Scottish estates slipped in value last year but remain significantly higher than those of 2020.

According to Strutt and Parker’s latest annual Scottish Estate Market Review, the number of transactions fell by 18% last year, with the gross spend of £188m, down a massive £59m against the 2021 record-breaking figure of £247m.

“The estates market in 2022 did cool somewhat, compared with 2021 where we saw rapid and extraordinary growth, with investment in estates reaching record levels," said Robert McCulloch, head of estates for Strutt and Parker, in Scotland.

The highest price achieved for an estate last year was in excess of £20m with the average price being £8.2m, he said. This is down around 7% on the 2021 average price of £8.8m, but still way ahead of the five-year average of £5.4m.

Prior to 2020, most Scottish estates were purchased on a discretionary basis by wealthy buyers to enjoy, rather than looking for a financial return. However, this changed in 2021, when global pension funds, foundations, charities and corporate bodies started to focus on the natural capital investment opportunities presented by estates through the carbon accreditation markets for peatland and woodland.

Prices rose to reflect the new level of demand and the income generation potential from these emerging forms of land use.

This trend appeared to continue for the first eight months of 2022, when six estate sales were agreed at prices of more than £15m.

The autumn months saw reduced activity with estates either taking longer to find buyers at sale prices below expectations or remaining unsold.

However, the outlook for 2023 remains positive due to the opportunities that Scotland’s landscape and natural resources offer purchasers of varying budgets, Mr McCulloch said.

The analysis shows that 29 estates were offered during 2022, which is seven fewer than in 2021. Of these marketed, 23 (79%) found buyers compared with a five-year average of 69%.

The largest estate available was in excess 28,000 acres, with the smallest being 190 acres and the average was 6000 acres. The average size in 2021 was 3900 acres.

Off-market sales accounted for 39% of successful transactions, which is down 22% on 2021 levels when 61% of sales were off market.

Two estates sold for more than £20m and a further seven for between £10m and £20m.

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In total, 83% of buyers were UK-based and 17% were based overseas, with 39% individuals or families and 61% entities such as funds, charities or corporate bodies.

Mr McCulloch expects there to be an increase in the number of estates available in 2023. “We already have instructions to prepare for the sale of several estates," he said.

"Including upland and low ground properties with a variety of land use potential, including carbon and natural capital investment, commercial forestry, agriculture, renewable energy, leisure and residential.

"Some of these will be on the open market, while others will be marketed privately.”