It is hard to believe that at the beginning of 2020, we were living our lives as ‘normal’ with little concern for the Coronavirus murmurings emerging from China. The biggest issue on most people’s agenda was Brexit, which quickly took a backseat as Covid-19 reached our shores in late January.
With 2020 being an extraordinary year for everyone, it is therefore perhaps no surprise that the performance of the farmland market in Scotland, in terms of supply and demand, was atypical relative to recent years.
Spring is routinely a busy time when farm sales instructions are being prepared for the open market. In 2020, spring brought lockdown and travel restrictions. Prospective sellers were cautious to commit to selling; faced with an unknown world, a fragile economy for investing sales proceeds and the additional unknowns caused by Brexit and whether or not a trade deal with the EU would be agreed.
On the flip side, active buyers were alert to this reduced supply of farms for sale and did not show the same restraint, competing vigorously for those farms available for sale, which saw demand quickly outstrip supply.
It should be highlighted, that our analysis detailed throughout this report only represents open market sales which masks a noticeable shift in vendor preference for off-market deals.
Based on our own knowledge of some of the private transactions that occurred, it is estimated that up to 30% of farms for sale during 2020 were available on a private and off-market basis.
Following lockdown, a number of vendors chose not to commit to open market advertising but were prepared to accommodate buyer interest on a private basis. With high demand from a frustrated and options-starved body of purchasers, this dynamic resulted in a number of successfully agreed sales without reaching the open market.
Until the pandemic is behind us, it will be unclear whether or not this is a trend which will continue, or if it is merely a response unique to a rare and specific set of market conditions.
Read our full market update for:
- Market outlook
- Supply of farmland
- Demand for farmland