Via Financial Times

When he left the army in 2013, 26-year-old Sandy Stuart joined his father on the family wheat and barley farm near Gifford in East Lothian, half an hour’s drive from Edinburgh.

His main challenge was to increase revenues from the farm to fund a second salary (his). Increases in rural land prices — in part because of its appeal to housing developers — meant that, after interest payments on the money required to buy more fields, farming them would not have been profitable.

So Stuart decided on holiday lets, establishing The Bus Stop, a short-stay accommodation business. Today this comprises nine decommissioned buses located throughout the farm — several featuring outdoor hot tubs — that provide accommodation for up to 36 guests at a time.

Falling country-house prices reflect the challenges faced by Scotland’s rural economy. The average price for a prime rural home — roughly the top 10 per cent by value — has fallen 3 per cent in the past five years, according to Savills. Over the same period, prime property prices in Edinburgh have increased 28 per cent.

A graphic with no description

Agents report that Scotland’s wealthy are forgoing the pleasures of a home in the country in favour of one in the city, and only venture into the countryside for spa days, sporting trips or long weekends — sometimes staying at places such as Stuart’s Bus Stop, or in glamping yurts (which have colonised many of the neighbouring farms, says Stuart). Most of his guests are from Edinburgh.

Five-bedroom house near Comrie, Perthshire, £2.3m
Five-bedroom house near Comrie, Perthshire, £2.3m
https://www.rettie.co.uk/properties/12715339/sales
Six-bedroom house, Perthshire, £795,000 (Rettie & Co)

Since fewer of today’s affluent Scots grew up in the countryside, those seeking a second home are more likely to look abroad, says Chris Hall of Rettie, a local agent. And those rich enough to afford a country estate, and who enjoy shooting or fishing, are more likely to pay to visit someone else’s. “They don’t want the cost and hassle of staff or to bear the foibles of birds that sometimes breed and sometimes don’t,” he says.

READ ALSO  Creditors Finally Wake Up To An Apocalyptic Reality: Bond Losses As High As 99%

“Twenty years ago, when I started working, two-thirds of my buyers were wealthy from inheritance, had grown up in the Scottish countryside and sent their children to boarding school, meaning it didn’t matter much where they were based,” says Hall. Today, two-thirds of his buyers have made their own money; few have been to boarding school or want to send their children away to board, meaning they need to live close enough to do the school run. For an increasing proportion this means living close to — or in — the city.

We particularly struggle [to sell] the very large rural Victorian houses — 10 to 20 bedrooms — that no longer have their land,” says Jamie Macnab, head of Savills country-house sales in Scotland. Many end up being used for “semi-commercial uses” such as residential cooking schools.

https://www.rettie.co.uk/properties/12715339/sales

Those in the market for rural homes typically want something within easy reach of Edinburgh or Glasgow that is fully renovated. Most self-made buyers are time-poor; the reverse of the inherited wealthy who are happy to spend years improving a fading country pile, he says. “The only [rural homes] that are selling are impeccable. Buyers need peace of mind that the property will be immaculate,” says Hall.

About an hour and a half’s drive from Edinburgh, Savills is selling a five-bedroom house near Comrie in Perthshire, on 31 acres, for £2.3m. In Kirkton of Kinettles, about 12 miles outside Dundee, the same agent is selling a six-bedroom house for £515,000.

And in Kinsburgh, on the Isle of Skye, The Isle of Sky Estate Agency is selling a four-bedroom home with a one-bedroom cottage for £670,000. It was listed in March for £735,000.

READ ALSO  SE: Wildfires Force 90,000 in California From Homes

The waning popularity of rural second homes for affluent Scots has been matched by the boom in short-stay luxury accommodation, which is providing supplementary income for farmers and estate owners.

Since he and his wife joined his parents in running the family farm, an 1,800-acre estate in the Scottish Borders, 34-year-old Peter Scott Aiton has helped diversify the farm’s income by developing a large 19th-century barn into a high-end accommodation business, hosting local shooting parties — mainly corporate entertainment groups, parties of friends and family trips — many of whom come from Edinburgh.

He works with two local estates that provide shooting access for his guests. The converted barn comprises nine bedrooms and offers catering by a private chef, with ingredients sourced from the farm.

House & Home Unlocked

© Dreamstime

Welcome to a new newsletter for smart people interested in the property market and curious about design, architecture and interiors. Every Friday, in your inbox.

Sign up here with one click

“Rather than owning a second home, visitors want it to be someone else’s problem,” he says. “The big difference is visitors’ expectations: the traditional Scottish holiday-let market — granny’s old flat with second-hand furniture and bringing your own sheets — is dead.”

About 30 miles south of Stuart’s farm and an hour’s drive from Edinburgh, Aiton’s farm is too far for his land to appeal to large-scale home developers. He says that up until 2008, many farmers developed farm buildings into homes that they sold to private buyers. But the sluggish rural-home market, higher development costs and tighter planning rules have lessened the appeal.

https://www.rettie.co.uk/properties/12350794/sales
Staircase in a Scottish country home
Seton Castle in East Lothian.
Seton Castle in East Lothian, £8m (Savills) © Neale Smith

Although they want to buy, Stuart and his fiancée are still in a rented home about 20 minutes’ drive from the farm. The area in which they live is close to Edinburgh and prices for good homes are high, he says. Near Gifford, Rettie is selling a six-bedroom farmhouse on 2.5 acres for £1.2m.

READ ALSO  Hydrogen Boom Could Lead To New Platinum Bull Market

“There are new-builds available for reasonable prices, but I don’t trust the construction so I am waiting for an older house at a reasonable price,” he says.

Selling land to finance it is out of the question. The farm may not be the most lucrative, but it is the family’s way of life. “You try not to look at the books too often,” he says. “There is still a desire for us to keep the farm even if it might not make the best financial sense.”

Buying guide

  • While the value of Scotland’s prime city homes have returned to levels before the financial crisis in 2008, the country’s prime rural homes are more than 28 per cent cheaper, according to Savills
  • Last year, 128 homes sold for more than £1m in Scotland, the highest number since 2007 — most of which were in Edinburgh

What you can buy for . . .

£450,000 A six-bedroom country house with a large garden
£2.5m An eight-bedroom period home on 25 acres 20 miles north of Glasgow
£8m Seton Castle, a 13-bedroom property on 13 acres in East Lothian

More at propertylistings.ft.com

Follow @FTProperty on Twitter or @ft_houseandhome on Instagram to find out about our latest stories first. Listen and subscribe to Culture Call, a transatlantic conversation from the FT, at ft.com/culture-call or on Apple Podcasts