Scottish let sector continues to decline, warns CAAV

The amount of farmland let in Scotland continued to decline in 2015, as more landlords chose not to re-let when tenancies ended, according to a new survey of land occupation.

Published by the Central Association of Agricultural Valuers (CAAV) and the Scottish Agricultural Arbiters and Valuers Association (SAAVA), the fourth annual Agricultural Land Occupation Survey for Scotland showed a net loss of 12,000 acres of let land. “This is the largest loss since the first survey in 2012,” said Jeremy Moody, Secretary and Adviser to the CAAV.

The results of survey, unveiled at the SAAVA AGM in Dunblane on 15th March, covered more than 46,000 acres of let land where decisions were made about occupation, and revealed a worrying trend for the already declining Scottish tenanted sector. “Of the let units that fell vacant in 2015, just half were re-let, with the rest taken back in-hand or offered out on contract farming or other short-term arrangements,” said Mr Moody. “This has fallen from an historic re-let figure of 75%, and if sustained the decline in the Scottish tenanted sector will accelerate.”

Bare land (at 65%) also dominated new lettings. “Three times as many units let in 2015 were bare land than had houses and less than half the area of land let had houses,” said Mr Moody. “This seems a natural consequence of the pressure for restructuring and the difficulty of justifying new investment in fixed equipment. This shift is important for debate about policy, which often assumes that a holding will be a fully equipped farm with a house,” he added. “It can no longer be assumed that a holding is a self-contained farm – and the cost of rising expectations for the standards of agricultural housing may encourage this trend.”

Unlike England and Wales, landowners in Scotland were not taking advantage of increased land values to sell holdings when they fell vacant, said Mr Moody. “The Government’s Review Group said letting land in Scotland was seen as a high risk, low reward activity. Despite the simplicity and management of risk that a good tenancy system can offer, owners keeping land can be more comfortable with alternative arrangements, giving closer control over their land and which may have a lower investment demand, fewer taxation issues and less exposure to political uncertainty.” Equally, land was being ear-marked for forestry and development.

Perhaps surprisingly, half of the few new lettings to different farmers went to new entrants – double the usual fraction. “While this year’s figure may have been influenced by incentives for new entrants in the Basic Payment Scheme (BPS) and was only out of a small number of lettings, it suggests that encouraging lettings can create opportunities for new entrants as well as existing farmers.” Overall, land had been let as well as taken in-hand to take advantage of BPS in differing circumstances.

However, any new lettings were only where previous tenancies had reached an end – there was very little fresh land to the market, warned Mr Moody. If the size of the tenanted sector were to be maintained or grow, it is important that policy makers found a way to encourage the positive letting of land by private owners including retiring farmers.

“Having a vibrant tenanted sector is valuable for the fabric of the farming industry,” he added. “In England and Wales the amount of let land grew rapidly following the creation of Farm Business Tenancies in 1995 but then stuck with the introduction of the Single Payment Scheme. A good tenancy system not only offers opportunities to new entrants and retiring farmers, it provides a simple flexibility for farmers to grow and thrive. If the Scottish Government does not find a way to reverse this worrying trend, then farming will find other less regulated ways – such as contract farming – to look to its future.”

  • Full details of the survey are available – please contact Olivia Cooper, partner at Agri-hub PR services, on 01392 840009 or email [email protected].

Editors’ notes

The Central Association of Agricultural Valuers (CAAV) is a specialist professional body representing, qualifying and briefing over 2700 members practising in a diverse range of agricultural and rural work throughout England, Wales, Scotland and Northern Ireland.

CAAV members are agricultural and rural valuers who provide professional advice and valuation expertise on issues affecting the countryside from tenancy matters to sales and purchase of farms and land, from taxation and compulsory purchase to auctioneering, and from conservation issues to farming structures.

We are always happy to speak to the press – if you have any queries please contact Olivia Cooper, partner at Agri-hub PR services, on 01392 840009 or email [email protected].