The Chancellor’s Capital Gains Tax reprieve could influence the supply of farms in 2021

According to Savills' latest figures, just under 5486 acres of farmland were publicly advertised for sale across Scotland during the first quarter of the year.

This 6% drop on the same period last year continues the record levels of low supply, limiting the options on the open market for motivated buyers of Scottish farmland. Yet according to Savills, these figures do not tell the whole story.

Savills head of rural agency in Scotland, Evelyn Channing, explained: “Supply figures are historically always low in the first quarter of the year, with the vast majority of Scottish farms advertised when they are looking their best, from late May through to early July.

“These supply stats do not paint the whole picture. We’ve been involved in a number of private transactions since the beginning of the year, which reinforces the message that when golden opportunities present themselves – regardless of the time of year – the current appetite for quality farmland and well equipped units remains strong.

“We think some of this early seller activity was stimulated by the potential threat to a change in capital gains tax relief, which the Chancellor chose not to adjust in the March budget. It does however remain a consideration for those owner occupier farmers thinking of retiring.”

In Great Britain as a whole 14,987 acres were openly marketed during the first quarter of the year – a rise of 20% year on year. Often any change in trends and also in supply of acres to the market begins in England. According to analysis by Savills rural research, those farmers who have brought land to the market early are being rewarded with strong sales.

“Savills in Scotland can support this message having negotiated privates sales totalling £24 million in the first quarter of 2021”, said Ms Channing.

“Although some extraordinary prices have been achieved for best in class, the market for farmland remains price sensitive given the combination of continued uncertainty around future waves of the pandemic, the adjustments to trade following Brexit and lack of detail for the future subsidy support scheme to Scottish farming post 2023/24.”

According to Charles Dudgeon of Savills, if you are thinking of selling – whether on the open market with advertising or privately – it is worth bearing the following in mind in order to give your property the best chance of success.

He said: “Find out who is in the market for your type of farm, what is the best way of reaching them, and what is the most effective strategy to secure the best price. For example, should your land be lotted to suit different types of buyers, publicly advertised in order to create strong competition or placed privately?

“Many farm sales are won or lost by first impressions, so it really does pay to do the basics: fill in potholes, check fencing and repair where necessary, check gates are properly hung, clean gutters out, kill off weeds, muck out livestock sheds and top grass fields regularly.

“Continue farming as though you were staying: sow crops as normal – you can be compensated later or add a holdover clause to the farm sale agreement – and allow grass to flourish, adding nitrogen and reducing livestock numbers.

“If your property has issues with rights of way, private water supplies or local developments, we advise being open and upfront about these facts from the start. Buyers are less likely to lose confidence in your farm if you’ve made them aware of everything they need to know before they decide to buy your property.

“The importance of gathering paperwork early cannot be underestimated. Depending on your holding, this could include: five years of cropping records; three years of yield records; soil testing documents to show your land remains fertile and fresh; lambing percentages; calving rates; milk yields average per cow and drainage improvement records. And if you have been lucky enough to have been awarded for performance, conservation or other noteworthy achievements, dig out your certificates and show them to potential buyers.”