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Scottish farmland market sees early surge in activity

17/06/2024
Evelyn Channing (Head of Rural Agency in Scotland at Savills)

THE Scottish farmland market is experiencing an unexpected early surge in activity despite weather-related pressure and economic and policy factors. 

According to Savills, the number of acres advertised for sale on the open market by the end of May was 64% higher than for the same period in 2023 and 50% higher than the 10-year average, totalling 14,142 acres. This marks the third-highest supply level since 2012, despite adverse weather conditions during winter and early spring impacting the start of the customary launch period in May. Additionally, these figures do not include private sales of farmland handled by Savills so far this year, which have accumulated to over £50 million in sales.

Preliminary data from private sales and pre-emptive offers indicate that the values of both arable and productive grassland are trending higher than those recorded in 2023. This upward trend persists despite the significant increases in interest rates and input costs observed over the past 18 months.

However, according to Savills, buyers are increasingly discerning, placing a strong emphasis on land quality. Prime land, classified as classes 1 to 3.1, remains the most sought-after among arable farmers, achieving £11,000 – £13,000  per acre. 

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Infrastructure has become a crucial consideration for buyers, leading to the emergence of a two-tier market. There is a strong demand for well-equipped units and adaptable buildings. The rising costs of constructing or repairing large general-purpose sheds or specialised facilities make properties with well-maintained infrastructure significantly more appealing in today’s economic environment.

Policy and legislation

The recent cuts to forestry grants are expected to impact market dynamics. This decrease may reduce the incentive for planting land, which has previously offered upland farmers roll-over funds for investment and has significantly supported the rural land market over the past two years.

While the latest land reform proposals may be perceived as an unwelcome distraction for those contemplating buying or selling, recent activity indicates that farmland remains a solid and attractive investment.

Evelyn Channing, Head of Rural Agency in Scotland at Savills, commented:

“We have some very good, well-equipped farms on the open market, or about to launch:  we anticipate that these will be highly contested.  In contrast, those farming enterprises of poorer land quality, or where investment is required, will need to be competitively priced to achieve a sale as supply figures increase.  

There are some very committed buyers in the market, so the best properties will continue to sell – and sell well.  However, more occasional or discretionary buyers need clarity from the Scottish Government over future farming subsidies:  this will help farmers enormously in planning for their futures and in making decisions about selling and buying.”

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