It seems that the Scottish countryside is the new property investment hotspot. According to Savills, which analysed rural property sales in the county over the past two years, the market has enjoyed competitive bidding and sales achieved over the asking price. This is in sharp contrast to the residential sector, which has said goodbye to premiums over recent years.
Anna Henderson of Savills explained: "Looking at the Savills sales record over the past two years, average premiums of around 24 per cent over the asking price have been achieved. We have had competitive bidding situations in the majority of cases, and in two cases we achieved 95 per cent more than the asking price." This success is down to "sensible guide prices and realistic seller’s expectations", Ms Henderson added. "In around 90 per cent of cases we achieved sale prices within or above the range quoted in our initial marketing reports."
Analysis has shown that it isn’t just farmers looking to expand that are snapping up rural properties, with clients outside the sector increasingly appreciating the "strong performance of farmland", Luke French of Savills elaborated. Rural real estate has consistently performed well against other investment classes and in 50 per cent of cases, non-farmers have been making offers on land.
England is also enjoying somewhat of a resurgence in the rural market, with consecutive annual growth recorded throughout the last decade. Across the UK, farmland looks set to continue its upward momentum, with Savills predicting an increase in value of 40 per cent over the next five years. With traditional investment locations, such as London, expected to hit a bump in the road going into 2013 and beyond, rural land is proving to be a safe investment prospect.
However, Alex Lawson, director of farms and estates at Savills, stresses that people will still be looking for quality stock. Despite limited supply, only the best asset classes will emerge victorious, while secondary and tertiary quality land could struggle to find buyers in this competitive market, especially if priced unrealistically.
- Wednesday 12 December 2012