Scottish land price rises further in late 2013

Scottish farmland prices rose by an average of 7% to £4,262/acre in the latter half of the year, according to the Knight Frank Scottish Farmland Index.

Overall, values rose by 11% during 2013, taking 10-year growth to 220% and outpacing the rise in value of English farmland. Sixty-two percent of buyers came from Scotland and 33% from England and Wales.

Knight Frank saw strong interest in Lochmailing, a livestock unit in Dumfries and Galloway launched last autumn.

James Denne, head of farm sales in Scotland, said there was still confidence in the farming sector from investors and agricultural businesses.

“We have had a lot of enquiries from farmers, mostly Scottish, but also some from England, looking either for a standalone unit or as an addition to their current holdings.

“One prospective buyer was also considering returning it to a dairy unit, which suggests that confidence in milk production is returning.”

There was also competitive bidding by farmers for two 110-acre blocks of arable land in Fife that fetched between £7,000 and £8,400/acre.

However, not all sectors of the market are growing at the same rate, said Michael Ireland, head of Scottish farm valuations.

“There is definitely continuing strength in the arable sector, particularly for the best soil, but a softening of growth in the more marginal stock and grassland areas is giving rise to a more diverse market, both geographically and between productive types within the same locality.”

For example, the second half of 2013 saw the average value of prime arable land and average arable land rise by 10% and 7% respectively, while improved permanent pasture and hill ground rose by 4% and 2%.

This could be partially due to the higher levels of uncertainty regarding the future level of subsidy payments for livestock farms, suggested Knight Frank.

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