Farmland prices in Scotland remained steady for the second half of 2013, matching reported prices for the same period in 2012, according to the latest RICS/RAU Rural Land Market Survey.
During the second half of last year, the average cost of farmland continued at £3,750 per acre across Scotland, consistent with 2012. The cost of land increased slightly in the first half of 2013 to £4,438 per acre, however, this levelled off in following months.
The survey, which takes the views of members of the Royal Institute of Chartered Surveyors (RICS), and is collated by the Royal Agricultural University (RAU), reveals that prices look set to increase. A net balance of 80% more chartered surveyors have predicted a rise in farmland prices in Scotland over the coming year, with 60% more respondents reporting an increase in demand for Scottish farmland in the second half of 2013.
Looking ahead, chartered surveyors are predicting prices to continue to rise over the coming year, given the significant supply-demand imbalance. However, RICS warns that with floods having swept across the country, markets in the southern regions could well be significantly affected in terms of both transactions and prices.
“Farmland price growth in Scotland has remained consistent during the last five years with prices averaging £3,750 per acre,” said Sarah Speirs , RICS Scotland Director. “With commodity prices now having remained strong for some time, many farmers have been looking to expand their businesses and, with so little actually coming up for sale, competition for good land is fierce.”
“Although, with floods having devastated large swathes of southern England and parts of Scotland affected, what remains to be seen is the impact this has on the market in these areas and further afield,” she warned. “It will not be surprising to see this have a negative effect on transactions.”