Ken Thomson

The Scottish Land Commission has sponsored a two-stage research project on the rural land market, covering farmland, forestry and estates. The first stage “aimed … to provide an up-to-date picture of buyer and seller motivations, with a specific focus on understanding how increased demand for natural capital investment is driving activity”, while the second assessed market activity and land values for 2020 and 2021. This summary focusses on the results for the estate sector of the total rural market.

The first report noted a marked increase in land market value in 2021 compared to 2020, with many off-market sales (64% of the total in 2021). In recent years, the motivations of some purchasers of Scottish estates appeared to have shifted, with an increasing emphasis on environmental or landscape-scale ‘rewilding’, and a decline in sporting motivations among new (and some existing) estate owners, linked to legislative changes and declining social acceptability of driven grouse shooting. This changing pattern has occurred in parallel with a period of exceptionally high levels of investment in Scottish estates, driven by three factors:

  1. the impact of the pandemic on societal perceptions of the future way of working and a revaluing of rural lifestyles;
  2. wider acceptance of the climate and biodiversity crises and increased interest among buyers in ecosystem restoration; and
  3. increasing demand on global timber markets, combined with government and organisational commitments to achieving net zero within fixed timescales.

A marked shift in buyer types was also evident, with nearly half of all estates purchased in Scotland in 2021 sold to corporate bodies, investment funds or charitable trusts. Recent corporate interest was viewed as driven by increasing interest in restoring peatlands and the potential for carbon offsetting and developing carbon credits at large scales.

The second report utilised data from the Registers of Scotland (RoS), supplemented by information from estate agents such as Strutt & Parker (S&P), and covered sales over 25 hectares (ha). 31 estate sales were identified in each of the years 2020 and 2021, with a larger area (37,193 ha) sold in 2020 than in 2021 (33,181 ha) although the latter is almost certainly an under-estimate due to data gaps and delays. The average size of estates sold in 2020 was 1,283 ha compared to 1,144 ha in 2021, though with the overall median estate size (546 ha) considerably lower than the mean, indicating a size distribution highly skewed to smaller areas. The total average sale price in 2020 was £3.9M (totalling £122M), compared to £4M in 2021 (total £125M), the latter again a probable underestimate: the S&P estate market review for 2021 estimated £8.8M and £247M respectively.

The most common motivation for estate purchase in 2020-21 related to acquisition of a family home (22 estates, mostly smaller ones), followed by natural capital broadly defined, e.g. to include ecotourism (12 estates), with a smaller group of purchasers aiming at forestry (3), agriculture (3) and general (3) investment. In contrast to historical patterns, traditional sporting motivations (hunting, shooting, fishing, etc.) were a primary motivation for only a minority of purchasers.

McMorran, R., Glendinning, J. and Glass, J. (April 2022) Rural Land Markets Insights Report. Scottish Land Commission.

McMorran, R., Thomson, S. and Glendinning, J. (June 2022) Rural Land Market Data Report. Scottish Land Commission.

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