Farm Tenancies offer little security argues the TFA

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Rural Land:

The Tenant Farmers’
Association (TFA) says that rural landlords are now offering
‘cripplingly low’ security of tenure to their tenant farmers.

This, argues the
TFA, simply results in short termism – the short-term nature of
agricultural tenancies is crippling progression, investment,
sustainable land use and productivity on farms, it says.

The TFA thinks it is
‘unacceptable’ that 90% of farm tenancies let in 2018 had terms of
five years or under, while newly released figures show that security
of tenure on agricultural tenancies continues to decline.

These figures are
gleaned from statistics produced by the Central Association of
Agricultural Valuers (CAAV) in its annual Agricultural Land
Occupation Survey recently released. They show another worrying
decrease in security of farm tenure in 2018 in comparison to the
previous year.

There is currently
much higher demand for farm land than there is supply. This means
that it’s a landlord’s market, allowing owners to offer
short-term from tenancies at high rents, with little risk of void
periods. In addition, agricultural landlords have the benefit of
“generous and unconstrained” tax concessions, which the TFA is
arguing needs to be addressed.

These CAAV figures
report that the average length of tenancy on all farm business
tenancies granted in 2018 decreased from the 2017 figure of under
four years, to below three years.

When sub one-year
tenancies are excluded, that means the average tenancy length has
dropped from just below five years to four years overall last year.

Even fully equipped
holdings, which once would be expected to be let for much longer
periods, have seen reductions to just seven and half years in 2018,
which in most cases is around half the length of term seen two years
previously.

In 2018, in what the
TFA says is an ‘unacceptable’ situation, that 90% of farm tenancies
let in 2018 had terms of five years or under. Furthermore, 63% of all
new lets are offered were for under two years and on the most
insecure terms.

Chief executive of
the TFS, George Dunn, has said:

“These statistics
are simply dreadful. Everyone agrees that long-term relationships are
the best way to achieve positive outcomes for landlords and tenants.

“Yet, the market
is failing to deliver efficient or sustainable outcomes, in fact, it
is going backwards.

“It is now urgent
that the government steps in to address this major market failure, in
a sector that makes up one third of all UK farmland and where FBTs
represent about half that area.”

Mr Dunn added: “The
best way to do this would be through the taxation environment within
which rural landlords make decisions about letting land to encourage
longer term FBTs.

“However, with the
government cancelling next week’s Budget, another opportunity to
change this terrible situation will be missed.”

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