Farmland remains scarce and prices stable in Aberdeenshire and Angus – for now.
However, a leading land specialist has predicted the likelihood of a significant turnaround in land values and availability if post-Brexit agricultural support policies prove unpalatable to the farming industry.
Savills rural director Rory Galloway outlined recent rural market trends to property professionals in Aberdeen.
He pointed to hot spots this summer such as class 2 arable land in Fife which sold at £16,000/acre and a block of bare grade 3(1) land in Angus making in excess of £14,000 at a competitive closing date.
Mr Galloway said there was significant demand in specific hot spots, driven by the top quartile of farmers for whom expansion is the principal driver for purchase.
He added: “However, buyers no longer hunger after additional acres at any cost.”
Pointing out that the Scottish Government is still to reveal how farmers are to be supported or subsidised post-2024, Mr Galloway said no matter what came “down the line”, he anticipated there would be a proportion of farmers who will not have the appetite for a fundamental change in policy and that, in turn, would feed the supply chain.
He added: “It is our expectation therefore that if supply increases significantly, the values of arable and grassland may come under pressure and we are likely to see land values soften.”
Mr Galloway pointed out that only 21,000 acres of farmland were marketed publicly in Scotland in the first nine months of 2019, a decrease of 49% on last year.
On average, prime arable acres are trading at £7,940/acre, an increase of 3.8% on 2018, while across Great Britain this quality of land saw values decrease by 0.5%.
The Scottish estates market has also seen a reduction in supply, although there are 12 estates on the open market with a total asking price of £59 million.
Mr Galloway said: “We believe there will be an increasing number of occasions where land once deemed only suitable for sport will be repurposed for another use, whether that be forestry, renewables, conservation, tourism projects or natural capital.”
He added new buyers were emerging in the forestry market, offering prices ranging from £2-3,000/acre, dependant on the percentage of land within a landholding that is potentially plantable, restricted by factors such as peat depth and landscape designations.