Scottish Tenant Farmers Association

News Release

 14th February 2018


 The Scottish Tenant Farmers Association is concerned to hear that one of Scotland’s foremost landowners is demanding excessive rent rises from his farming tenants, contradicting industry agreements which limited the amount by which rents should be increased.

David Johnstone, laird of Annandale Estates and Chairman of Scottish Land and Estates recently announced on the SL&E website that he was conducting a review of the rents on his tenanted farms. He also said that: “Rent reviews invariably attract debate and commentary and, given my position as chairman of Scottish Land and Estates, I felt it right that the estate should be transparent in that it is conducting its own rent reviews.”

It has now emerged that, although the rent reviews are at an early stage, Lord Johnstone’s opening bid is for rent increases of between 20% and 40%, despite rents having been reviewed a mere 4 years ago.

The joint industry guidance, agreed by SL&E, NFUS and STFA in 2015, set out a framework aimed at minimising any risk to the industry that might arise from conflict around rent increases for tenanted farms. The basis of this framework rested on a systematic and transparent process incorporating an additional sense test based on published data for UK inflation.  Although not compulsory, rent reviews conducted over the last few years have largely relied on this methodology to agree rents.

Commenting on the situation STFA Director Angus McCall said: “Regular rent reviews are a healthy feature of good landlord/tenant relationships and are to be encouraged. They allow rents to be adjusted up or down according to circumstances and avoid the disruptions to business that come with irregular and large changes in rent and which the industry guidelines sought to achieve.

“STFA Chairman Christopher Nicholson has been in contact with tenants on the estate and monitoring this rent review from the start. He has already expressed concerns to David Johnstone and Bob McIntosh, the Tenant Farming Commissioner, regarding the scale of the proposed rent increases and the lack of transparent evidence which would justify such an increase, or indeed any increase at all.  If the factoring agents had followed industry guidelines and had been able to justify an increase in rent it would have been limited to no more than the rate of inflation since the last rent review.  This would in practice be 6-7% over the last 4 years and in common with many other reviews these rent reviews would have taken place without any fuss and kept rents in line with comparable farms in the neighbourhood.

“The Tenant Farming Commissioner is being kept informed of the situation so it is anticipated that the rent review will now be conducted in an open and transparent manner according to the established industry guidelines. Tactics of the past must not be used to force an unreasonable rent rise in advance of the new rent test which will deliver fairer rents based on the productive capacity of the holding.”