IN the face of Brexit negotiations and the global pandemic, 2020 was an extraordinary year for the Scottish rural land market, according to new information from Savills. The market entered a new era, where newly perceived ‘green’ attributes enhanced its appeal and subsequent values.
Analysis of Savills’ sales data demonstrates that funds of almost £5 billion are currently chasing Scottish rural property, up 20% on 2019. There was a 98% increase in buyers registering with the agency to purchase rural property in Scotland last year (from January 1 to December 31, 2020), from small farms to large estates. Lockdown continues to amplify this trend, despite the fact that international buyers continue to be severely restricted from viewing Scottish property due to travel restrictions. As a result around 70% of buyers last year were based in the UK, although interest generated in larger estates was global.
Rural Scotland continues to attract residential and amenity buyers, with more buyers being drawn to the great outdoors during the pandemic. Strategic lotting of larger estates where practical to do so has attracted lifestyle buyers to residential focused packages. However, a new surge in interest in Scotland’s larger estates can be explained by two key purchasing drivers – natural capital and forestry, according to Savills.
The Scottish estate market is rarefied – only 23 rural estates (defined as a land holding which includes a mixture of asset or enterprise type eg residential, farming or forestry) changed hands last year. Around half of these were sold privately, without ever coming to the open market. While this in line with the long term average, the total value of Scottish estates sold last year increased by 43% to £100 million, in part as a result of stronger demand.
Head of rural agency in Scotland, Evelyn Channing, said: “New buyers are entering the market, not for the amenity or sporting potential of land, but for its green credentials. The ESG agenda (environmental, social and corporate governance) is bringing buyers forward of all shapes and sizes, from small Scottish businesses to large charities and investment companies. As a result the forestry and planting land market is booming: several new funds in the market have been competing aggressively alongside larger, more established investors from all over Europe and beyond. Other buyers are looking to offset carbon emissions produced elsewhere, by purchasing natural capital.”
According to Savills, their focus has largely been on planting land and established forests but also encompasses peat bogs which cover a large part of Scotland and until now regarded as having minimal value.
Ms Channing said: “Scotland is one of the few remaining places in the world where green resources can be acquired on a meaningful scale. Scottish estates have an expanding role to play and we anticipate significant diverse interest in the estates that we will be bringing forward to the market from this spring onwards. This was demonstrated last week by an extremely competitive closing date for an estate which we had been marketing quietly, exceeding not only our clients’ expectations but our own. There is a distinct imbalance between supply and demand and as a result those that are electing to offer their estates for sale are benefitting significantly from the current market conditions.”