Most of the rest of the economic world is still in the doldrums but the value of agricultural land just keeps on rising. The latest evidence from three leading land agents shows continued investment and increased prices being paid but the market has been further defined between the east and west of Scotland, with farms in the former topping the demand.
Anna Henderson of Savills said: “Looking at our sales record over the past two years, average premiums of around 24 per cent over the asking price have been achieved. We have had competitive bidding situations in the majority of cases, and in two cases we achieved 95 per cent more than the asking price.”
Savills also reported that, in Scotland, farmers had been the most frequent buyers of farmland, motivated by an appetite to expand their existing properties.
“However, non-farming clients are also appreciating the strong performance of farmland, particularly against other investment classes, and they have been among those making offers for farmland in 50 per cent of cases,” Henderson said.
The acreage of farmland marketed in Scotland increased this year by 22 per cent, compared to the first three quarters of 2011 with 36,000 acres advertised publically. This, they reckon, is the largest supply of farmland during the first nine months of the year since 2006.
Luke French also of Savills commented, “While we have seen a notable increase in supply this year, larger commercially viable farms have been scarce. In fact, of the 134 farms available this year, only 23 had more than 400 acres.”
Jake Coleman of Smiths Gore was equally upbeat, saying that farms and the farmland market had been a “shining light” in the property market with prices continuing to rise year on year.
He said that arable land prices had exceeded £10,000 per acre for the best land provided this was for areas of up to about 100 acres.
At the other end of the scale, hill land, which is nowadays underpinned by forestry planting prices, has been achieving over £1000 per acre.
Forestry itself continued to be strong in the property market with bio-fuels bringing a new feature into a market which has been shared up till now by timber merchants and long-term investors drawn by tax incentives.