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November 11, 2011 9:55 pm
Scottish estates evoke images of vast expanses of moorland, sporting enthusiasts in pursuit of game, a castle on the horizon, perhaps. Behind such images there is a valuable sales market that remains relatively buoyant despite the continuing global downturn.
Experts are reluctant to extrapolate much meaning from sales volumes and prices, as only 15 to 35 estates go on sale annually and each is unique, making comparisons and trends difficult to justify. However, two key messages emerge from the past five years’ data (see graphic).
The first is that more estates have come on sale since the global downturn began in 2007, as long-standing, asset-rich but cash-poor owners have struggled with upkeep; the second is that the number of completed estate sales each year has remained roughly stable, meaning supply now appears to exceed demand.
However, the figures mask many nuances, notably one that suggests “perfect” estates – those free from road and air noise, easily navigable and with few intrusive public rights of way – are now rare and attract competitive bidding from prospective buyers when they do come to the market.
Those most in demand are the sporting estates with land and rivers well-stocked with deer and salmon respectively. “These are mainly in the Highlands and can attract eight or 10 rival buyers,” says Robert McCulloch of Strutt & Parker.
Glenlethnot estate at Angus, on the east coast, is on sale for £2.8m and has 3,200 acres with more than two miles of salmon and sea trout fishing rights, a well-regarded grouse moor, a loch used for wild duck flighting, and agricultural land earning £72,000 per year in European Union farm subsidies.
“It’s attracted over a dozen viewers from England, Scotland, Sweden, Denmark and France and is typical of the type of estate for which there’s been keenest demand,” says McCulloch.
These sporting estates are closely followed in terms of demand by those that specialise in agricultural land. “They are immensely popular with investors, often from overseas, who regard agricultural land as being as good as gold in terms of long-term safety for their money. A good farmhouse on the estate helps too, but it’s the land that counts with buyers,” says Ran Morgan of Knight Frank, another estate specialist.
His agency is marketing the Spott Estate at Dunbar, East Lothian for £22.5m – down from a £25m asking price in 2010. The estate is dominated by 1,800 acres of arable land, more than 200 acres of pasture and 350 acres of woodland. These combine to generate £233,000 a year in EU subsidies.
Some agents say there is another trend defining the Scottish estate market today – its global appeal, thanks to exchange rates that have made all British land and property attractive overseas. Scandinavian and Dutch buyers have for decades been a part of the estate-buying landscape but other nationalities are joining in.
“What marks 2011 out is the number of foreign buyers,” explains Anna Thomas of Savills’ Edinburgh office. She has accompanied prospective purchasers from 12 countries on tours of Scottish estates – a record, she says. “Benbuie Estate [on the Isle of Mull] has attracted bids from Hong Kong, the US, Germany, Italy, Switzerland and England as well as Scotland,” she says.
But although the best estates have been subject to global interest and bidding wars, others have been ignored in the flight to quality. “Anything that’s not 10 out of 10 struggles to sell. If an estate is blighted by noise, has steep stalking ground which makes it hard to navigate, or has Munros [hills over 3,000 feet popular with tourist climbers] will stick on the market for quite a while,” says Morgan.
Also in trouble are estates with a very large house, or with cottages or barns converted to homes. “This is symptomatic of wider mainstream housing market problems. Too much emphasis on residential creates a significant loss of appetite amongst buyers,” says McCulloch.
This fragility of the market means many estates are offered for sale either complete or in lots. Occasionally estates are transformed for more diverse purposes. The relatively small 450-acre Taymouth Castle estate in Perthshire, for example, dates from the 16th century and was known in recent decades for hunting and a dramatic neo-gothic castle.
But work is now underway by its current owners, Meteor Asset Management, to change its profile. The castle will become a hotel and luxury spa, the grounds will host an equestrian centre and golf course, walking routes will be created around the estate and an initial phase of 15 private residences will be built, selling at up to £1.2m each. Such diversity may be the future for the Scottish estate market.
● Strutt & Parker
● Knight Frank
● Taymouth Castle
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