Survey of the Views of Owner Occupier Farmers on Current Issues for Tenant Farming

4 ABSOLUTE RIGHT TO BUY

Summary

1. Around a quarter of respondents (24%) said that all tenant farmers should be offered the ARtB with a further 22% saying that certain tenant farmers should be offered the ARtB. Less than half of respondents said that no tenant farmers should be offered the ARtB.

2. The majority of respondents agreed that the introduction of ARtB would discourage landowners from renting-out land and make it more difficult for new entrants to rent land.

Views on the Absolute Right to Buy

4.1 Respondents were asked to indicate which of three statements came closest to their view on the Absolute Right to Buy (ARtB). As shown in Figure 4.1, more than half of respondents said that all or certain tenant farmers with a traditional secure 1991 tenancy should be offered the ARtB (56%), with 24% saying that all tenant farmers with such a tenancy should be offered the ARtB. Less than half of respondents said that no tenant farmers should be offered the ARtB (44%).

Figure 4.1: Views on the introduction of ARtB

Q. Which of the following statements comes closest to your view on the Absolute Right To Buy (ARtB)?

4.2 When asked how land should be valued^[12] if the ARtB was introduced, there was found to be no clear consensus in respondents' opinions. A third (30%) said that the land should be valued at vacant possession value, 29% said it should be valued at sitting tenant value, with 5% saying it should be valued at investment value. A third (36%) of respondents did not know how the land should be valued (Figure 4.2).

Figure 4.2: Preferred way of valuing land for ARtB

Q. If ARtB was introduced, how do you think the land should be valued?

Implications of the Absolute Right to Buy

4.3 Respondents were presented with a series of statements on the possible implications of the ARtB and asked to what extent they agreed or disagreed with each. As shown in Table 4.1, overall, respondents' answers suggest mixed views over the introduction of ARtB and its potential impact on the farming sector.

Table 4.1: 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/Don't know
	(%)	(%)	(%)	Base
Discourage landowners from renting-out land	63	11	26	274
Allow farmers to sell land to release assets	58	10	31	270
Make it easier to pass on land/farm through generations	58	13	28	273
Make it more difficult for new entrants to rent land	56	12	32	272
Increase farmers' financial risk of negative equity if land prices fall	56	11	33	270
Expose farmers to higher debt levels	50	14	36	268
Give farmers greater control over business decisions	50	16	33	270
Lead to more investment in land/farms	43	24	33	269
Give farmers greater financial security	39	25	35	267

4.4 The majority of respondents agreed with statements concerned with the risks and difficulties associated with the introduction of an ARtB. For example, that introducing ARtB would:

• Discourage landowners from renting-out land (63%)
• Make it more difficult for new entrants to rent land (56%)
• Increase farmers' financial risk of negative equity if land prices fall (56%)
• Expose farmers to higher debt levels (50%)

4.5 Opinion was more divided over whether the introduction of ARtB would:

• Lead to more investment in land/farms (43% agreed and 24% disagreed)
• Give farmers greater financial security (39% agreed and 25% disagreed)

4.6 At least a quarter of respondents said that they were unsure or did not know about each of the statements on the implications of ARtB.

4.7 Unsurprisingly, respondents who said that no tenant farmers should be offered the ARtB had more negative opinions on its potential introduction. For example, 79% of this group agreed that introducing the ARtB would discourage landowners from renting out land (compared to 63% overall), while 44% disagreed that the introduction of ARtB would lead to more investment in land/farms (compared to 24% overall) (Table 4.2).

Table 4.2: Implications of ARtB among those who said that no tenant farmers should be offered 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/Don't know
	(%)	(%)	(%)	Base
Discourage landowners from renting-out land	79	6	14	121
Make it more difficult for new entrants to rent land	68	7	25	119
Expose farmers to higher debt levels	65	6	29	117
Increase farmers' financial risk of negative equity if land prices fall	63	11	27	117
Allow farmers to sell land to release assets	52	17	31	117
Make it easier to pass on land/farm through generations	45	27	28	117
Give farmers greater control over business decisions	38	28	34	117
Lead to more investment in land/farms	24	44	32	117
Give farmers greater financial security	23	45	33	116

4.8 In comparison, 73% of respondents who said that all or certain farmers should be offered ARtB agreed that the introduction of ARtB would make it easier to pass on land or farms through generations. Sixty seven per cent agreed that it would allow farmers to sell land to release assets and 65% agreed that it would give farmers greater control over business decisions (Table 4.3).

Table 4.3: Implications of ARtB among those who said that all or certain tenant farmers should be offered 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/Don't know
	(%)	(%)	(%)	Base
Discourage landowners from renting-out land	55	16	29	135
Make it more difficult for new entrants to rent land	51	17	32	135
Expose farmers to higher debt levels	43	21	35	134
Increase farmers' financial risk of negative equity if land prices fall	55	12	33	135
Allow farmers to sell land to release assets	67	6	27	136
Make it easier to pass on land/farm through generations	73	4	23	137
Give farmers greater control over business decisions	65	9	28	136
Lead to more investment in land/farms	62	11	27	134
Give farmers greater financial security	56	13	32	134