Demand for Scotland’s farms, land and agricultural businesses is beginning to recover, led by a growing number of lifestyle buyers looking to invest in the sector.
The market for farms and land is showing very positive signs of recovery, which is welcome news for Scotland’s hard-pressed farmers, food producers and land-owners.
Rising demand for agricultural and land businesses will almost certainly result in the buyers investing in their buildings, plant, machinery, infrastructure and services. Scotland’s rural economy will benefit, and we will hopefully also see an increase in rural employment.
Agricultural land, forestry and existing renewable assets are increasingly seen as a safe option for buyers seeking a safe investment option. Farmland offers a secure investment, but with a relatively low return of capital. Renewable assets such as wind turbines are attractive to investors looking for a good yield from a green investment. The demand for forestry will fuel the interest in some upland farms which might be difficult to sell as commercial farms. Forestry has offered an excellent capital growth, which is tax free and again deemed to be a safe green investment.
The new wave of lifestyle investors should be welcomed – they could provide an attractive option for owners looking to exit and retire.
The number of potential purchasers looking to relocate to Scotland’s rural economy will have increased with Covid-19. For many decades land values have been influenced by non-agricultural factors and tax. New non-farming owners often provide opportunities to lease land, offer contracting options, improve infrastructure and stimulate general economic activity.
Every buyer needs a seller and the new wave of buyers should be strongly welcomed.
If require more information or would like to arrange a call, please get in touch.
The information in this update should not be regarded as financial advice. This is based on our understanding on 30 July 2020. Laws and tax rules may change in the future.