The value of Scottish farmland remained virtually static in the first half of 2016, down just 0.2% to £4,357 per acre, according to the latest sector index.
Year on year values are down 1.7% but up 26% over five years, up 169% over 10 years and up 174% over 20 years, the data from the Knight Frank Scottish Farmland Index shows.
A breakdown of the figures show that good quality arable land remains at £9,046 per acre, while the price of permanent pasture fell fractionally to £2,719 per acre and overall despite prices holding up, there has been relatively little market activity in 2016.
‘There have been very few farms sold so far this year, and fewer than usual were launched around the time of the Royal Highland Show, which is the point the market here traditionally gets going,’ said Tom Stewart-Moore, head of Scottish farm sales at Knight Frank.
‘We are still talking to potential vendors who had just got to grips with the result of the recent reform of the Common Agricultural Policy and Land Reform, but until they get a better feel for what Brexit means for the Scottish agricultural industry they are wary of committing to a sale,’ he explained.
‘Combined with the continued slump in commodity values, many people were expecting a rush of farms to the market in 2016 and a subsequent drop in prices,’ he pointed out, adding that low interest rates mean there have been very few forced sales so far.
He also pointed out that demand for good quality arable and livestock units is definitely outstripping supply and demand also remains strong for amenity and sporting estates.
Knight Frank recently sold the 6,500 acre Kinnaird Estate in Perthshire for in excess of its £9.6 million guide price and an 8,000 acre stalking estate in Sutherland, which is due to launch soon, is expected to be another good test of the market.
‘Although Scotland did not vote for Brexit, the slide in the value of Sterling since the referendum makes land here better value than it was before the vote so I’m expecting more interest from overseas buyers,’ said Stewart-Moore.
‘Despite uncertainty in the economy, the value of the pound and volatility in the stockmarket, land is still seen as a very safe investment,’ he added.
