This takes growth over the past 12 months to 8% and prices are now 223% higher than they were 10 years ago, according to the latest data from Knight Frank.
‘There has been a lot of talk about the impact of the referendum, CAP reform and land reform, but there is much more confidence in the market for agricultural land than you might imagine, particularly for good arable ground,’ said farm agent James Denne.
‘The fact that all the uncertainty about the vote hasn’t caused values to dip underlines the inherent strength of the market. Supply is still very limited and demand remains firm,’ he added.
Because relatively little land does come to the market, farmers will always try their hardest to buy anything nearby that does become available, according to valuer and consultant Michael Ireland. ‘I don’t think any of the current issues are likely to dim that desire,’ he added.
Another sign of the confidence underpinning the market is the recent sale of the 28,300 acre Auch and Invermearan Estate by Knight Frank for over its £11 million guide price.
‘Although a truly stunning sporting and upland farming business, the estate’s potential to generate hydroelectricity was one of the main reasons for the purchase’ said Ran Morgan, Head of Knight Frank’s Edinburgh office.
‘Despite all the hype over independence, there is a real appetite for Scottish land holdings from investors, especially from overseas. Potential buyers are particularly interested in estates that can produce significant income in the form of renewable energy, a massive resource for Scotland, or via a commercial agri-business,’ he explained.
Auch and Invermearan is the second £10 million plus sale that the firm has completed in the last 18 months that has attracted interest from around the globe and been sold to investors out with Scotland.
Traditionally, Scotland’s land market is more active in the second half of the year, so the next six month could be a sterner test of its resilience. But Knight Frank expects demand to continue outstripping supply with average prices rising a further 5% over 12 months.
‘I think some people will be holding back sales until the after the referendum because they have underestimated current demand, so I am not expecting a huge amount to come to the market this summer,’ concluded Denne.
