GROWING YOUR PROFITS


Factors constricting the market include,


ironically, a continuing fall in long-term supply. Here Scotland has experienced broadly the same downward trend in acres for sale as the rest of the UK. For other assets, this would work to drive up prices. But here it has worked towards an intensifying scramble for quality and contributed to a growing disparity in performance between the values of prime arable land and rough grassland. So there’s land – and there’s land, with wide


price variance. According to Dudgeon, the best arable land in Scotland can currently fetch £8,000 to £10,000 an acre, good pasture can go for £3,500 to £5,000, and secondary pasture for between £1,500 and £3,000 an acre. Annual returns from farmland are generally


modest and can be subject to considerable swings. Weather variability can wreak havoc with what had seemed assured annual income.


Yields are typically low – between 1.5 per cent and 2.5 per cent on average. Capital gain is modest on anything other


‘Non-farming money is chasing best arable land and upland hill ground for tree planting’


than a medium- to long-term view. Compared with other asset classes over a short period of three to five years, even prime farmland can come to look stodgy when the stock market is enjoying a bull run and residential property is rallying on the back of ultra-low interest rates. The farmland market in Scotland, as


elsewhere, is by no means free of upset. Among the issues besetting farmers at the moment are changes in European Union subsidies and worries over possible alterations to the Capital Gains Tax and Inheritance Tax regimes. Then there is land reform. The Scottish


Government’s Land Reform Group has identified 60 recommendations for change in areas such as succession laws, sporting rights and rates, reintroduction of farmland rates,


WWW.SCOTTISHFIELD.CO.UK 223


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