SCOTTISH FARMLAND is in short supply – and buyers from outside the country are increasingly competing to buy it.

Only around 39,400 acres were placed on the open market across Scotland last year, representing a decrease of 12% compared with the previous year.

Savills Head of Rural Agency Charles Dudgeon said: “With fewer opportunities to purchase, demand was concentrated on the limited acreage launched to the Scottish market last year with more buyers coming from all over the UK.

"Of the 311 buyers who viewed farms launched by Savills in 2017, 38% originated from outside Scotland, up by 15% on the previous year. This demonstrates the continuing drive from purchasers to achieve value for money in a quest for scale and underlines the importance of sellers casting one’s net as wide as possible.”

Mr Dudgeon reported that last year's activity was particularly focused in the South West and North East of Scotland, which jointly accounted for 61% of all Scottish farms advertised for sale. Dumfries and Galloway was the only region in Scotland to see an increase in acres advertised, up by 17%. Despite this, values remained stable and the number of farms sold or under offer is in line with the Scottish average.

He noted that Irish buyers provided a welcome boost to the market last year, particularly in the South West, largely due to the proximity to the ferry terminal at Cairnryan.

Savills latest Farmland Value Survey reveals that during the first nine months of 2017, the average value of prime arable land in Scotland remained stable at £7690 per acre, which compares to a GB average of £8940 per acre, down 2.5% for the same period.

Mr Dudgeon continued: “2017 saw a widening divergence between ‘the best’ and ‘the rest’, with prime arable land on the east coast often making more than £9000 per acre in contrast to £5000 for poorer arable land in other areas. In a similar vein, quality pasture in productive dairy areas can achieve over £5000 where demand is strong.

“The appetite for land remains strong, particularly for quality, well equipped holdings which are fairly priced. Banks are supportive but are taking a more rigorous approach to lending in the current political climate, which has resulted in buyers requiring more time to prepare offers and deals taking longer to complete. Detailed preparation by both sellers and buyers therefore remains key to success.

“There is no doubt that the current uncertainty surrounding the Brexit negotiations has restricted the level of land coming to market," he added. "This is not a new phenomenon: the Common Agricultural Policy reforms implemented in 1992, 2005 and 2013 were all preceded by low supply. We anticipate that this will continue until the outcome for farming post-2019 is known, and as a result, values will hold up in the meantime.

“For those considering selling, one should note the historic pattern of an increase in the number of acres offered for sale post reform, which we anticipate will follow after Brexit. Although the shape and extent of longer-term financial support has yet to be established by the UK Government post 2024, it is widely thought that the emphasis will shift away from production, which may force further change within the industry.”