Arable land outstrips livestock in demand

IT MAY seem perverse with cereal prices in the doldrums and livestock values riding high, but the demand for land is all for cropping farms, leaving many livestock units on the market unsold. Speaking this week in Edinburgh, Charlie Dudgeon of Savills pointed out that last year 106 properties with more than 50 acres went on to the market in Scotland and at the year end 46 of those, all livestock farms, were still unsold.

He said: "This is proof that it is the arable and dairy sectors and not the beef and sheep enterprises that drive the demand for land in Scotland."

This demand for top-quality land has already seen several properties hit 10,000 per acre, with "potato growing" farms exceeding that, although Dudgeon estimated the average price for Grade 1 farms was currently about 7,000 per acre.

Arable land rose in value by 12 per cent in Scotland last year against a figure of 3.8 per cent for all land sold and this perhaps disguises grassland values in the west of Scotland which, he reckoned are "under pressure".

"We are definitely moving into a two-tier market with a real thirst for good arable units and a more discerning demand for livestock farms," he said.

Part of the fall off in demand for livestock farms in the past year has been caused by the complete collapse of the Irish economy. Prior to the recession hitting Ireland, six out of seven buyers of grass land farms in Scotland were from across the Irish Sea as their own land market had rocketed on account of development land cash.

Now, according to Dudgeon, unless a grassland farm has special features such as a good location or farm buildings, the value is about 3,000 to 4,000 per acre.

Despite this divide in values, investment in land generally over the past decade has been very profitable, with overall values increasing by 134 per cent in that period. "This is the fourth highest figure for any decade since 1800," Dudgeon stated.