Duncan Barrie, head of the firm’s agricultural sales centre in Stirling, comments that the stability of prices coupled with the very good weather influenced owners, particularly of livestock and more marginal farming units, to put their property on the market this summer:
The market has expanded and was more active in 2018 than in 2017 for a variety of different reasons but the combination of low interest rates and more favourable opportunities in terms of long-term loans helped to attract a number of buyers who were able to secure finance for a farm or land purchase.
The Ayrshire farm market
The market in Ayrshire has been particularly strong. Many farms attracted a significant degree of interest, with several being sold at a closing date.
There has been a wider variance in the type of buyer this year and we have seen a number of Irish buyers acquiring farms and land on the west coast, along with a large number of existing local famers competing to secure their preferred property. In areas close to major towns and cities, properties are more often sold in lots, with lifestyle buyers seeking to purchase the farmhouse and buildings and the land selling separately. Overall though, many of the farms in Ayrshire sold as a whole.
The rest of Scotland
Demand for farms in Fife, Perthshire and Angus has also remained strong with land prices above the national average, particularly for prime arable land, with some land selling in excess of £10,000 / acre. In East Lothian prices also remain high for prime arable land due to a relative shortage of land being made available for purchase. However, there remains a significant price difference, within most areas, between the most and least productive arable land.
The sale of Mains of Boquhan, in Stirlingshire, is a good example of the strength of the Stirling market this year. The sale offered a rare opportunity to acquire a block of land equipped with an excellent range of farm buildings but also with considerable commercial assets including a shop and office allowing a number of diversification projects. Priced at offers over £1,235,000, the farm sold well at a closing date with a number of bids received.
The demand for more marginal upland hill and pasture land is underpinned by the continuing strong interest in the creation of new commercial woodlands. We have also seen a number of smallholdings within central Scotland being brought to the market offering good value for money and attracting interest from buyers keen to enjoy a rural lifestyle whilst still being within reach of Glasgow, Stirling and Edinburgh.
Reasons for selling
Of those farmers who have taken the decision to sell, many of them have been deliberating about retirement for a number of years, but have opted to retire now, perhaps earlier than first envisaged in order to pursue other family commitments or business interests, as opposed to a risk of being forced to sell due to ill health and other financial pressures which may occur in the future.
2019 farm market
Galbraith expects price stability to continue to be a factor in the next few years:
We anticipate there may be a slight reduction in supply to the market in 2019 driven by continued uncertainty due to Brexit, which will ultimately help to maintain farmland values. We do not anticipate any significant price rises or falls in the coming years but expect land to show sustained and steady growth in the longer term.
In the last 12 months, more than 100 farms and blocks of farmland totalling over 15,000 acres, with a value in excess of £100 million, were marketed by Galbraith in Scotland. The firm is Scotland’s leading rural consultancy, managing and providing advice on farm, forestry, land and estate interests on over three million acres.