DEMAND from forestry, natural capital investment, and corporate estate buyers is continuing to drive high land prices, according to a new report by the Scottish Land Commission.

But The Scottish Farmer has found out that this in conflict with the opinions of some industry bodies, who said the market was opening up again for private purchasers.

The Rural Land Market Insights Report 2023 underlined the need for action to ensure that communities, family farms, local businesses, and individuals were not priced out of the rural land market due to sustained high land prices driven by large-scale forestry and natural capital investments.

The report noted that, while forestry land prices flattened at the end of 2022, demand outstripped a continuing rise in the supply of land across the board, maintaining the 'seller’s market' of 2021.

Chair of the Scottish Land Commission, Andrew Thin, said: “The findings of our latest report underline the pressing need for action, including through the measures the commission has proposed for the Land Reform Bill in relation to better regulation of significant land sales.

“Scotland’s land is increasingly valuable and in demand for several reasons. There are competing objectives as Scotland makes rapid changes to deliver on the Scottish Government’s climate and nature goals.

"Our land market report emphasises the need to actively shape these changes through policy and regulation to deliver on Scotland’s ambition for a just transition. But failing to act now risks exacerbating existing issues of concentration of ownership – leaving individuals and communities increasingly unable to acquire the land they need.”

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The report highlighted that commercial forestry continued to be the biggest driver of increasing land values, particularly in upland and non-arable agricultural land. Additionally, natural capital investment motivations remained widely discussed and a key driver in the market.

However, director at Threave Rural, Allan Paterson, explained that, yes, off market sales were happening, but that that side of the market had slowed for his business. "We have 16 farms coming up for sale and I think three of those will go privately, but the rest will go to the open market," he told The SF.

"I would say that these are probably more commercial farming units than hill units, and we do expect to see interest from investors, but not as much as we would have seen, say last year."

He added: "Standard buyers are starting to get more of a look in and sellers want to maximise their return, but they also want to sell and see their property continue to be farmed.

"Buying for forestry is going on, but to a lesser extent for us. Certainly, planting permission is taking longer to get and these buyers don't want to deal with units with houses or buildings on them if they can avoid it. We've definitely seen a slight change in the market."

Mr Thin continued: “The report indicated that the land purchases in 2022 were potentially reinforcing the pattern of concentrated land ownership in Scotland. A smaller pool of well-resourced purchasers were the most active in the market, whether these be large-scale forestry interests, expansionist agricultural businesses, institutional or corporate investors, or wealthy individuals.

“The prices achieved and speed of many transactions, meant participation in the market had been curtailed, with particularly few opportunities for communities, new entrants and young farmers to acquire land, and help diversify the pattern of land ownership in Scotland."

Chief executive of Scottish Land and Estates, Sarah-Jane Laing, reacted with: “We fundamentally disagree with the assertion by the SLC that land is only available to a ‘limited few’. This is not borne out in the report, nor is the interpretation that there is an increasing concentration of landownership in Scotland.

“There is a changing pattern of landownership in Scotland, a market which in which government, individuals, communities, charities and businesses all participate.

“One striking feature of the report is the desire of different parties to operate at scale in order to deliver for people, jobs and nature. There is an irony in that one of the biggest recent off-market deals was the purchase of Glenprosen Estate for £17.6m by the Scottish Government, which is already the largest landowner in Scotland and yet is bringing forward land reform legislation that will inhibit large-scale land transactions.

"The fact is that the acquisition and operation of larger scale landholdings creates opportunities for other businesses, enterprises and communities to benefit.

“Forestry clearly remains a main driver of land purchases. The sector is hugely important to Scotland, employing more than 25,000 people and generating around £1bn per year GVA through forestry and timber processing, as well as forest recreation and tourism.

"The Scottish Government has set a target of 18,000 ha of new woodland each year by 2024/2025 and it will lead to a change in land use at a time when future support for agriculture, post-CAP, remains up in the air,” she added.