Scottish land market bucks the trend

The market for farms in Scotland is bucking the trend in the commercial and residential sectors, with demand staying strong despite a greater awareness of vulnerability.

“I would still stand by the view held in May that buyers outnumber vendors by 30 to 1,” said Anders Kennedy of Strutt & Parker.

Apart from 1800 acres launched in three holdings in the past week, including a dairy farm in Aberdeenshire through S&P, little has come to the market this year. As in England, agents are being called out to look at farms, but potential vendors are rarely committing.

In Scotland, values rose by just over 8% during the second quarter of 2008, with average arable land growing 13% to £4700/acre, according to Savills research. Only 14,000 acres were publicly marketed in the first half of this year, 39% fewer than the same period in 2007.

Savills has a number of instructions for September, including a beef finishing unit, a mixed livestock farm and an arable holding. The firm has received offers for two it put on the market earlier this year – the Duke of Roxburgh’s 394-acre Marchcleugh Farm at Jedburgh, and Faughhill, with 400 arable acres at Melrose. They were guided at over £1.775m and £1.1m, respectively.

“Demand for good commercial farmland is still strong, mainly because of lack of supply,” said Savills‘ Anna Thomas. “Demand for smaller units is starting to cool because they are fundamentally unviable, although anything with arable acres and the larger stock farms are going well.” However, buyers were being more cautious, she added.

Farms with between 150 and 200 acres had been supported by Irish interest and amenity buyers, but their numbers had fallen, she said. “The latter may be struggling to sell a house, or to borrow money.”

roshven farm 
The Scottish land market is still strong, despite fears over a worsening economy. Roshven Farm (pictured) sold for more than its £915,000 guide. The number of acres coming to the market is still far below the levels seen last year.

Strutt & Parker has also recently seen two farms go under offer within a month of marketing. Easter Clatto in Fife with 200 arable acres and planning permission for a farmhouse found a buyer willing to pay above its £850,000 guide. “Interest was from local farmers and Irish buyers,” Mr Kennedy said.

Roshven Farm, with 170 acres at Lochailot, Inverness-shire attracted over 50 viewings and also went for more than its £915,000 guide. This time, lifestyle was the attraction it offered a stunning location, holiday cottage business and beaches. “The market was telling us that this sort of buyer had disappeared, but we saw lots of them,” said Mr Kennedy. Calroust, with 1955 grazing acres near Kelso, valued over £2.25m, is also under offer.

In Aberdeenshire, John Rhind of Aberdeen & Northern acknowledges that the market is less clear, but he has diverse farms and estates on his books, including Straloch, a fine house with land north west of Aberdeen. It is on the market for the second time in the past few years, this time with 200 acres and a guide price of over £2.8m. The firm is shortly to market another 200-acre estate, and has a trout fishery on the market.