Farm sales boom

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Following the uncertainty created by CAP Reform which caused many buyers and sellars to sit tight in 2014, the first quarter of 2015 has seen a big jump in farm sales in Scotland, says James Butler of Strutt & Parker.

In the past three months Strutt & Parker has agreed the sale of six farms (five stock farms and one arable farm) across Scotland – an unusually high number for this time of year.

James Butler commented: “CAP Reform has now reached a stage where buyers are prepared to commit to a purchase as they have the confidence that they will obtain a Basic Payment during the next five years. This means that they have a better understanding as to what their annual payment will equate.

“The uncertainty created by CAP Reform had little impact on the arable market in 2014 due to the limited supply. However, with margins tight in livestock farming and with a greater number of grassland farms to choose from, buyers were holding off with a purchase until they had the confidence that the Basic Payment Entitlements can be secured.”

All six of the Strutt & Parker sales are to buyers from outwith Scotland and include a combination of investors and farmers.

These buyers are attracted to Scotland due to the lower average land values than in England and Ireland, and the opportunity to get a bigger acreage.

James concluded; “We expect momentum to build up in the farmland market as we pass 15th May 2015 which is when vendors can transfer Entitlements. In addition, the Basic Payment Scheme will continue to bed in and buyers will have the certainty that they can obtain Basic Payments. This will fit in with our usual busiest time of the year in the lead up to the Highland Show in June”.

For more information please contact Strutt & Parker’s Edinburgh office on 0131 226 2500.