Land ownership in Scotland is at risk of becoming more elitist and unequal because wealthy corporations and forestry companies are dramatically driving up land prices, a new study has warned.
The report from the Scottish Land Commission found that a significant number of Highland estates and hill farms were sought by corporations last year as an investment or as sites for planting new conifer plantations.
Their purchases added to an overheating land market in Scotland that has driven prices to record levels, the commission said. Financial investors, foresters, farmers and wealthy conservationists are chasing the same estates and farms once they go on sale.
This adds to Scotland’s very concentrated pattern of land ownership, it said, by making it harder for younger farmers, environmental groups, local communities and less-wealthy buyers to afford the higher prices.
Last year the commission reported that a surge in land prices in Scotland in 2020 and 2021 was driven heavily by corporations and wealthy individuals wanting to invest in so-called natural capital projects.
Called “green lairds” by some critics, those buyers were keen on projects to restore peatland, create new forests and enhance nature conservation as climate-friendly ways of storing CO2 and increasing biodiversity.
The commission’s latest report, based on interviews by Scotland’s Rural College (SRUC) with dozens of estate agents and experts, found the interest among natural capital buyers waned last year, with a shift towards companies seeing land as a purely financial or commercial asset.
As in 2020 and 2021, those firms have tended to be absentee owners. They may have little interest in changing what the land is used for, which leads to stability for tenants and estate staff, but it means the land is not used for more beneficial purposes.
Andrew Thin, the commission’s chair, said these trends risked reinforcing existing inequalities. Scotland has one of the least-regulated land markets in Europe; comparable countries in western and northern Europe limit the size of estates and have strict residency rules.
“A smaller pool of well-resourced purchasers were the most active in the market, whether these be large-scale forestry interests, expansionist agricultural businesses, institutional or corporate investors, or wealthy individuals,” Thin said.
The commission’s study also identified important contradictions between different government policy priorities.
In some cases, forestry companies bought cattle and sheep farms to grow timber. Replacing cattle with trees means carbon emissions from farming will fall while carbon sequestration by trees will increase.
As Scotland has failed to cut carbon emissions from farming and is forecast to miss its tough targets to cut CO2 emissions by 70% by 2030, that is a policy benefit. Conversely, the higher prices and growth in commercial forests undermine policies to increase nature diversity and economic diversity in rural areas.
Hamish Trench, the commission’s chief executive, said that added to the pressure on the Scottish government to intervene in a new land reform bill due to be tabled later this year.
He said that could include new public interest tests on companies seeking state subsidies for tree-growing or nature conservation, and new requirements for absentee owners to involve local communities in their estates, such as shared-ownership models or leasing their land.
Sarah-Jane Laing, chief executive of Scottish Land and Estates, the umbrella body for landowners, said it “fundamentally disagreed” with the commission’s conclusions. She said government data showed a surge in community ownership in Scotland.
“Where there is a genuine desire by communities to own land, legislation already exists to make that happen,” she said.
Laing said the government itself was Scotland’s largest landowner, and large-scale operations were often very effective. “Purchases of large-scale landholdings do create opportunities for other businesses, enterprises and communities to benefit.”
