No decision on changing farm rental values

The Scottish government yesterday said no final decision has been taken on proposed changes to the way in which farm rental valuations are set, following reports that it had decided to shelve plans for a radical shake-up of procedures.

A statement released by the Scottish Tenant Farmers Association (STFA) said that the administration had decided not to proceed with implementing changes to base values on productive capacity as had been proposed in the 2016 Land Reform Act - but a ScotGov spokespersons said that discussions on rent review provisions were ongoing:

“We will continue to engage with stakeholders, the industry and the Tenant Farming Commissioner to examine the range of additional rent review solutions to address the challenging economic agricultural conditions facing the industry.”

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Since the introduction of the Act, several years of negotiations have taken place between stakeholders over plans to move to a system based on the productive capacity of the land rather than rental values on ‘comparable’ units, along with the production of several lengthy reports on the issue.

With no agreement being reached on a practical method of introducing such a radical change, yesterday saw the Scottish Tenant Farmers Association state that the difficulties associated with designing this form of rent test had become obvious - and they stated that a fresh look would be taken at ways to modernise the rent review system to provide the ‘fairest and best solution’ for tenant farmers.

STFA chair, Christopher Nicholson said that In the meantime, rents would continue to be reviewed under the existing system, although he conceded that this was likely to be the case for several years:

“As an interim measure the Tenant Farming Commissioner, Bob McIntosh, is introducing a comprehensive Code of Practice on Conducting Rent Reviews to ensure that rents are reviewed transparently and correctly and proper account is taken of comparable evidence,” said Nicholson who made plain his view that working to the status quo indefinitely was not an option:

“And steps must be taken to create a rent test which does not place such a strong emphasis on an increasingly scarce open market for comparable evidence.”

NFU Scotland, Scottish Land and Estates and the Scottish Agricultural Arbiters & Valuers Association, confined their comments to welcoming the Tenant Farming Commissioner’s new Code of Practice on Conducting Rent Reviews, stating it would be of value to landlords, tenants and their respective advisors.

“NFUS recognises the importance of a smooth and transparent rent review process, where all parties are clear about rights and expectations and feel that they can use amicable discussions to reach an agreement that they feel is fair,” added union president Andrew McCornick.

He said the Tenant Farming Advisory Forum had been working to reach industry agreement on the best route forward for the whole let sector and recognised that further work would be required to reach a system which would be sustainable in the long term.

SLE’s Sarah-Jane Laing encouraged landlords, tenants and agents to familiarise themselves with the code which she said contained practical advice.