Executive summary
This is the fifth report in the annual Rural Land Market Insights Report series. Based on semi-structured interviews with 15 land agents operating across farmland, forestry, estates, and natural capital sectors, the report analyses the performance of the Scottish rural land market during 2025.
Overall market performance
The 2025 land market was widely described as slow, static, and subdued. Activity levels declined across most sectors, with fewer active buyers and longer transaction times. While supply and demand were broadly balanced, this equilibrium has been reached at a lower level of activity, resulting in a “thin” market with limited competition. Buyers are increasingly cautious and selective, reflecting reduced confidence compared to the high-activity period of 2020–2022.
Macroeconomic factors – including high interest rates, inflation, and wider economic uncertainty – have been central to this shift. Policy changes, particularly around taxation following recent the UK Budgets, have further dampened confidence and slowed transactions, while rising input costs have reduced the attractiveness of land-based investments.
Forestry
The forestry sector experienced a significant downturn in 2025. Underlying activity levels were very low, with demand for both commercial forests and planting land falling sharply once a small number of large transactions are excluded. Investor confidence has been weakened by low timber prices, rising costs, and delays in approvals, particularly for planting schemes. As a result, transactions are taking longer and values—especially for marginal land—have declined.
Natural capital
The natural capital market has also cooled considerably following several years of rapid growth. Demand for land linked to carbon and environmental schemes has fallen, reflecting uncertainty around carbon pricing, lower than-expected returns, and increasing complexity in delivering viable projects. Buyers are now more cautious and require clearer evidence of income potential, marking a shift away from speculative investment towards more evidence-based decision-making.
Farmland
In contrast, the farmland sector demonstrated relative resilience. Although overall activity levels were lower, performance was stronger than anticipated, supported by demand from expanding farming businesses. Arable land remained particularly robust, while marginal land values declined due to reduced demand from forestry and natural capital buyers. Strong livestock prices supported some farm incomes, helping to sustain confidence in parts of the sector despite broader market pressures.
Estates and amenity markets
The estates market remained subdued, particularly for larger holdings, where both supply and demand have weakened. Smaller amenity estates have performed more steadily, supported by lifestyle buyers and those seeking diversified land use. The amenity and lifestyle sector continues to show underlying demand, although this has softened compared to the peak seen during the COVID-19 period.
