Increased demand for forestry coupled with the decline in margins resulted in hill farm sales in Scotland more than doubling on the year.

According to data from land agents, Strutt and Parker, the past 12 months saw a total of 24 hill farms come to the open market in Scotland in 2022, compared to 11 in 2021 and just nine in 2020.

"Hill farms accounted for 27% of the farms on sale in 2022, when they usually make up between 10-20%," said Diane Fleming, farm agent for the company in Scotland

“This signals that some farmers have been tempted to take advantage of the premium prices that have been on offer from forestry and natural capital buyers.”

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Research by the company shows that the value of land suitable for afforestation peaked during the first half of 2022 and reached in excess of £8000 per acre, in some instances. Prices did however cool in the second half of the year, believed to be as a result of the change in the rules on how carbon credits can be attributed to commercial plantations.

“Farms on the whole sold well, and with a record-breaking price well in excess of £20,000 per acre paid for some arable land on the east coast,” said Ms Fleming.

“The average value of prime arable land on the east coast was £9500 per acre which was much in line with 2021, but varied widely according to location, from an average of £4500 per acre in the Highlands to £16,000 per acre in the Lothians.

She added that the average price paid for grass leys increased from £3500 per acre in 2021 to £4000 per acre in 2022.

Overall, some 41,600acres were launched to the open market in 2022 – a 30% increase on the five-year average – with the main buyers being farmers looking to expand their businesses or invest rollover proceeds.

Last year also saw an increase in activity from non-farming investors who perceived land as a safer asset class compared to many other investment options.

Commenting on predicted land values this year, Ms Fleming said: “Based on our experience of the new year so far, we are expecting a strong supply of land to hit the market but for demand to continue to outweigh supply and values to hold.”