Small increase in Scottish land but supply still short

The amount of Scottish land offered for sale rose finally this year after several years of relative drought.

However, the supply/demand ratio still remains significantly out of kilter, with a spate of recent development land sales driving substantial new interest in farmland, and some buyers looking to reinvest up to 5m.

But, according to Strutt & Parker, by the end of September, the acreage available still amounted to only 66% of the volume seen in 2002. Also, because many of the holdings brought to the market were larger hill units, the number of farms available remained limited.

The sale of Swinside, a 1133-acre hill farm near Jedburgh, was completed this week after attracting no fewer than 20 offers as a whole.

It was sold for a figure about 25% above its guide to an individual thought to be buying for inheritance tax and investment purposes.

A farmer was the underbidder.

“The frustration of buyers lies in the fact there are not enough quality farms with at least 600 acres coming to the market,” said Mr Smith.

Savills said 90% more land (37,000 acres) was publicly marketed in the first nine months of this year compared with 2004.

Significant increases are noted in the Borders, the Highlands and Tayside.

Despite the apparent strength of the market, there has been some caution on pricing openly marketed properties.

The company’s latest farmland values indicates that the average value for all types of farmland in Scotland was static during the first half of 2005, compared with a 4.7% rise in England.

But this followed a meteoric 22% rise in average values in the second half of last year, to an average 1680/acre.

Savills expects the market to remain subdued into next year.

“The word we are using to describe current values is ‘unsustainable’,” said agent Ruaraidh Ogilvie.

“The range of prices offered for similar land demonstrates an enormous variation in the perception of the future for farming.”

In Lanarkshire, however, Lawrie & Symington has also suffered from the dearth of well-equipped farms.

“The accommodation land we have sold has gone very well,” said the firm’s Robert Smellie.

He values better land between 1600 and 2500/acre, up from 1400-2000/acre 18 months ago, citing continuing demand not only in central Scotland from residential purchasers, farmers and rollover cash, but also from Northern Ireland.