Opportunities and risks of large-scale land acquisition

Description

With natural capital and afforestation driving market interest and land values, a new report by SRUC has identified associated risks that need to be managed.

Farmland values across the UK rose by 6.2 per cent in 2021, with Scotland experiencing the strongest growth in values of just over 31 per cent overall and 60.8 per cent for poor livestock land.

More than 40 per cent of farmland was bought by investors and amenity buyers over the past five years. Natural capital buyers are also increasingly important in the estates market, with £112 million invested in Scottish estates in 2020 – an increase of 55 per cent on the ten-year annual investment.

In addition, increased demand from institutional investors and financial institutions led to average sale prices for commercial forestry land exceeding valuations by around 50 per cent in 2021.

The report, co-authored by Professor Mark Reed - Co-Director of SRUC’s Thriving Natural Capital Challenge Centre, outlines the risks these trends could create for markets, land managers and rural communities.