Demand for Scottish farmland remains strong and continues to be better value per acre than in other parts of the UK according to the latest market survey from the Royal Institution of Chartered Surveyors and the Royal Agricultural society.
The average UK price per acre during the final six months of 2015 was 10,064, a record high for 11 months in a row. Scottish land prices have grown steadily over recent years, but it remains significantly cheaper to buy farmland here at an average of just 3,625 an acre. It should also be remembered that a broader range of land types have been offered for sale in Scotland.
So what is the story behind these figures? Despite the uncertainty caused by the Referendum and CAP reform, in 2014 English buyers turned their attention to farmland north of the border, where good quality pasture land was at least 64% cheaper than in the rest of the UK. In the past year, fewer farms were sold to English buyers, and this could have been down to a number of factors - not least the sharp downturn in the value of commodities and the resultant lack of confidence in the industry.
We are all acutely aware of the angst over the Basic Payment Scheme but the recent policy announcement by the Scottish Government to pay part of the Basic Payment Scheme and Less Favoured Support Scheme from government funds has helped to ease some of the financial pressure which has been felt in the industry during the early part of 2016. However, cash flows are still under significant pressure in most agricultural sectors. The fact that farmland prices have continued to to hold up well in most areas emphasises the fact that they do not generally follow the trend of the commodity prices, reflecting the attraction of farmland as a stable investment.
We have seen a number of headline sales in some of the prime farming regions of the East Coast such as Angus but, in general, stability is the watchword in farmland values.
Farmland in in Scotland is still available at a discount to the values of England, but potential purchasers from south of the border have been met with strong local and regional competition for farms as successful businesses have continued to expand.
At the lower end of the land ladder, there has been renewed interest in the purchase of land for planting trees which has been stimulated by better grants being made available for commercial woodland creation. The result has been a marked increase in the value of some types of hill and rough grazing land which is suitable for planting.
As a firm, we have marketed more than 132 farms in excess of 26,000 acres of agricultural land with a value of 115 million across Scotland in the past 12 months. Notwithstanding the challenges that farming encounters, the purchase of land in Scotland remains attractive.