Survey of the Agricultural Tenant Farmers

6 THE ABSOLUTE RIGHT TO BUY

Summary

1. Forty six per cent of tenant farmers agreed that an Absolute Right To Buy (ARtB) should be offered to all tenant farmers with a traditional secure 1991 tenancy. A further 26% said that it should be available to certain categories of tenant farmers with Secure 1991 tenancies. Twenty nine per cent said that no tenant farmers should be offered an ARtB.

2. Around a third (32%) would definitely like to purchase their tenanted farm, and a further third (32%) would possibly like to purchase their farm.

3. A third expected that they would be able to invest more in their business if they were able to buy their tenancy, and a further third expected that they could maintain current levels of investment.

6.1 Respondents were asked to indicate which of three statements came closest to their view on the Absolute Right To Buy (ARtB). Of those who gave an answer, 46% said that all tenant farmers with a traditional Secure 1991 tenancy should be offered the ARtB, and a further 26% said that certain categories^[17] of tenant farmers should have the offer of the ARtB, However, 29% said that no tenant farmer should be offered the ARtB.

Figure 6.1: Views on the introduction of ARtB
Q. Which of the following statements comes closest to your view on the Absolute Right To Buy (ARTB)?

Base: All respondents who gave an answer (2,844)
Source: Ipsos MORI

6.2 Respondents were invited to give a reason for the view they put forward on the ARtB, and over 1900 gave a valid response. Figure 6.2 below shows the ten most frequently given explanations of respondents' views on the ARtB.

Figure 6.2: Reasons for respondents being for or against the ARtB
Q. Please briefly explain why you are for or against the Absolute Right to Buy (ARtB)

Base: All respondents who gave an answer (1,910)
Source: Ipsos MORI

6.3 Seventeen per cent thought that the ARtB should be offered to tenant farmers who have rented for a long time, invested in the farm or run a good business. This view was given by 28% of those in favour of the ARtB for all tenants, and 23% of those who felt that some should have the ARtB.

6.4 On the other hand, 13% overall said that the introduction of ARtB would discourage, or had already discouraged, landowners from offering land to rent. This view was given by one-third (34%) of those who were opposed to the introduction of ARtB. The following quote gives one example of this view.

"A right to buy policy is totally wrong. It will discourage future landowners from letting land. Estates will become fragmented and not managed properly."

6.5 Satisfaction levels with landlords and views on the Absolute Right To Buy (ARtB) were closely linked. The majority of respondents who were dissatisfied with their landlord were in favour of the introduction of the ARtB for all secure 1991 tenancies (67%) with a further 22% in favour of its introduction for certain secure 1991 tenancies and 11% opposed to the ARtB. Opinion was more divided among those tenants who are satisfied with their landlord, with 39% in favour of the ARtB being made available to all secure 1991 tenancies, 27% of the view that certain types of secure 1991 tenancies should be offered the ARtB, and 34% saying that no tenant farmers should be offered the ARtB.

6.6 Support for ARtB for all traditional Secure 1991 tenant farmers increased with the number of Secure 1991 tenancies rented-in (26% of those with no such tenancies, 51% for those with one, and 55% for respondents with two or more Secure 1991 tenancies). Those who do not rent-in a Secure 1991 tenancy were more likely to say that no tenant farmers should be offered the ARtB (46% compared with 29% overall).

6.7 Support for the ARtB to be offered to all Secure 1991 tenancies also increased with the length of time the respondent or their family have farmed on the tenancy (Figure 6.3). While only 25% of those who have farmed on their land for 0-9 years supported ARtB for all Secure 1991 tenancies, the corresponding figure for those whose family has farmed the land for 175 years or more was 60%^[18].

Figure 6.3: Views on the introduction of ARtB by family length of tenure
Q. Support for ARtB by family length of tenure

Base: All respondents who gave an answer by length of tenure on tenanted farm (89; 1,306; 646; 413; 260)
Source: Ipsos MORI

Potential action should an Absolute Right To Buy be introduced

6.8 One-third (37%) of respondents who held at least one 1991 Secure tenancy said that they would definitely like to buy their tenancy, in principle, if the ARtB were introduced, while 35% said that they would possibly like to buy their tenancy. Fourteen per cent said that they would probably not like to buy and a further 7% said that they would definitely not like to buy their tenancy.

6.9 Among those who rent-in on a Secure 1991 tenancy, those whose families have farmed their tenancy for 175 or more years (39%), 50-175 years (42%), or 25-49 years (33%) were more likely to say that they would definitely want to buy their tenancy than those who have farmed their tenancy for 10-24 years (25%) or 0-9 years (30%).

Figure 6.4: Likelihood to buy tenancy if ARtB were introduced
Q. If the ARTB was introduced, in principle, would you like to buy your tenancy?

Base: All respondents with at least one 1991 Secure Tenancy who gave an answer. (2,077)
Source: Ipsos MORI

6.10 There was no clear relationship between size of holdings and whether respondents would either definitely or possibly like to buy their tenanted land should ARtB be introduced.

6.11 Views on whether ARtB should be introduced were aligned to whether respondents would in principle like to buy their tenancy (Table 6.2). Half (52%) of those respondents with a Secure 1991 tenancy whose view is that all 1991 tenancies should be offered the ARtB said that they would definitely like to buy their tenancy. A further third (34%) said that they would possibly like to buy. This compares with 29% and 43% respectively of those who felt that certain 1991 tenancies should have the ARtB made available saying that they would definitely or possibly like to buy.

6.12 Interestingly, of those respondents who were not in favour of the ARtB being made available to any tenant farmers, 14% said that they would definitely like to buy their tenancy and a further quarter (23%) said that they would possibly like to do so.

Table 6.1: Likelihood to buy tenancy by views on ARtB

	Would like to buy tenancy...				Base
	Definitely	Possibly	Probably not	Definitely not
ARtB should be made available to...	(%)	(%)	(%)	(%)
All secure 1991 tenancies	52	34	8	2	1,265
Certain secure 1991 tenancies	29	43	17	5	725
No tenant farmers	14	27	26	23	825

6.13 Respondents were also asked how land should be valued^[19] if the ARtB was introduced. Sixty-three per cent of respondents said that if the ARtB were introduced, the land should be valued at the sitting tenant value, while 12% said that vacant possession value should be used, and 7% that it should be valued at investment value (see Figure 6.5). Eighteen per cent did not know.

Figure 6.5: Preferred way of valuing land for ARtB
Q. If the ARTB was introduced, how do you think the land should be valued?

Base: All respondents who gave an answer (2,919)
Source: Ipsos MORI

6.14 Overall, 68% of respondents who held at least one Secure 1991 tenancy said that they were confident (28% very confident, 40% fairly confident) that they could afford to buy their tenancy if it were sold at sitting tenant value, while 20% were not confident, as shown in Figure 6.6.

Figure 6.6: Confidence of buying land by method of valuation
Q. How confident are you that you can afford to buy your 1991 agricultural tenancy if the land was sold at…?

Base: All respondents with at least one 1991 Secure Tenancy who gave an answer (2,043; 1,789; 1,783)
Source: Ipsos MORI

6.15 Among those who held a Secure 1991 tenancy and would definitely like to buy it, half (53%) were very confident of being able to afford to buy at sitting tenant value, with a further 38% saying that they were fairly confident of being able to do so. Furthermore, 71% of those who held a Secure 1991 tenancy and would possibly like to buy it said that they were very or fairly confident of being able to buy at sitting tenant value.

6.16 Overall, fewer respondents were confident that they could afford to buy their Secure 1991 tenancy if the land were sold at investment value (21%) or vacant possession value (18%) than if it was sold at sitting tenant value (68%).

6.17 There was a mixed picture in terms of whether or not tenants with a Secure 1991 tenancy would have to release land or business assets in order to help them buy their tenancy in the event of the introduction of the ARtB: 36% said that they would have to do so and 32% said that they would not need to, while 31% said that they did not know.

ARtB and views on future investment

6.18 Over a third (38%) of respondents with a Secure 1991 tenancy said that their level of investment in their business would increase in the future should they buy their tenancy, a further third (36%) said that their level of investment would be maintained, while 9% said that it would decrease (see Figure 6.7).

6.19 Respondents who were very or fairly confident that they could afford to buy their tenancy if the land was sold at sitting tenant value were much more likely than those who were not very or not at all confident to say that their level of future investment would increase (47% compared with 12%).

6.20 Additionally, respondents with two or more Secure 1991 tenancies were more likely to say that their level of future investment would increase (44% compared with 38% overall).

6.21 The following quotes are illustrative.

"ARtB is the best way to increase investment on farms. Our own situation is a limited partnership running for 30 years, with a post lease agreement. The owner has not and does not invest any funds in the holding. Owning the farm would give the security to us to pursue ideas and investments."

"If the ARtB was introduced it would increase the number of family farms who could invest in the future of Scotland… More ownership would bring more investment into farming and more jobs to the countryside."

Figure 6.7: Effect on investment of buying the tenancy
Q. If you bought your tenancy, what would be the effect on the level of future investment in your business?

Base: All respondents with at least one 1991 Secure Tenancy who gave an answer (2,062)
Source: Ipsos MORI

Implications of the Absolute Right To Buy

6.22 Respondents were asked about the extent to which they agreed or disagreed with a series of statements on the possible implications of the introduction of the ARtB. The results give a mixed picture. As can be seen in Table 6.2, respondents were more likely to agree than disagree with each statement. However, more respondents agreed with the statements that suggested that the ARtB would bring benefits to farmers than the statements that suggested increased risks or difficulties. For example, around three-quarters agreed that introducing the ARtB would:

• Make it easier to pass on land/farm through generations (78%)
• Give farmers more control over business decisions (75%)
• Allow farmers to sell land to release assets (74%).

6.23 Smaller proportions agreed (and around a quarter) disagreed that the introduction of the ARtB would:

• Make it more difficult for new entrants to rent land (60% agree, 28% disagree).
• Increase farmers' risk of negative equity (59% agree, 23% disagree)
• Expose farmers to higher debt levels (57% agree, 28% disagree)

Table 6.2: Views on possible implications of the introduction of ARtB

Thinking about the Absolute Right to Buy (ARtB) to what extent do you agree or disagree with each of the following statements. Introducing an Absolute Right To Buy would…
	Agree	Disagree	Unsure	Base
	(%)	(%)	(%)
Make it easier to pass on land/farm through generations	78	12	10	2,861
Give farmers more control over business decisions	75	15	10	2,855
Allow farmers to sell land to release assets	74	12	13	2,823
Lead to more investment in farms	70	18	12	2,841
Give farmers increased financial security	66	21	13	2,833
Discourage landowners from renting out land	65	22	13	2,863
Make it more difficult for new entrants to rent land	60	28	13	2,861
Increase farmers' financial risk of negative equity if prices fall	59	23	17	2,831
Expose farmers to higher debt levels	57	28	15	2,844

6.24 The following comments from tenant farmers illustrate the interplay between views on landlords, the future provision of land for rent, and views on the ARtB.

"It cannot be morally acceptable in 21st C for tenants like me to be subjected to years of feudalistic pressure from intimidatory landlords. My landlord has made every possible attempt to regain control of my land. These actions have not had the desired effect but I have been subjected to years of intimidation, costly legal & professional bills & my health has been detrimentally affected. ARtB would transform my life."

"Landlords appear to favour contract farming arrangements to leasing land. The reason is quite clearly that they wish to retain control over their land. They have little confidence in leasing land and the possibility of the ARtB being introduced is a major impediment to the creation of land tenure."

"If the Government wants to increase the area of land that is available to let, it must make it attractive to both landowner and tenant/prospective tenant. If the Government wants to open up land ownership to more individuals it should do this through the tax system not through ARtB."

"I am a bit torn about ARtB as I would not be farming if it were not for the chance of a tenancy. However I find myself getting more and more frustrated at the lack of care/love and efficiency my estate shows to my farm and the community in general. Their absence means they are very naive to the hardships of tenants especially the terrible year that was 2012/2013. I have a good relationship with my landlords' agents and staff because I have to!! Short term leases due to tax avoidance and ARtB threat mean I have no leverage to be able to negotiate better for improvements."