A new record price of “over £20,000/acre” has been paid for farmland on Scotland’s east coast, land agents Strutt & Parker have reported.
According to the company’s Spring Farmland Market Review, the average value of prime arable land in 2022 was £9,500/acre, which was similar to 2021, however prices varied from an average of £4,500/acre in the Highlands to £16,000/acre in the Lothians.
In total, Strutt & Parker says 41,600 acres were launched to the open market in 2022 – 30% above the five-year average – and more vendors than usual chose an off-market approach.
The company reports levels of demand remaining higher than supply, with 89% of the farms marketed finding a buyer by the end of the year, and farmers are making up the bulk of buyers.
Diane Fleming, Strutt & Parker’s farm agent for Scotland, said: “This is despite all the commotion faced by agricultural businesses over the past 12 months, including rising input prices, escalating interest rates and uncertainty over agri-policy reform.”
However, she added: “During 2022 there was an increase in activity from non-farming investors who perceived land as a safer asset class compared to many other investment options.”
Meanwhile, the review confirms the impact high forestry planting values are having on Scottish hill farms as the company’s data shows that in the past 12 months 24 hill farms came to the open market in Scotland compared with 11 in 2021 and nine in 2020.
Strutt & Parker says prices for hill land cooled in the second half of the year and suggests that could be because of the change in the rules on how carbon credits can be attributed to commercial plantations, coupled with the rise in supply and because some buyers had spent their budgets early in the year.
Ms Fleming said: “Hill farms accounted for 27% of the farms on sale in 2022, when they usually make up between 10-20% of farms. This signals that some farmers have been tempted to take advantage of the premium prices that have been on offer from forestry and natural capital buyers.
“Our data shows that values for land suitable for afforestation fell back to £5,000 – £5,500/acre in the third and fourth quarters. This was clearly a significant change and shows how dynamic the market currently is, although upland prices remain well above traditional agricultural values.”
