Scotland’s strong farmland market is unlikely to show any sign of let-up in the year ahead despite the uncertainty posed by independence and the new Common Agricultural Policy regime, say land agents.
According to CKD Galbraith, the market is set to remain very buoyant with buyers focused on the productive capacity of land.
“Land prices should remain stable throughput 2014 after increasing last year – a trend which was influenced by the high demand for farmland suitable for vegetable, root crop, cereal and livestock production combined with the high price of land elsewhere in the UK,” said head of the firm’s farm division, Simon Brown.
“Stimulus in price changes will likely come from greater focus on productivity per acre over any other factor so while there has been a slight increase we do not expect a significant shift in land prices over the coming year.”
He said the upcoming Scottish referendum has had “no influence to date” in the farmland market.
Yet, James Butler, of Strutt and Parker’s Scottish division, reported that some buyers were currently holding off selling farms in 2014 as a result of the referendum and uncertainty over the new Cap regime.
“However, we predict that the demand experienced last year is unlikely to diminish – Scottish farmland continues to be comparatively cheap compared to neighbouring countries and there are many frustrated buyers who failed to secure a suitable farm in 2013,” said Mr Butler.
“We also predict that the gulf between prime arable land and the poorest land will continue to widen over the next few years.”
James Presly, of ANM Estates, predicted that demand was likely to outstrip supply this year with buyers vying for top-end arable land capable of producing high yields of cereals and vegetable crops.
“On the back of a very strong 2013 farmland market and continued activity in early months of 2014, we fully expect the farm and land market to remain buoyant,” he said.
“Such demand is coming from a range of buyers, with typically strong interest coming from well-established neighbouring farmers, but also from those farther afield and people from outwith agriculture who are seeking to own farmland perhaps as an investment. This is creating competition and often good premium offers on asking prices.”
Strutt and Parker reported a 13% increase in the value of Scottish arable farms sold last year, with some land achieving more than £10,000 an acre.
This view was supported by CKD Galbraith, who said good arable farms on the east coast sold extremely quickly last year with competing offers received at closing dates.
The firm said values of £6,000 per acre had been achieved for arable land in the north-east, while ANM said prices in excess of £5,000 per acre were becoming more and more common.