DESPITE a general tightening in bank borrowing and the difficulties caused by bad weather last year, the demand for arable land is Scotland is still strong according to a leading land agent.
John Coleman, of Smiths Gore, revealed that bare arable land values rose by 17 per cent to average £5,850 per acre last year and he believed that interest in buying arable land in Scotland would continue into 2013.
“Factors which will affect prices include uncertainty about the Common Agriculture Policy reform as many farmers are waiting to see the detail before selling; tighter lending into agriculture; and bad harvests,” he said. “But I predict that institutional investors, who have been active in England last year, will be looking more and more to Scotland, as opportunities in England are in short supply and the Scottish farm prices, which are around 15 per cent lower than England, are seen as good value.”
Last year in Scotland almost 35,000 acres of farmland were offered for sale which was 19 per cent more than the previous year and the acreage was the highest area for sale in the last five years.
“Demand for all types of farms in Scotland, especially for high-quality larger arable farms of over 500 acres, continues to outstrip supply, and this will slowly but surely push prices up,” added Coleman
“We have seen some exceptional prices being paid for farmland in East Lothian, Fife and Angus, of up to £10,000 per acre, which is very encouraging.”
However the market was not universally booming with Coleman saying that the reduced development potential of farm buildings had had an effect.