Demand for Scottish farmland has slipped and is predicted to fall further, according to a survey from the Royal Institute of Chartered Surveyors/Royal Agricultural University.

The report, which claimed the market has been in decline for the past 24 months, pointed to uncertainty over Brexit, insecurities over future subsidies, and low commodity prices being the main reasons for its slowdown.

Survey respondent, George Hipwell, of Davidson and Robertson Rural, Bathgate, said: “Quality has and will continue to be the main factor driving land values with regional variations due to influences such as the strength of neighbouring agricultural businesses, land quality and level of fixed equipment.

“Fluctuating commodity prices, reducing subsidy levels, and the UK’s removal from the EU mean the viability of agri-businesses will become increasingly important and as such marginal properties may need to be realistic in order to achieve a sale.”

Commenting on farmland sales over the past year, Tom Stewart-Moore, Knight Frank, Edinburgh, said 2016 saw about 30,000 acres come to the open market in Scotland (based on farms offered for sale of £1m pounds or more, 71 units in total). By the end of the year, 85% of those had either been sold or were under offer, with 15% remaining available for sale.

In general, he pointed out that prices had remained flat and had dropped in some areas with more interest in farms of 300 acres or more.

“Quality, well-equipped farms sold well although no record prices were achieved,” he said.

“Asking prices were key and those which guided too high, just haven’t sold. The key message looking back is that commodity prices and Scottish politics are having more of an influence on the market than Brexit.”

Mr Stewart-Moore also highlighted the fact that a number of dairy farms which had been on the market for more than 12 months, sold at the end of last year following the upturn in milk prices.

Further south, Harry Lukas, of CKD Galbraith, Galashiels, said: “Some farms have been slower to sell in the Borders in the last six months with buyer enthusiasm dampened by CAP problems on top of lower stock and commodity prices. There is still, nevertheless, underlying demand for good holdings.”

Looking further ahead, RICS policy manager in Scotland, Hew Edgar, said: “Any decrease in the overall level of funding for agriculture, the environment and rural development post 2020 could have significant impacts on the rural economy.

“There is currently little belief amongst those likely to be impacted that current payment levels will be maintained post-2020.

“Furthermore, any loss of access to the single market and restrictions on freedom of movement of labour will also impact land based businesses. Imposition of tariffs, for example, on Scotland’s beef and lamb exports will affect profitability of the sector,” he concluded.