Scotland’s landlords and tenants have been urged to factor the possible impacts which Brexit was likely to have on the agricultural sector into any rent review negotiations – and to consider whether this was the right time to make changes.
Making his first major announcement in his new role as the Scottish Government’s tenant farming commissioner, Dr Bob McIntosh flagged up the current uncertainties – and said that conditions within the agriculture sector were an important component of rent review discussions.
There are good reasons to consider whether this is the right time to make changesDr Bob McIntosh
• READ MORE: Farming news
“Rent reviews initiated this year will fix rents until 2021 and that period will overlap with the UK’s planned withdrawal from the European Union,” he said. He indicated that, given the uncertainty over the impact of Brexit on agricultural commodity prices and the possibility of reductions in support payments, there was a risk that rents fixed now could be significantly out of kilter with the marketplace within two years.
“While rent reviews provide a good opportunity for landlords and tenants to meet to discuss current issues there are good reasons to consider whether this is the right time to make changes unless there are pressing reasons for doing so,” he added.
Scottish Tenant Farmers Association chairman Christopher Nicholson said that the proposal was both welcome and sensible.
“STFA have been advising tenants to factor Brexit risks into rent reviews, in particular the prospect of falling support payments and commodity market uncertainty which make rent increases difficult to justify,” he said.
Claiming that previous calls for a rental standstill from STFA had been rejected by landlords and their agents, Nicholson said that, with no axe to grind, the commissioner’s call represented a genuine desire to see fair play – and the plea should be taken seriously by all parties.
He added that any tenant who felt they are being pushed to agree to an unfair rent rise should refer the matter to the commissioner.
NFU Scotland president Andrew McCornick said that both landlords and tenants faced an unparalleled level of uncertainty as a result of the Brexit decision, adding: “With little clarity on future support levels or what direction our agricultural policy may take, it makes sense to consider whether this is the right time to make changes until a clear picture emerges.”
• READ MORE: Tenancy sector ‘failing to benefit’ from land reform
Scottish Land & Estates chairman David Johnstone said that it was recognised as good practice to regularly review rents – and that Brexit should clearly be considered as one factor, “alongside many others”, when undertaking such a review.
He added that the service of a rent review notice did not necessarily mean that a landlord was seeking an increase but simply allowed the matter to be looked at on the due date.
“Brexit may bring both negative and positive effects in the short and longer-term, but our message for both landlords and tenants is to take account of each other’s business circumstances and maintain positive and constructive dialogue throughout future rent reviews,” said Johnstone.