Land ownership across Scotland ‘set to change’

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