East–West split in demand for property

Published on Thursday 19 November 2009 21:55

THE value of land is far more polarised than it has ever been before with a big difference now between the demand for an arable unit in the east of Scotland compared with a livestock farm in the west.

That view on the current demand for land has been given by Chris Hall, of surveyors and estate agents Rettie & Co. "If you come to me with a 500-acre arable unit on the east coast then there will be no problem in selling it. However, a similar sized property suitable for livestock farming or dairying in Ayrshire, Lanarkshire or Dumfries and Galloway is currently more difficult to shift in quick time."

Halls' views were confirmed with an analysis of all agricultural properties marketed this year with several in the west of Scotland remaining on the market for up to six months compared to their eastern counterparts being snapped up quickly He said the polarisation was down to the wider options that a farm on good land in the east provided for farmers and frequently the purchasing power of the neighbours in these areas.

But another factor that has affected farms in the west of Scotland has been the almost complete loss of Irish buyers following the deterioration of their economy and the disappearance of the majority of Scots residential and amenity buyers following the weakening in the residential property sector.

To date 44 out of 88 agricultural properties advertised for sale this year were from these three areas but the majority have still sold so it is too early to call any major trends for certain.

His views related to farming but did not appertain to residential properties with a few acres of land in the country. After 2008 when that market just came to a halt, this type of property was now increasingly back in demand. But again location is more important than it used to be.

Of possibly greater concern to the value of farm land than the supply and demand in the short to medium term is the threat of the abolition of agricultural property and business property relief in the forthcoming budget.

"The need for the government to balance its books is well known and a number of prominent solicitors and accountants are already advising their clients of the possibility of the removal of these reliefs.

"I believe the consequences for the land market could be severe in the medium term if this came to pass."

Hall hoped both NFU Scotland and SRPBA were ready to lobby vigorously against this possible imposition.

He also commented on the fairly recent surge in the buying of blocks of woodland, splitting it up into four- or five-acre plots and putting it back on the market. "People tend to get sucked into such properties without realising the possibility of getting planning permission for house building on it is very small. Often the price they pay for a small plot is very inflated and there is little in the way of an upside."