Tenant farm sector remains stable, says report

 That’s according to the annual survey by the Central Association of Agricultural Valuers, which found the overall let area has remained static since 2003, when CAP area payments were starting to come in.

However, current changes in farming policy are likely to have an impact in the coming years, with uncertainty typically leading to shorter-term lets and confidence to longer-term ones, said Jeremy Moody, secretary and adviser to the CAAV.

“The let land market has appeared to have settled at an unnatural equilibrium, due in part to the stifling effect of area‐based entitlements and subsidies,” he said. 

“Whether de‐linking changes this is a matter for future surveys. In all parts of the UK, the tenanted sector will only grow if owners who do not want to farm themselves see letting land as an attractive option.” 

In England and Wales, fresh lets were marginally outweighed by losses, resulting in a net loss of 1,532 acres of let land. Around two-thirds of 1986 Agricultural Holdings Act tenancies, representing 68.6% of the let land area, were re-let on Farm Business Tenancies for an average of 7.26 years.

The vast majority of lettings were of bare land – only 6.6 per cent were fully equipped farms. And the average length of agreement increased with area and equipment; holdings with a house and buildings let for an average of nearly 10 years, while the overall average was 3.84 years. 

“However this includes everything from seasonal grass lets upwards, so where lettings of a year or less are excluded the average term was 5.42 years,” said Mr Moody.

New entrants obtained 20 per cent of lettings where occupation changed, and tended to be offered longer tenancies, with 35.6 per cent of them being for a term of more than five years. 

“Overall, the 2023 survey suggests some increase in activity in England and Wales, though not to the levels seen before 2005,” he said. 

In Scotland, the area and number of units changing hands continued to decline, to just 42 units covering 8,695 acres. That is down from 130 units covering 34,657 acres in 2020.    “Bare land lettings are now predominant in Scotland; only three of the 27 new lettings included a house, while five of the tenancies that ended and were not relet included a house,” says Mr 

With the stasis in land occupation, the CAAV is actively looking at ways to remedy this, and is working with government tenancy groups. 

Increasing the use and flexibility of our land occupation markets seems a critical reform for the future commercial success of agriculture,” said Mr Moody.

“In that task, the Republic of Ireland’s Income Tax relief for letting farmland for more than five years is showing strong and continuing signs of success in attracting retiring farmers to let out their land. That merits serious attention in the UK.”

The full report is available  at www.caav.org.uk/2023-2024-caav-agricultural-land-occupation-survey-2