2019 saw unprecedented prices paid for hill ground suitable for tree planting in Scotland, said farm agency Strutt & Parker.

In some cases, plantable hill ground attracted prices in line with secondary arable farms and grass leys to reach a high of close to £3,000/acre in 2019 (compared to £2,000/acre in 2018), reported the firm as they analysed the performance of the Scottish farmland market in 2019.

Diane Fleming, farm agent for Strutt & Parker in Scotland, said: “The increase in demand for hill farms and the prices paid have made it almost impossible for hill farmers to compete for land which has commercial forestry planting potential. Forestry investors consistently outweighed the bidding power of farmers. The agricultural value of hill ground when unsuitable for forestry planting sits between £300 and £1,000 per acre, depending on its location.”

Dominance

The dominance of the forestry sector aligns with John Clegg & Co’s Forest Market Report – largely examining sales of established commercial forestry plantations – which details a robust year for forestry with a 23% year-on-year rise in average forestry values, a 21% increase in the total value of the market and commercial forestry transactions worth £126.5m.

Strutt & Parker reported that the 2019 farmland market held up “remarkably well” with demand outstripping supply for prime arable farmland. Best-in-class arable reached £16,000/acre in one example, on a par with equivalent English farms.

Forestry buyers

A total of 100 farms were marketed in Scotland last year, in line with the five-year average of 102, and Scottish farmers made up the majority of purchasers for all farmland bar the hill ground attracting forestry buyers.

In a significant shift, small livestock farms made up the biggest share (49%) of the farmland market compared to 2018 when arable was dominant. There was a reduction in size of the farms available, with a limited supply of farms over 500 acres and just three farms exceeding 1,000 acres. Half of the livestock farms were under 200 acres in size.

Pasture values softened slightly to £2,500/ac to £5,250/ac paid for grass leys and £1,000/ac to £2,500/ac paid for permanent pasture.

While the overall acreage on the market decreased by 32% year-on-year to 30,800, the difference is exaggerated by 2018’s record-breaking year, when more land hit the market than in any year in the preceding decade.

England

The drop in acreage was not as stark as the 40% reduction witnessed south of the border, where the supply of farmland on the market was the lowest for a decade.

Of the farms launched during the year, 56% of farms successfully found a buyer by early December, a similar level to 2018. Over the last two years, 90% of farms sold at or above their asking price.