Borders farm land ‘at an all-time high’
Demand is outstripping supply when it comes to farmland in the Borders, say local agents.
Their views echo findings in the latest Land Market Survey, published by the Royal Institution of Chartered Surveyors (RICS) at the end of last month.
Farmland prices for the second half of 2013 remained steady, matching reported prices for the same period in 2012, say the surveyors. But the prediction, by 80 per cent of those responding, is for prices to rise over the coming year.
The cost of land increased slightly in the first half of 2013 to £4,438 per acre, but had levelled off in the following months, according to the survey. The average cost of an acre of farmland in Scotland in the latter part of 2013 was £3,750.
Knight Frank’s office head in Lauder, James Denne, said of the Borders: “As ever, demand outstrips supply. Arable land leads the charge, although the average price per acre is more like £6,500 to £6,750 per acre when taking into account permanent pasture, rough grazing and hill. It is definitely a two-tier market (ie arable and livestock).
“Farmers, investors and lifestyle bidders are all still in the market, and neighbours will tend to bid more strongly for neighbouring land in the face of opposition from more distant purchasers.
“We are instructed to sell land on both sides of the border this year. I expect strong interest – regardless of CAP reform and the upcoming referendum.”
At Edwin Thompson, Neal Thompson said: “Land values in the Borders and North Northumberland are at an all-time high.
“There is less demand for marginal livestock units, particularly north of the Border where those farms with large historic entitlements are likely to see a significant reduction in their Basic Payment starting next year.
“Conversely, there is strong demand for potential planting land, up to 1,300ft.”
Last year he said prime arable land averaged £8,750 an acre, secondary arable £6,500, good quality grassland £4,000, graze-only ground was £3,000, while planting land averaged £800 an acre.
Mr Thompson continued: “Price increases are being driven predominantly by commercial farmers and a good percentage of farms are being sold to neighbouring farmers.
“This year I expect good arable and dairy land to increase by possibly five percent, whilst the price for average land or land situated in less sought after areas will remain static or could, in some instances, fall.
“More generally, land has become so expensive that increasingly the really “go forward” businesses will find other ways to increase productivity – contract and share farming for example.”