The Scottish Tenant Farmers Association is calling for a moratorium on all rent reviews until the dust settles on Common Agricultural Policy (Cap) reform and the government completes its review of agricultural holdings.
Chairman Christopher Nicholson says all rent reviews should be put on hold in the same way many landlords have put the brakes on letting land in the meantime.
He also called on land agents to lower their rent expectations in 2014, in the wake of figures from Smiths Gore which reveal rents have risen for the third year in a row – up 16% in 2013 – rising at their fastest rate since 2009.
He said the land agent’s figures for arable rents south of the border – open market rents rose 57% to average £160 an acre in 2013 with traditional AHA tenancies up 30% to average £85 an acre – backed calls for an urgent change to the rental structure in Scotland.
“The restricted market for tenancies in Scotland has led to some massive rents which will inevitably drive all rents upwards with little prospect of ever falling,” said Mr Nicholson.
“Unlike Scotland, England operates a two-tier system with no direct comparison between sitting traditional tenants and open market rents. As a result, long-term tenants in England are not subject to the same rental pressure as their counterparts north of the border.”
He said unless Scotland moved to a similar two-tier rental system, many tenants would continue to see savage rental increases as a result of an “over-heated open market”.
Landowners body – Scottish Land and Estates – last night rebutted calls for a halt to rent reviews, warning it would do more damage than good.
Chief executive Douglas McAdam said: “Reviews provide an opportunity for dialogue between tenant and landlord and in the overwhelming majority of cases, reviews are carried out amicably to the satisfaction of both parties.”
He said the rental review process did not require a change to legislation, as found by the independent Rent Review Working Group, although the process could be improved through training, good practice and improving relationships.
A Scottish Government spokeswoman last night said the ministerial-led review of agricultural holdings legislation was currently considering how best to “breathe new life” into the tenant farming sector.
She said: “The group is keen to hear from both tenants and landlords on their experiences of tenant farming – including rent reviews, which are already regulated – and to gather views on how to increase the number of tenancies, and create opportunities for tenant farmers and new entrants.”