Farmland prices remained resilient in 2020 despite the Covid-19 crisis, claims Savills.
Figures from the land agency reveal the average value across all land classes in Scotland was up marginally to £4,308 per acre in the 12 months to December 2020.
It said a 17.5% increase in the value of upland farms was the main driver for the overall increase.
The average price of prime arable land held steady at £7,936 and the survey, which tracks sales of more than 50 acres, revealed the supply of publicly marketed farmland was down 57% on the five-year average to a record low of 17,600 acres.
“While the combination of Brexit, agricultural policy reform and the Covid-19 pandemic weighed heavily on farmers the length and breadth of the UK, the Scottish farmland market showed considerable resilience throughout 2020, demonstrated by strong sales and with average land values, for all land types, being upheld,” said Evelyn Channing, head of rural agency for Savills in Scotland.
She said a limited supply and a diverse pool of buyers helped maintain prices last year and strong interest from potential buyers should ensure prices stay firm in 2021.
“Whilst it is difficult to predict where land values will go in the longer term, it is clear that competitive closing dates and premiums are both features likely to be seen for best-in-class properties, smaller farms of residential and amenity appeal and tree planting land,” said Ms Channing.
“The majority of our commercial farm sales in 2020 were driven by the desire to expand. However, until such time as greater clarity is given on the future policy framework, farmers are likely to be selective with any purchases unless stimulated by golden opportunities which may present themselves.”
She added: “While our researchers are not anticipating a repeat of the significant price increase recorded in the decade to 2014, we do expect a return to historical real-term growth of just over 1% per annum in the medium to long term.”