Tuesday, 11 September 2012
Growing demand for Scottish farmland pushes prices higher
Demand for commercial farmland in Scotland continued to surge ahead as prices reached record levels for the fourth consecutive period, says the latest RICS Rural Land Market Survey.
The average price per acre in Scotland – which has now almost doubled since early 2006 - increased to £3,906 during the first half of the year, as demand outstripped fresh supply.
This growth in demand across Scotland was met with a sizeable downturn in land availability. Chartered surveyors continue to report that the ongoing shortage of available land is a key factor in driving up prices. It was also noted that land price differences between east and west Scotland continue to deviate.
Bob Cherry FRICS, of CDK Galbraith in Ayr (pictured above) commented: “There is an increasing divergence between farmland prices in the east and west of Scotland, with land price in the east rising more rapidly.”
Across Great Britain, with supply so low, transaction levels dipped to their lowest level since the start of 2006. During the first six months of the year chartered surveyors reported that only 115 transactions took place (down from 298 in 2011).
Looking ahead, with commodity prices continuing to climb, Scottish respondents expect the current trend in commercial farmland values to continue. A net balance of 50 percent more chartered surveyors predict prices to rise over the next year, the highest reading since the second half of 2007.
RICS Scotland director Sarah Speirs commented: “Farmland prices in Scotland hit a record high yet again at the start of this year and very few transactions went through across the country as a whole. The critical driver behind this was that the amount of farmland coming onto the market simply couldn’t keep up with demand from commercial farmers looking to expand.
“With commodity prices now having risen for some time, and the situation is looking unlikely to change for the foreseeable future, understandably, chartered surveyors expect price rises to continue their upward trend over the coming twelve months.”
RICS is the world’s leading qualification when it comes to professional standards in land, property and construction.
In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.
Over 100,000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.
RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society.
RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.
The Ayr Office of CKD Galbraith is a Founder Member of the Elite Ayrshire Business Circle.