Landlords 'less likely to re-let land' after court ruling

A LEADING agricultural lawyer predicts that less land will become available for rent.

That was the view of Colin Clark, of Pagan Osborne Solicitors, after reviewing the landmark ruling in the case of Morrison Low vs Thomas Paterson, for Moonzie Farm, Cupar.

The judgment granted a reduction in rent. The landlord had requested a large increase.

One problem facing Scottish agriculture, Clark said, is the limited land available to let.

"In this case, a farm of about 470 acres with a farmhouse and cottages provides a return in rent of 20,800," he said.

"If the farm is worth, say, 5,000 an acre, including buildings and houses, its value is 2.35m, and the return on investment is only 0.87 per cent.

"The figures showing the return a landlord makes on their capital investment couldn't be a clearer indication of why there is so little land available for let on traditional tenancies and why many landlords are not willing to re-let land when it comes back in hand."

Clark added: "An unfortunate consequence of this case may be that even less land is available for let in the future." He also commented on the ownership of the single-farm payment subsidy, where it was ruled that this belonged largely to the tenant and did not form part of the farm income.

"In tenanted situations, if the SFP represents the only profit, and if it is not to be taken into account, a tenant might argue that no rent should be paid," he said.