Scottish farmland values are rising at a faster rate than elsewhere in Britain, with demand for land proving extremely strong, according to new research.
Analysis of data from the past 12 months shows unprecedented levels of interest in farmland in Scotland during 2021, research by Strutt & Parker shows, resulting in a robust upwards movement in prices.
Arable land values varied greatly depending on location and capability, with an average value for prime arable land at around £7,000/acre, up from £5,800/acre in 2020.
However, arable land in East Lothian reached record-breaking levels for Scotland in 2021, peaking at £19,500/acre, with strong values for prime arable land seen elsewhere on the east coast.
Strutt & Parker says this part of the market is being somewhat underpinned by farmers with rollover money to invest, especially in areas of proximity to expanding settlements.
Over the past two decades, the value of prime arable land has increased by up to 550 percent, the property consultancy's research shows.
The price of pasture land with afforestation potential also continued to increase in 2021 because of demand from forestry buyers responding to the increasing value of timber and other green investors looking for land with carbon-capture or rewilding potential.
Rough grazing or hill land that is suitable for tree planting achieved prices of between £2,500/acre and in excess of £5,500/acre, compared with £200-£2,000/acre for land unsuitable for forestry planting.
Diane Fleming, farm agent for Strutt & Parker in Scotland, said: “Farmers are still the main investors in farmland in Scotland, but newer entrants such as forestry, ESG and lifestyle buyers are increasing.
"This has resulted in rising competition in a market where demand already outstrips supply.”
Analysis shows that over 80% of the farms publicly marketed had found a buyer by the end of the year, with competitive bidding at closing dates resulting in prices above the asking price being achieved for most sales where information is available.
The amount of farmland which came to the market was 27,300 acres, which is significantly higher than in 2020, but still below the five-year average.
Looking forward, Ms Fleming said the supply of farmland to the market was likely to increase, with some farmers considering retiring early.
This was in part due to policy changes facing the agricultural sector, but also due to the strength of the market and the high prices being paid.
“We forecast that the supply of farmland to the market will continue to grow, that demand will continue to outstrip supply and that buyers from abroad will return," Ms Fleming added.
"In recent months we have spoken to several potential purchasers from abroad who are interested in buying farmland in Scotland.
"We expect them to become more active in the market as Covid-19 restrictions are eased further."
