DEMAND for appraisals is on the rise because many property and landowners have a growing number of options to consider.

That's the end of year message from Davidson and Robertson sales director, George Hipwell.

With some sellers having held off in 2020 because of the uncertainty over Brexit, others have seen keen demand for what acreage and properties were available.

“Moving into 2021 it’s not just ‘how much will I get and how much will it cost me’, but more about planning what and when is the best way forward," Mr Hipwell explained.

"Timing and strategy for selling in 2021 will be more important than ever – especially if there is a surge of property coming onto the market. That’s why D&R is offering no obligation, free appraisals for clients wanting to assess their options.”

2020 has been a very different year. To the end of Quarter 3, around 15,000 acres of Scottish farmland has been publicly marketed in 2020 – a record low. Uncertainty over capital taxation relieve, reforms to farm subsidies, trade deals and record low interest rates have all been factors in shaping land prices this year.

This does not cover the off-market activity in 2020, a developing market trend which means buyers need to be proactive and not just wait for properties to be brought to the public market.

Mr Hipwell told The Scottish Farmer: “Low supply coupled with progressive farm businesses looking to expand, plus record low interest rates and strong asset base, means in 2020, excess demand for land is driving price.”

Land and property in Scotland’s Central Belt has always been a strong market but there are new opportunities across the regions for lifestyle property. Farmland, forestry, and rural residential market weathered the challenges of 2020 well.

2020 has seen a significant variation in prices for land class by region and characteristics, but prices have held well compared to 2019 and in some cases are attracting a premium in a competitive market. The key desirable characteristics remain the same, land quality, size of holding, provision of good quality fixed equipment and location.

There are some new market trends, including a more prominent desire for diversification opportunities and an eye to what options Natural Capital and a new subsidy regime may bring. Holiday lets, glamping pods, and livery stabling are just some examples of this.

Speculating on potential for future subsidy income, Mr Hipwell believes there are new types of buyer emerging for pockets of low output land that has environmental provenance.

He said: "In the past, these parcels of less productive land had lower values and were only attractive when sold at scale. Perceived as a lower risk, lower cost investment, they are now attracting interest from buyers speculating on a shift towards this type of land for future subsidy income. Potential sellers should seek professional advice to ensure maximising value from their land.

"Growth in forestry and planting: For the past three years the market for forestry and planting land has been strong and values have only strengthened in the last 12 months. Competition, driven from a wider array of potential buyers seeking tangible assets as a safe haven in the current volatile stocks and shares markets, is driving much of this and is a reflection of the strength of the asset which farmland and forestry are."

D and R believe the strength of the planting land market provides opportunities for farms to invest in the farm business without needing to reduce the productive capacity of the holding. Despite low interest rates, the uncertainty of trade relations with Europe from January 1, 2021 onwards means that this may be seen as preferential to committing to loan repayments.

In Southern Scotland, land and a farm in Dumfries and Galloway recently came to the market and were under offer at a competitive closing date in under two months. The land was sold for planting – which we see as a particular area of growth for 2021 as carbon trading develops.

Most of the land and property for sale by D and R in 2020 has been sold or is under offer, with good interest leading to early closing dates.

Mr Hipwell explained: "We have recently launched bare land at Barrhill, Mauchline and have seen interest in rural plots with a variety of sales recently launched in Stirlingshire, Fife and Dumfries and Galloway. This year has also seen near continuous off-market activity in the forestry and planting land market."

Carbon unit sales is a new and already buoyant market, with carbon trading in the region of £5-15/tCO2e as companies see carbon trading as a way of compensating for environmental loss. D and R surveyor, Emma Kerr, is a project developer for the Woodland Carbon Code Scheme and has a fully validated project in South Ayrshire with 10,285 Pending Issue Units of carbon on the market, with several other projects in the pipeline.

The rural residential market has seen an upturn in enquiries since the first lockdown. The market for rural properties with land and outbuildings was always strong in the Central Belt of Scotland, within easy reach of major towns and cities.

Post lockdowns, the firm hope that, so long as there is a good internet and mobile phone connection, space to create a home office or convert an outdoor building or space for an office then proximity to the Central Belt is less important.

This increased interest has brought new energy across the board, with areas like Aberdeenshire, Dumfries and Galloway and Cumbria seeing significant upturn in market activity with a record number of enquiries and interest from potential buyers across the border and Southern England.

The key characteristics for buyers of rural residential property continues to be good sized plot with garden and the ability to have a home office, property features such as stoves, open fires or aga, outbuildings or stables and paddocks.

"The ‘sweet spot’ for land is between three acres and five acres but up to 10 acres is still very desirable," concluded Mr Hipwell.

"Properties with acreage between 10 acres and 100 acres are also attracting interest from a more bespoke part of the market, providing new opportunities for vendors.

“It’s not only the interest but it’s the speed of deals being brokered that shows the strength of the current market.

"With so many new opportunities emerging combined with existing market trends and the fine balance of supply and demand, it’s important to explore the true worth of your assets, enabling you to decide if selling in 2021 is the right option. Professional advice on timing and strategy has potential to add value to your business."