Soaring land prices are pushing farmers out of the market, according to a new report from SRUC which showed that land prices here had risen 30% in the last year.

Tree planting, carbon offsetting and renewables have been cited as driving land prices beyond the reach of conventional farmers, in the report carried out at the behest of the Scottish Land Commission. Non-agricultural investors have contributed to a rocketing Scottish market, which is in sharp contrast to the UK’s more modest growth in land values of just over 6%.

Last year, half of all the estates sold in Scotland were bought by investment funds, corporations and charitable trusts. The report reviewed publicly available sale records as well as interviewing land agents on the changing face of the Scottish countryside.

The reported amount of land taken out of farming was thought likely to be even higher, as many transactions are being kept private when companies plan to plant trees. The SRUC report stated that off market sales accounted for a third of all transactions for forestry and plantable land, which is up from 11% in 2019.

The Scottish Farmer understands some farmers are being cold-called by land agents with offers to buy up their farms so that they can be put into forestry schemes.

Upland and hill farms are being sold for £5000 to £7000 per acre, which is often more than double its farming value. Tree plantable farmland had seen a 54% rise in value between 2021 and 2022, according to the report.

Scotland now provides 76% of the UK commercial forestry land market as demand appears insatiable. Last year, two established woodlands in Scotland changed hands for £8370 per acre, with ground for planting averaging a net price at £4655 per acre.

Allan Paterson, a land agent with Threave Rural, in Castle Douglas, said: “A lot of the private deals are going to forestry. Some people are sitting on a hill and thinking they could sell 200 acres off a bigger unit and reinvest the capital into their own business for things like infrastructure – or sell the hill land and buy better more productive type land to add to their business.

“In the last year we have seen a sharp rise in financial institutes and speculators coming into the market for planting. This has definitely firmed up the bottom of the market.

"What I suspect we are seeing is the supply of traditional tree planting land, that previously was further up the hill, has now dried up. But the appetite for it remained undiminished so buyers are moving on to better stuff.

“One or two farms in Dumfries and Galloway have gone to planting that I would never have expected. These were good, 500-acre places which were capable of being stocked at a cow and calf to the acre.”

NFU Scotland have voiced grave concerns about the direction of the land market. Vice-president Andrew Connon said: “The report shows that land that could be used to support the UK’s fragile food security is being speculatively bought at a grossly inflated price.


NFUS Vice President Andrew Connon

NFUS Vice President Andrew Connon


"This may be a short-term gold rush driven by a bet on future carbon values but there is a real risk that the effects are long lasting. I believe that this will undermine the primary function of Scotland’s land, which is to produce food.

“Forces are conspiring to drive up land prices way beyond the reach of most agricultural interests, not least those looking to start their farming business.

“We are now seeing a new wave of speculation in Scotland’s land market, and it is unacceptable to me that corporate bodies are allowed to offset and greenwash their emissions from other business activities simply by purchasing land in Scotland.

“Policy signals are driving blunt land use choices between food and forestry and attracting substantial interest beyond those that live and work on Scotland’s land.

“This is a subject we have already discussed with Scottish Government ministers and it is imperative that Scottish Government re-focus on urgently developing policy that incentivises integrated land use and which rewards farming activity so that the industry continues to deliver multiple benefits for society including addressing our food security needs.”

John Fyall, of Highland Rural, said: “It is not only forestry which is having a big impact on the land market, but also the surge in renewables, carbon sequestration and natural capital ambitions. It is a bit like the early days of the oil sector with a lot of demand for land.


Land agent John Fyall

Land agent John Fyall


"Current energy prices mean that projects which didn’t stack up a few years ago when energy was 7.5p kWh are now back in play and planners are being encouraged to take a more accommodating view. Government pressure is mounting to give consent as they want to reduce dependency on fossil fuels.

"Hydro, wind and battery storage are all driving demand for land particularly on less productive ground for traditional farming. We must also remember these are not just large companies, or foreign investors but current land owners and occupiers receiving windfalls and trying to protect their money from tax by investing in land.”

Speaking to land agents across the country The Scottish Farmer understands that marginal ground is being traded for the value of prime arable land five years ago. This is bringing land value well beyond what upland and hill farmers can pay which challenges the future of thousands of family farms.

New entrants and expanding businesses will find it near impossible to compete with investors from outside the sector. Even succession within businesses will be hampered as farmers looking to buy out siblings wont be able to offer market value and could be forced to sell farms which have been in families for generations.