Scottish farmers squeezed out of the land market
Proof that Scotland’s farmers are being squeezed out of the land market was revealed in a report published yesterday.
The assessment of land sale trends drawn up by the SRUC for the Scottish Land Commission showed that non-farming investors were becoming a dominant forceinscotland’slandmarket, as high demand for tree planting land and other carbon offsetting projects combined with low supply to push overall prices up by 30 per cent.
The report showed that in the past year corporations, investment funds and charitable trusts snapped up more than half of all estate sales, while many smaller units were purchased by ‘lifestyle’ buyers and also highlighted that there was a big increase in the number of foreign-based purchasers.
Drawing on published market information and interviews with sector experts, the report was designed to provide the Commission with a better understanding of the land market and what was driving it.
“Emerging carbon and natural capital value is an increasing influence, but other drivers, particularly
high timber prices and forestry valuesremainsignificant,”said Hamishtrench,chiefexecutive of the Scottish Land Commission.
The report found the growing role of non-farming investors had resulted in land values being increasingly influenced bylong-terminvestmentpotentialandcorporateenvironmental,socialandgovernance(esg) considerations.
This saw average farmland values–whichhavetraditionallybeenlowinmanyofthemore marginal areas - rise by 31.2 per cent in Scotland in 2021 while the rest of the UK saw an uplift of only 6.2 per cent.
Off-market also made up a growing proportion of land market activity and the SLC noted that this trend could constrain access to land for individuals, communities and businesses, a situation which it claimedraisedquestionsabout transparency of the land market and raised fears that Scotland’salreadyconcentratedpattern of land ownership could fall into even fewer hands.
The report recognised that speculation currently played an important role in thelandmarketasinvestors looked for a safe haven in a turbulent global economy and gambled on future carbon values rising.
Predicting continued strong growth in land values the report pointed to continued low supply and high demand, high levels of private wealth and corporate interests seeking land, long-term policy on climate change, and increasing pressure on global timber markets and food supply chains.
Trench added that the market influenced not only who owned Scotland’s land, but also who was able to make decisions and who benefited from land and its economic, social and environmental value.
And he said that with so many factors coming into play there was not simple answer to allow the market to be shaped in the public interest and a joined up approachinpolicyaswellas responsible practice on the ground was required.
“To inform our advice to Scottish Government we will be holding a series of eventsanddiscussionswith stakeholders to discuss the findingsofthisreportandits implications for both policy and practice.”