As markets slide farmland set to buck the trend

THE financial pages of all the quality newspapers have not exactly been awash with good news in recent days.

Stock markets around the world have seen their indices fall sharply for several months while the boom in house prices is most definitely at an end and there is every prospect of a sizeable number of repossessions before much longer.

The news last week that Scottish Equitable has made it clear that most of the 129,000 investors in its property funds will have to wait for up to a year before they can redeem their funds is also hugely worrying.

We are assured that the £2 billion is safe and this is not another Northern Rock fiasco in the making. However, as my colleague Rosemary Gallagher pointed out on Saturday, returns from commercial property have come crashing down and there are thousands of empty buildings around the UK which cannot attract tenants.

So what has all of this to do with farming and rural affairs in general? Perhaps more than one might think is the answer.

I recently had lunch with Charles Dudgeon of Savills' Edinburgh office in the New Club on Princes Street, a thoroughly enjoyable occasion with good food, fine wine topped off by a glass of decent port.

I duly reported the gist of our conversation, but I went back through my files over the weekend and believe what Dudgeon said is worth repeating: "In Scotland the average value for all types of farmland increased by almost 30 per cent in 2007 to £2,750 per acre… we expect farmland values to increase again during 2008 with a growth of between 10 and 15 per cent."

Dudgeon knows his subject and has invariably been proved correct in previous forecasts.