New legislation enabling farming tenants to sell their tenancy could prove attractive to farmers seeking to acquire a secure tenancy, according to Scotland’s tenant farming commissioner, Bob McIntosh.
Very few farms are currently coming on the market to rent because landowners are concerned that the Scottish Government may introduce legislation giving tenants the absolute right to buy.
However, Mr McIntosh suggested that buying an existing tenancy might be an option worth considering in certain circumstances.
Speaking at a NFU Scotland meeting at the Thainstone Centre, Inverurie, Mr McIntosh said: “Potential buyers might be willing to pay quite a lot for a secure tenancy although its actual value will depend on how many years the tenancy has to run and the age and family circumstances of the existing tenant.
“A tenancy held by a farmer in his nineties with no family to succeed him will obviously not be worth very much.”
Mr McIntosh stressed that those buying a tenancy would have to accept exactly the same terms as the existing tenant had agreed with the landowner who, under the legislation, had very few grounds on which to object to the new tenant.
Farmers wishing to relinquish a tenancy are required to offer their landlord the first opportunity of buying.
If the landlord can’t or won’t buy the farm, then it can go on the open market for sale to a new entrant or “progressing” young farmer.
Mr McIntosh reminded tenants that rent reviews should be treated as a negotiation and landowners or their agent should not be presenting rent increases to tenants on a “take it or leave it” basis.
“Tenants should try to start negotiations five months before a rent review to give them time if they wish to present counter proposals to the landlord,” he said.
“It should be remembered that the rent should be based on how the farm was when you became tenant. Tenants’ improvements don’t count when it comes to determining any rent increase.”
Reporting on the progress of the Scottish Land Matching Service, former head of the Scottish Government’s agricultural policy division, Ian Davidson, said more than 300 enquiries had been received since the service was launched two years ago.
Mr Davidson said: “There is huge interest from the younger generation looking to get in to farming.
“The number of youngsters seeking to get their first step on the farming ladder outweighs the opportunities available by seven-to-one.”
The service has been established by the Scottish Government with widespread industry support to match up prospective farmers with established farmers willing to give a youngster the opportunity to farm under a partnership or joint venture arrangement.
Mr Davidson said: “It’s a slow process as we need to make sure the interests of both parties are compatible and Covid restrictions have slowed down the process. But 11 partnerships have been set up so far and are working well.”
Scottish farmers could soon be able to sell their tenancy to new entrants