Farms in Scotland have proved better investments than houses, but have lagged farms south of the border in England � and look set to continue doing so.

Scottish farmland prices have risen by 8% this year to up to �6,000 an acre for good arable fields, far outperforming a marginal increase in the residential market, Knight Frank said.

"The value of Scottish farmland continues to perform strongly," James Denne, the head of farm sales at the property consultant's Scottish office, said singling out pasture land as having proved a particularly good bet over the longer term thanks to a change in Europe's subsidy regime.

"While the old system favoured arable land, the single farm payment offers more generous support for livestock enterprises."

Diverging fortunes? 

However, the rise in Scotland prices has lagged those in England, which have soared by 13% in 2010, taking the bill for even an average acre to �5,769 an acre, on Knight Frank data.

"I do think that the market may start to flatten as low agricultural commodity prices, particularly in the arable sector, put pressure on farm incomes," he said.

"The new era of enforced austerity following the recent emergency budget could also impact on sentiment."

Farmers' market

While the English market has seen rising demand from investors and overseas buyers, often seeking a hedge against rising inflation, the Scottish market is being supported mainly by farming buyers.

"We are still seeing some enquiries for arable land from Irish farmers, but stock and dairy farmers from across the water, who were big buyers before the credit crunch, are now rare bidders," Mr Denne said.

The comments come as Knight Frank is attempting to sell the Vyrnwy estate in Wales, encompassing 23,000 acres, on a 125-year lease, with a guide price for �11m.