Rural Exchange

Investment Decision Making for Land

A Rapid Evidence Assessment of Investment Decision-Making for Land 

This report forms part of our research on land markets and land use change. It aims to understand whether recent land transactions are leading to (and fueled by) land use change, for example towards achieving net zero. Relatedly, it aims to explore the influence of financial support mechanisms on land values, particularly the recent interest in carbon schemes.

This report is the result of a Rapid Evidence Assessment of investment strategies in land and land values across themes of forestry, renewable power, and environmental and social governance.

The review focuses on processes of private sector investment. While public and community decision-making is relevant to land market outcomes, for tractability the review focusses on the decision-making of private sector agents such as institutional investors, energy companies and forestry companies.

What were we trying to find out?

Land values have been rising in Scotland. There is now increasing demand and competition for land emerging from private sector investors. These new motivations, investment strategies and decision-making processes need to be understood. This project seeks to explore key factors which influence people's decisions when they choose to invest in purchasing land in Scotland. Through gaining a better understanding of factors influencing demand for land, it is hoped more can be understood about rising land values.

What did we do?

We searched literature on motivations for purchasing land. Insights from the literature were used to produce a general framework of factors influencing land values and land use concentration in Scotland.

What did we learn?

We identified general decision-making factors which influence demand for land and land values across different forms of investment:

  • Resource availability
  • proximity to market
  • fiscal incentives
  • policy and regulation
  • portfolio diversification
  • market expectations, risk and uncertainty
  • environmental impact and social acceptance
  • agent level factors

From this research, we developed a new conceptual model. The new conceptual model demonstrates the factors which influence land values, including financial mechanisms such as tax breaks, subsidies, grants and private market carbon payments.

What do we recommend?

We recommend that the new conceptual model is used as a useful framework by Scottish policy-makers to understand the complex (and often interrelated) factors that influence land values. 

What happens next?

In coming years, the model will be applied to better understand land use decision-making and changes in land values across a range of case study contexts.

Read the full research report and research briefing below.

Further Reading

More within the Investment Decision Making for Land project

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Mapping Scottish Landownership

This research is part of a wider project "Impacts of land-based financial support mechanisms on land values, land ownership diversification and land use outcomes" (SRUC-E3/C3-1). This report demonstrates our work...[more]

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Motivators & Behaviours in Land

Investment into Land: Key Motivators and Behaviours of Scottish LandownersThis report forms part of our work concerning decision-making around investment into land. It follows on from Rural Land Values, Sales...[more]

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Rural Land Values Investment Trends

This research briefing is part of our Scottish Land Insights project. It follows on from our Rapid Evidence Assessment of Investment Decision-Making for Land, Assessing Land Use Change: International evidence...[more]

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Investment Decision Making for Land

A Rapid Evidence Assessment of Investment Decision-Making for Land This report forms part of our research on land markets and land use change. It aims to understand whether recent land...[more]

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Land Valuation Formation Influences

This report forms part of our research on land markets and land use change. The project aims to understand whether recent land transactions are leading to (and fueled by) land...[more]

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Rural Land Values & Diversification

Rural Land Values and Land Diversification: This research briefing covers two key areas: how land is valued and what land ownership diversification means to different stakeholders involved in land. ...[more]

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Assessing Land Use Change

This report provides a review of behavioural models used to understand what motivates landowners and how they make decisions about land use change. It looks at the financial mechanisms used...[more]


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