Land values offer food for thought but not for eating

There are two main influences behind the current price of land and neither has anything to do with the value of the food produced on that land.

Speaking yesterday in Edinburgh, Charles Dudgeon of Savills said one of the big drivers in land values currently was the amount of cash coming into the market from development or building land for housing.

This was particularly happening in the south of England where there has been more pressure on building new houses.

Not only was this phenomenon driving up the overall demand for land, it has also raised the value of farmland in England to the extent that it is now 15 to 16 per cent above comparable land in Scotland with Dudgeon remarking the gap between the two locations had only been 10 per cent 20 years ago.

This disparity is helping English farmers coming north to farm as Dudgeon pointed out they could increase their acreage by up to 20 per cent without spending more money.

Dudgeon’s colleague at Savills, Evelyn Channing then stated that the prices being paid for forestry land in Scotland was “setting the pace” in upland areas of the country.

As confirmation of that

0 Farming land values have risen slower in Scotland statement, she added that a farm up for sale in the south west of Scotland had recently attracted five offers – four of these were from farmers but the highest bidder wanted to plant trees.

Dudgeon said he did not want to be drawn into the debate between the two factions of farming and forestry, saying Savills job was to get the best deal for the seller.

However, he pointed out that the forestry price often related to planted ground and unlike farming not the whole acreage. The strength in the forestry sector was partially due to the increased value of standing timber.

Looking at farm land, Dudgeon said farmers currently fell into three broad categories. The first group wanted to expand so that they could trade profitably in a post Brexit world without being too concerned with subsidies.

His second group either could not or did not want to expand, seeing the way forward by diversifying or farming more intensively. “Many are looking at higher value crops rather than just continuing with beef, barley and oilseed rape,” he stated.

However, the group that worried him most was the third group, whom he claimed did not know where their future lay. “They are cogitating possibly because there is no family following or they are worried that margins are very low or simply not there,” he said.