Scotland: strong but specific demand for land

Four types of property in Scotland were flagged by Strutt & Parker this week as likely to continue to attract strongest demand in 2013.

The year could nevertheless see some stabilisation in terms of land values, which have doubled in the past six years, Strutt & Parker’s James Butler told a seminar in Edinburgh.

Good arable land is seen as a sound investment, often by non-farming buyers, as are hill units – either with tree planting or renewable energy potential that can provide substantial and steady income as well as tax benefits.

For commercial farmers, still the biggest buyer group, economies of scale are key, Mr Butler said, resulting in demand for both extensive units and blocks of adjacent bare land.

Finally, a lack of subsidies available for constructing farm buildings has made well-equipped farms more popular.

Restricted bank lending and the uncertainty that CAP reform brings with it will curb demand, he concluded, but there was still no sign of supply increasing.

“Buyer selectivity certainly won’t make land any easier to value but you will still get five figures for an acre of the right land,” he said.

Almost 35,000 acres were offered for sale in Scotland in 2012, 19% more than the previous year and the highest volume for five years, according to Smiths Gore research. Bare arable land values rose by 17% to £5,850/acre and bare pasture land by a more modest 1% to £3,450/acre, while the average price of equipped land remained unchanged at an average of £6,250/acre.