Farmland in your area 2024: Scotland

Limited supply is frustrating buyers in the farmland and estates markets in Scotland.

Last year saw 26,200 acres offered for sale, a sharp drop on the 41,600 acres in the previous year.

Supply was regional too, with more than half of those transactions in the Scottish Borders, Dumfries and Galloway, and Aberdeenshire.

See also: More land and farms wanted on Scottish market

Competition for tree planting land fell away in 2023, after several key buyers became less active while they focused on developing large banks of previously acquired land.

An expectation that rules would tighten around planting better quality land also ended the run on better quality mixed farms.

Demand remains for additional acres

Evelyn Channing, head of rural agency in Scotland, Savills

The Scottish farmland market continued to perform well in 2023, with arable land and lowland pasture sales remaining strong as agricultural buyers sought to acquire additional acres and the opportunity to improve productivity.

However, the demand for land suitable for commercial tree planting recalibrated, leading to a drop in upland farmland values of up to 25% from their peak in mid-2022.

Compared to historical levels, the volume of land available for sale remained constrained.

Buyers, especially those seeking larger equipped units, were frustrated by the limited opportunities.

Average arable and lowland pasture values remain stable at £7,000/acre and £4,500/acre respectively, while prime east coast arable land often exceeded £12,000/acre where competition was generated.

Roll-over funds continue to influence the market and were the purchasing motivation for 24% of farms sold by Savills in 2023.

However, these buyers are declining in number due to cooling development land and tree-planting markets.

Rising interest rates also tempered the enthusiasm of some farmers looking for expansion or relocation opportunities. This may begin to have a more direct bearing on supply levels in 2024.

Limited supply of land

Duncan Barrie, partner, Galbraith

The prime farmland market was fairly restricted in 2023 and we anticipate the fairly limited supply of land will continue this year.

Interest rate rises encouraged the sale of farms where businesses were already struggling to make a margin or had high levels of debt.

From a buyer’s perspective, those who were already overstretched were not able to make an offer on some very desirable holdings.

Following the pause in rate rises, buyers appeared more positive in the last quarter of 2023. Lenders have remained keen to progress loans, providing the loan-to-value stacks up and the purchaser can service the debt.

As a result, more productive areas of arable land remained in short supply and this maintained arable land values during much of 2023.

More marginal land suitable for forestry planting and other natural capital purposes continues to be in demand.

However, interest has reduced as investors become more selective and place greater focus on examining any wider environmental and wildlife restrictions connected to the land before a deal can be agreed. 

Sold in 2023

Nottylees, Kelso, an equipped 461-acre predominantly arable farm was sold as a whole to a local farming family.

Agent Savills received seven offers, with 20% of viewings generated by prospective buyers from south of the border. It was sold at a strong premium over the £5.2m asking price.

Easter Kinnear Farm, at Newport-on-Tay, Fife, was sold with just over 617 acres of arable land and permanent pasture, a traditional farmhouse and a range of farming buildings with livestock handling facilities.

The farm, which has potential for private or commercial equestrian use, was marketed by Galbraith at a guide price of £4.2m.

On the market

The Logan Estate at Stranraer has just over 1,637 acres, with Logan House at its heart.

The agricultural landholding of about 1,158 acres is managed in-hand, with 270 acres of woodlands managed for sporting and amenity. 

There is a range of traditional and modern farm buildings. Savills is seeking offers over £9.5m.

Galbraith is looking for offers of more than £725,000 for a block of Grade 4.1 land at Ardenlea, Berwick-upon-Tweed. This is almost 152 acres and has direct access onto adjacent minor public roads.

There is forestry and woodland creation potential, subject to planting consent, and opportunities to expand environmental interests through natural capital schemes.