Overseas interest pushes up value of Scottish estates

Craigallian, near Stirling. Picture: Aerial Photography Solutions

Some of the country’s wealthiest landowners are putting their properties on the market amid unprecedented interest from overseas.

While foreign buyers have traditionally accounted for one in five of every estate transaction, they have been behind half of the 11 properties sold or put under offer in the first nine months of 2015.

The sales come amid continuing uncertainty among British buyers due to the Scottish Government’s radical Land Reform (Scotland) Bill, which proposes the reintroduction of business rates for many estates.

Kinnaird House, Ballinluig. Picture: Ken Whitcombe

The body representing Scotland’s landowners said an “element of doubt” remained for those purchasing or selling land due to a “lack of precise detail” in the legislation.

However, upmarket agents said the widespread doubts surrounding last year’s independence referendum have given way to growing levels of business. The first nine months of the year have seen nearly double the number of estate sales than in all of 2014, with around £40m spent as some of Scotland’s most exclusive properties change hands.

But that figure looks set to be eclipsed before the year’s end, with 24 residential or sporting estates currently on the market. If each was to meet its asking price, the portfolio would be worth £79m.

Even so, bargains can still be had on the public market, with Killean estate in rural Argyll available for a third of its original asking price. Another estate, Dungarthill in Perthshire, regarded as one of Scotland’s premier shooting estates, was last on the market in 2010 at offers over £8m. Five years on, it is being advertised at offers over £5m.

The most expensive is Kinnaird Estate, near Pitlochry. The 6,200-acre plot come with 16 properties, three lochs, holiday cottages and extensive countryside for deer stalking and grouse shooting. It is on the market at offers over £9.6m.

Andy Wightman, the land reform campaigner, said his impression was that the number of estates for sale outstripped previous trends.

“My instinct is that number of properties sounds a lot,” he said. “In midsummer I would expect there to be around a dozen to 15 estates for sale and this is October, which is not the time when you try to sell.”

Luke French, an associate director with Savills, said he was aware of “at least another ten estates” not advertised for sale which could be acquired privately. He said land reform issues were “still very much in the mind of purchasers, particularly south of the Border,” but stressed that the number of estates for sale was not out of the ordinary and dismissed the idea that land reform was scaring owners into selling up.

“It’s a very similar market to recent years and it’s not unusual to have that many properties available,” he said. “Estates are sold for a range of reasons. A new generation might not want to take it on, in some cases it could be financial driven or a change or lifestyle.”

John Bound, a partner at CKD Galbraith, said: “I don’t think people are putting their estates on the market because of land reform. There are certainly a few who don’t like the political flavour of things at present but the number on the market is not unusual.

“There is concern about the Land Reform Bill but that said, people realise Scotland is one of the last true wildernesses. If you are a sensible landowner and you’re not difficult or standing in the way of progress, there’s not that much to worry about. There have been fewer estates on the market over the past two or three years, probably due to all the political uncertainty, and while there’s still political uncertainty, there’s definitely more confidence in the market.”

Sarah-Jane Laing, director of policy and parliamentary affairs at Scottish Land & Estates, said: “It is generally accepted that both businesses and the property market are averse to uncertainty, and we would be surprised if the political climate was not having an impact on decision making of both sellers and buyers. One of the real difficulties is the lack of precise detail that still remains in the government’s land reform proposed legislation.

“Until we receive more clarity from government about what they want to achieve, that element of doubt will remain for those who are purchasing or selling land, and businesses that may wish to invest further.”

The 24 estates are currently being listed by eight firms: Asset Properties; Christies Real Estate; CKD Galbraith; John Clegg and Co; Knight Frank; Rettie; Savills; and Strutt and Parker.