The ongoing concern of increased tree planting on farmland across Scotland has been highlighted in new data from land and property specialists Strutt & Parker.
In 2022, Scotland saw a rise in the number of hill farms marketed as farmers sought to capitalise on the high prices being paid by forestry and environmentally motivated buyers.
Analysis of data from Strutt & Parker’s Spring Farmland Market Review showed that 24 hill farms came to the open market in Scotland, compared with 11 in 2021 and just nine in 2020.
The value of land suitable for afforestation also peaked during the first half of the year, reaching in excess of £8,000 per acre in some cases.
However, the firm did say that prices cooled in the second half of the year due to a change in carbon credit rules and supply, and because some buyers had spent their budgets by that point.
Record-breaking prices of well in excess of £20,000 per acre were paid for some arable land on the east coast, with average value prime land in that area coming in at £9,500 per acre.
In the Highlands, an average of £4,500 per acre was paid compared to £16,000 per acre in the Lothians.
The average price paid for grass leys increased from £3,500 per acre in 2021 to £4,000 per acre in 2022.
‘Some farmers have been tempted to take advantage of premium prices from forestry and natural capital buyers’
Diane Fleming, farm agent for Strutt & Parker in Scotland, said: “Hill farms accounted for 27% of the farms on sale in 2022, when they usually make up between 10-20% of farms. This signals that some farmers have been tempted to take advantage of the premium prices that have been on offer from forestry and natural capital buyers.
“Our data shows that values for land suitable for afforestation fell back to £5000 – £5,500 per acre in quarters three and four.”
In total, Strutt & Parker says 41,600 acres were launched to the open market in 2022 (30% above the five-year average) and 89% of the farms marketed found a buyer by the end of the year.
Ms Fleming added: “While there is lots of talk about forestry and ESG buyers, it is worth noting the main buyers were farmers looking to expand their businesses or invest rollover proceeds from development land.
“However, during 2022, there was an increase in activity from non-farming investors who perceived land as a safer asset class compared to many other investment options.”
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