Strutt & Parker's latest annual Scottish Estate Market Review shows the number of transactions fell by 18% in 2022, with the gross cumulative sum spent on Scottish estates ending up at £188m, down from a record-breaking £247m in 2021.

 Robert McCulloch, head of estates and farm agency for Strutt & Parker in Scotland, says: "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.

 "Yet while we have seen investment and values dip in comparison to 2021, the Scottish estates market remains incredibly strong with total investment and average sales prices still significantly higher than prior to 2020.

 "The highest price achieved for an estate was in excess of £20m and the average sale price was £8.2m. This was a decrease of about 7% on the 2021 average price of £8.8m, but still way ahead of the five-year average of £5.4m."

 Pricing

 The research comes at a time when there is considerable public interest in how the rural land market in Scotland may be changing, with a particular focus on the impact of increased demand from non-farming investors.

 Prior to 2020, most Scottish estates were purchased on a discretionary basis by wealthy buyers to enjoy, rather than looking for a financial return.

 This changed during 2020 and 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 concluded or agreed at prices of more than £15m. But the autumn months saw activity slow with estates either taking longer to find buyers at sale prices below expectations or remaining available for sale.

 Mr McCulloch says the evidence of a cooling in market sentiment should perhaps come as no surprise with all the relevant background factors, such as rising interest rates, inflation, the cost-of-living crisis, and the war in Ukraine.

 But the outlook for 2023 remains positive. "While there were undoubtedly headwinds which produced a little more deliberation amongst purchasers last year than in 2021, and some of these continue to blow, the opportunities that Scotland's landscape and natural resources offer purchasers of varying budgets – both at a landscape scale and at more modest levels – are likely to dictate another year of active trade in the sector."

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

 The largest estate available for sale was over 28,000 acres, with the smallest being 190 acres and the average was 6,000 acres. The average size in 2021 was 3,900 acres.

 Off-market sales accounted for 39% of the successful transactions, which is a decrease of 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.

 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 says he 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, 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, so I would urge active investors to contact us to ensure they are aware of purchasing opportunities that may be of interest."

 Strutt & Parker tracks the sales of Scottish estates separately to the sale of farms and other blocks of farmland as it is such a distinct market. For details of trends in Scotland's wider farmland market read our Scottish Farmland Market Review.