SIR, – Recent statements made to the press attributed to a leading land agent and reported in The Scottish Farmer last week (‘Tenant’s ‘right to buy’ restricting farm supply’) are inaccurate, misleading and cloud the facts.

In fact, in an opinion piece for The Courier on February 27, the same Malcolm Taylor called on the Scottish Government to ‘abandon all ideas of rights to buy for tenancies’ (1991 Act tenancies accepted). 
He was not calling for existing tenants’ rights to be repealed but for clear signals from government that future rights to buy would never be extended to other types of tenancies. A position STFA has always supported.

The 1991 Act tenants have had a pre-emptive right to buy since 2003 should their landlord choose to sell. Clearly, in the public interest, the pre-emptive RTB has enabled many secure tenanted holdings to become owner-occupied. 

This is a move which allowed the vast majority to increase investment to levels not normally seen in the tenanted sector and a positive benefit to the Scottish economy. 

Following the first elections to the Scottish Parliament in 1999, tenancy reforms have focused on making available new limited duration leases (LDTs) as a means of letting land which would be attractive to landlords.

Since the introduction of LDTs in 2003, reforms in 2011 and 2016 have made modifications to LDTs to meet the requests of landlords, and the signs are that these are now being used. 

ScotGov’s latest report on the tenanted sector indicates an annual increase in rents of 4% which is attributed to the increased use of the new LDT leases. 

Every effort has been made to explain that no form of right to buy will ever apply to these new leases.

Unfortunately, there remains a minority of landlords and land agents who peddle the myth that a right to buy is preventing the uptake of new leases, ignoring the efforts of successive Scottish Parliaments to tailor LDTs to the needs of landlords.

While many landlords are making good use of LDTs, their uptake is being restricted by current fiscal measures which work against the tenanted sector. The treatment of Capital Gains Tax (in particular the availability of ‘entrepreneurs’ relief’), Inheritance Tax and Income Tax all favour contract farming over tenancies, and until there is a level fiscal playing field, landlords will look to take advantage of tax benefits that can only be gained by in-hand or contract farming. 

In addition, Land and Business Transaction Tax (LBTT) is the latest fiscal measure that, without exemptions, will deter the use of LDTs of longer term length.

With the exception of LBTT, these fiscal measures are reserved to Westminster and there is little the Scottish Government can do to make them work for the tenanted sector instead of against it. 

The UK’s tenant farming bodies have lobbied Westminster to make necessary fiscal changes, so that landlords who make use of long-term leases are fiscally rewarded, rather than penalised. 

With the ink barely dry on the Land Reform Act, there are unlikely to be any major changes to tenancy legislation in the near future. 

The current letting arrangements provide a range of options to meet most circumstances and if farming fortunes decline post-Brexit, landlords and their agents may well be glad to take advantage of them and have a tenant to take on the responsibility of farming and looking after the land.

Christopher Nicholson

Chairman of STFA