Natural capital has come to the fore of farmers’ concerns in recent years, with new support programs and subsidies focused on environmental goals.
Interest in a limited supply of properties with opportunities for public goods, tree planting and carbon credits from a wide range of buyer types has boosted both demand and prices.
Buyers are looking to plant commercial forests, create native forests, restore peat, diversify habitats and install wind turbines, as well as seek productive farmland and sporting opportunities, agents said.
See also: Private sales are gaining popularity at almost 50% of the land market
New type of buyer
Scottish agent Galbraith says demand for land for natural capital and rewilding is driving the market, which was already benefiting from the boom in the forestry sector.
Demand exceeds supply by a considerable margin, with only about 15 estates changing hands in a typical year.
Average prices are rising, along with large premiums paid for hill farms and plantation land.
Hill soil, until recently priced at £ 600-800 / acre, can now sell for more than double that value, especially where the potential for natural capital exists.
Emma Chalmers, Partner at Galbraith, says: “The sales of Glenlochay Estate in Stirlingshire in 2019 and Auchavan Estate in Angus in 2020 have both prompted a number of natural capital buyers to come forward, alongside those who were mainly interested in traditional activities.
“However, the sale of Kinrara Estate earlier this year saw the majority of potential buyers focus on forest creation and natural capital. This happened again when a livestock farm was marketed and sold privately, also earlier this year, with a secured natural capital buyer. “
Types of buyers include companies, institutions, investment houses, and individuals with a variety of motivations and interests, according to Galbraith.
As has been reported for the wider market, the proportion of private sales has increased significantly.
“With the growing understanding of climate change, we are seeing a growing desire to offset carbon use, both personally and by businesses,” says Ms. Chalmers.
“The need to be more visibly green or to achieve net zero goals means that the traditional estate, along with the mountain and livestock farms, is attracting increased interest from this new buyer of natural capital. “
Evelyn Channing, head of the Savills rural agency in Scotland, says the market for commercial tree planting is very buoyant, with a number of large funds looking for suitable land.
At the other end of the scale, where commercial tree planting may not be appropriate or permitted, there is a definite interest in land suitable for planting native trees that may be eligible for credit. carbon.
“Demand is on the rise across the board, with people looking to buy rural property for all kinds of reasons,” says Channing.
“In Scotland, 17% of new registered buyers are interested in land suitable for environmental and tree planting opportunities.
There is a very limited number of opportunities for properties that offer the potential for tree planting or other environmental angles, so there is a strong interest when one becomes available.
Factors affecting land value include soil types, access to forest roads, rainfall, existence of degraded peat (which may be eligible for peatland restoration projects), peat depth and habitat diversity.
“Investments in natural capital and the environment are a new and evolving market and it is too early to say whether it will increase or decrease in the future,” says Channing.
“The climate crisis is unresolved and land use is likely to be part of that solution, but we think we are five years away from knowing the real direction of travel.”
What’s on the market?
Agriculture and forestry
The Auchenlongford Forestry portfolio in Ayrshire is in the market with Savills for offers of over £ 8.25million.
It includes a 569-acre ranch, 1,463 acres of commercial forestry, two residences, salmon fishing and the potential for peatland restoration.
It is available as a whole or in five sets.
Property with potential
Near Inverness, in Inverness-shire, Goldcrest Land & Forestry Group is selling 1,200 acres of Saddle Hill for offers over £ 950,000.
The unit includes open heather moors, Caledonian pines, three burns, a lochan and the potential for peatland restoration, tree planting and rewilding.