Land own­er­ship across Scot­land ‘set to change’

The Scotsman - - Weather / Farming - By BRIAN HEN­DER­SON bhen­der­[email protected]­ing.co.uk

While Scot­land’s 2016 Land Re­form Act might have swung the leg­isla­tive see­saw in favour of agri­cul­tural ten­ants as in­di­vid­u­als, the ef­fects of the changes on the sec­tor as a whole might be less clear cut, a lead­ing ru­ral law ex­pert sug­gested this week.

And he ques­tioned if the think­ing which had pre­vailed in the ten­anted sec­tor over the past 50 years would still be rel­e­vant go­ing for­ward after the con­sid­er­able amount of se­condary leg­is­la­tion sur­round­ing the act was on the statute book.

Speak­ing at a meet­ing which looked at the chang­ing le­gal land­scape for agri­cul­tural te­nan­cies, Mike Blair of Gille­spie Ma­can­drew said that the new act spelt big changes for the ten­anted sec­tor – some of which had al­ready been fully brought into leg­is­la­tion but with other parts yet to be en­acted:

“The mas­sive ex­ten­sion in the num­ber of rel­a­tives who can legally qual­ify to take over a ten­ancy, to­gether with the pro­posal to al­low the assig­na­tion of a ten­ancy to a new en­trant or de­vel­op­ing farmer for money – if a landowner turns down the op­tion to buy the tenant out – means that there is con­sid­er­ably less chance of a land­lord re­gain­ing va­cant pos­ses­sion of his land,” he said.

He added that there was also a wide ex­pec­ta­tion that, de­spite the fact it was likely to be ex­tremely com­pli­cated to con­duct, new pro­vi­sions for rent re­views – based on the pro­duc­tive ca­pac­ity of the farm – which are likely to be in­tro­duced later next year were likely to lead to a fall in rents.

“This would point to it be­ing sig­nif­i­cantly less at­trac­tive for land­lords to hold on to long term te­nan­cies. And taken to­gether with some of the other changes, it just might be that land­lords could de­cide that they would make more money sell­ing off their land,” he said.

“And while no-one is bound to sell – and many will hold on to land for rea­sons other than sim­ply the in­come which it can gen­er­ate – in five years time we might see more landown­ers think­ing like those who have taken steps to sell to best ef­fect in re­cent years.”

He said that while this might re­sult in a less con­cen­trated pat­tern of land own­er­ship in Scot­land, the like­li­hood that land­lords would sell to the sit­ting ten­ants would see a fur­ther ero­sion in the al­ready de­clin­ing num­ber of se­cure ten­ancy agree­ments in oper­a­tion in the sec­tor – and the ma­jor­ity of land no longer farmed in-hand now tended to be ei­ther con­tract or share farmed, with landown­ers shy­ing away even from lim­ited du­ra­tion te­nan­cies.

But Blair also spec­u­lated that as it could now be eas­ier for a tenant to put a value on a se­cure her­i­ta­ble ten­ancy, this might of­fer the ben­e­fit of act­ing as se­cu­rity in fu­ture when bor­row­ing – but he warned that a re­al­is­able value was also likely to at­tract the in­ter­est of In­land Rev­enue on in­her­i­tance or assig­na­tion.

“It just might be that land­lords could de­cide that they would make more money sell­ing off their land”

MIKE BLAIR

Gille­spie Ma­can­drew

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