepping stones, we decided to make an impromptu detour from the path to see the Hermitage, a nearby folly. This series of cave-like rooms was built in the 1770s by the Earl of Clanbrassil. Designed to provide shelter female visitors while their husbands fished for salmon, it now looks like an ivy-clad hobbit hole.

Returning to the trail we left the forest park behind to follow gorse-lined lanes past little stone cottages, pretty farms and the odd seven-bedroom bungalow. Continuing on into wilder terrain, we stopped for lunch at the foot of Luke's Mountain. Below us was a long dry-stone wall and the odd sheep but behind us a bank of mist tumbled over the top of the mountain giving the effect of a bubbling cauldron.

In this rough country it came as a shock to see a smartly dressed couple suddenly emerge from the gloom. They struggled down the mountainside, the wind tugging at their clothes: the man was wearing a suit and the woman was hanging on tightly to an elaborate hat.

In the forest park we'd seen day-tripping families, groups of mountain bikers and lone dog walkers but apart from this well-dressed couple we didn't meet a single person on the rest of the hike. This is something Ian hopes will change.

"You've got Keswick in the Lakes, Aviemore and Fort William in Scotland, Llanberis in Wales… and I'd love it if Newcastle became Northern Ireland's outdoor activities capital in 10 to 15 years' time," he told me, as we edged round the mountains to Fofanny Dam reservoir and picked our way slowly over the tussocky grass of Happy Valley to Spelga Pass, the end of the first day's walking. "There are already a lot of outdoor centres here, and you've seen how Newcastle, which is in the centre of it all, gives really easy access to the mountains and great coastline."

The strength of the euro explained why, when we arrived at the Cnocnafeola Centre in Atticall, our hostel for the night, we found a large group of Dublin bankers settling in for the night. It wasn't just the price that had drawn them, though. A community project run by the indomitable Mairead White, Cnocnafeola is the homeliest hostel I've ever stayed in. En-suite rooms come with hot showers, pretty bedlinen, guest slippers and, if you want one, a bedtime hot water bottle. But it's Mairead's motherly welcome, and her delicious home cooking, that are the biggest selling points.

Back on the trail, as I hauled myself up Slieve Moughanmore, I was very grateful to have Ian with me. Though most of the route is clearly signposted, there was a low thick mist that morning and we were forced to resort to compass reading to find the path (though, as Bailey pointed out, there are roads in every direction in the Mournes, so you can't get too lost).

Following our bearings, we tramped slowly through another of the walk's mountain sections, a clichéd Irish terrain that incorporated ankle-beating tussocks, bouncy sphagnum moss, peat bog and face-lancing drizzle. The hardship was soon forgotten that afternoon, though, when the sun reappeared and we strolled through a lovely wide open valley laced with Scots pine and on into wide tracks through Rostrevor forest.

The walk ended with a long gentle descent into the coastal town of Rostrevor, sunbeams casting torch-like patterns on Carlingford Lough ahead of us. As we came to our final halt, I remembered Chris Scott's parting words. "My job is to stop people going to the Giant's Causeway for the fifth time," he'd said. "Four times is fine but if we can get them to explore everything else there is to do in Northern Ireland so much the better."

If the rest of the Ulster Way is as impressive as the Mournes, he shouldn't have too much trouble.

Essentials

For more information, downloadable maps and route descriptions of walks in Northern Ireland, including the Ulster Way, see walkni.com. For more general information on Northern Ireland see discovernorthernireland.com.

Rhiannon Batten travelled from Stranraer to Belfast with Stena Line (08705 707070; stenaline.co.uk). Return fares start from £50 for foot passengers, or from £178 for a car and two people.