Scotland’s more and more beneficial rural land is barely accessible to a restricted few as excessive demand from forestry, pure capital funding, and company property consumers continues to drive excessive costs, in accordance with a brand new report by the Scottish Land Fee.
The Rural Land Market Insights Report 2023 underlines the necessity for motion to make sure that communities, household farms, native companies, and people should not priced out of the agricultural land market attributable to sustained excessive land costs pushed by large-scale forestry and pure capital investments.
The report notes that, whereas forestry land costs flattened on the finish of 2022, demand outstripped a unbroken rise within the provide of land throughout the board, sustaining the “vendor’s market” of 2021.
Andrew Skinny, Chair of the Scottish Land Fee, stated: “The findings of our newest report underline the urgent want for motion, together with via the measures the Fee has proposed for the Land Reform Invoice in relation to higher regulation of great land gross sales.
“Scotland’s land is more and more beneficial and in demand for a number of causes. There are competing goals as Scotland makes fast adjustments to ship on the Scottish Authorities’s local weather and nature targets. Our land market report emphasises the necessity to actively form these adjustments via coverage and regulation to ship on Scotland’s ambition for a simply transition. However failing to behave now dangers exacerbating present problems with focus of possession – leaving people and communities more and more unable to amass the land they want.”
The report highlights that industrial forestry continues to be the most important driver of accelerating land values, notably in upland and non-arable agricultural land. Moreover, pure capital funding motivations stay broadly mentioned and are a key driver available in the market.
The report signifies that the proportion of land being offered off-market/privately could have barely diminished throughout the board as sellers search to benefit from aggressive market situations; nevertheless, extra smaller transactions seem to have been happening off-market/privately.
Company and institutional consumers are nonetheless very energetic and a driving drive in estates, upland, and marginal agricultural land, particularly the place peat is current. The report highlights that company and institutional consumers are more and more all in favour of land as a monetary asset and inflation hedge, with much less fast curiosity in land use.
Lastly, the report notes that, aside from prime arable, distinctions between land courses and makes use of have gotten more and more blurred as forestry, pure capital, and agricultural consumers all chase the identical land.
Mr Skinny commented: “The report signifies that the land purchases in 2022 had been doubtlessly reinforcing the sample of concentrated land possession in Scotland. A smaller pool of well-resourced purchasers had been essentially the most energetic available in the market, whether or not these be large-scale forestry pursuits, expansionist agricultural companies, institutional or company traders, or rich people.
“The costs achieved, and pace of many transactions, meant participation available in the market has been curtailed, with notably few alternatives for communities, new entrants and younger farmers to amass land, and assist diversify the sample of land possession in Scotland.
“The report emphasises the growing competitors for land amongst consumers with completely different motivations. The Fee’s work has proven that Scotland has little regulation within the land market in comparison with European and worldwide friends, and that the measures proposed for the Land Reform Invoice will assist tackle this disparity. Additionally it is clear although that wider coverage and regulation will likely be required. For instance, stronger regulation of rising carbon and nature markets is crucial for land use change to contribute to a simply transition.”
The Fee will likely be publishing recommendation later this month on the place it sees additional steps being required in coverage and regulation, particularly in relation to the growing funding and worth in pure capital.
