Prime arable land in short supply

The Scottish farmland market has been dominated by a shortage of prime arable land and large regional variations in value in the past year, claims Strutt and Parker.

The firm’s farms agent, William Dalrymple, said that in 2017, the total farmland acreage brought to the market decreased by 39% and the number of farms reduced by more than 50% compared to 2016.

An estimated 24,800 acres have been launched to the Scottish market, compared to 41,100 acres in 2016 and 34,500 acres in 2015.

Mr Dalrymple said most of the 53 farms that came to the market were between 100 and 500 acres and that the strongest demand was for prime arable land and well-equipped farms extending to more than 300 acres. A total of 38 (72%) of farms available found a buyer.

“We believe the shortage of supply is due to uncertainty over Brexit and the future of subsidy payments. I think many farmers are reluctant to make decisions at this point and are waiting until they know more,” said Mr Dalrymple.

“Interestingly, we have seen a re-emergence of English buyers and bidders as well as ongoing interest from Northern Irish buyers. This may indicate the prospect of a second independence referendum is perceived as less of a concern.”

He reported large regional variations in land values, particularly in the arable sector with land prices varying from £3,250 an acre in Aberdeenshire to £14,600 an acre in Angus.

Permanent pasture prices ranged from £1,500 an acre in Dumfries and Galloway to £3,600 in Stirling, while hill ground sold for £200 an acre in the Highlands and £900 an acre in Perthshire.

He said: “The continued uncertainty surrounding the agricultural sector and Brexit makes it challenging to predict what lies ahead for the market. However, using 2017 as a guide it seems land values will remain fairly resilient.

“A potential reduction in subsidies is likely to have some impact on the farmland sales market, particularly arable, and we may see an increase in farms coming to the market as a result. However, well-equipped, prime arable land is likely to remain scarce. Diversified and mixed farms are likely to become more resilient than arable units.”