THE average length of new farmland lettings in England and Wales in 2016 increased on previous years, according to the Central Association of Agricultural Valuers (CAAV).

At 4.48 years, the average let – covering everything from seasonal grazing to full farms – was nine months longer than the nine-year average and eight months more than in 2015.

In England and Wales, letting of fully equipped farms averaged 14 years, with units over 200 acres averaging nine years against 2.54 years for less than 25 acres.

About 60 per cent of lettings were bare land, with 20 per cent comprising land and buildings and another 20 per cent including a farmhouse, land and buildings.

When let land fell vacant it was overwhelmingly re-let – 86 per cent of 1986 Act lettings and 94 per cent of Farm Business Tenancies.

Jeremy Moody, secretary and adviser to the CAAV, told its annual meeting that a vibrant tenanted sector was key to helping farm businesses adapt to changing demands ahead of and after Brexit.

He said: “If tenancies are discouraged or made less flexible, then the likely structural changes in farming for economic reasons, and in adaptation to a post-Brexit world, will use business contracts instead.

“As is now happening in Scotland, that would bypass the let sector with its opportunities for combining flexibility with assurance and the framework it offers for investment and land management.”

The introduction of FBTs in England and Wales in 1995 triggered growth in the total tenanted area, in sharp contrast to the continued implosion of the sector in Scotland, with its complex and changing legislation, said Mr Moody.

However, the introduction of area-based subsidy payments had subdued overall activity in England and Wales, with only 892 units seeing change compared to 2,565 in 2002.

“The fraction of new lettings that were taken by new entrants fell to 14 per cent of those units that were let to a new occupier, rather than a new letting to the same farmer,” said Mr Moody.

“That compares to 25-30 per cent in previous years. Significantly, the level of lettings to new entrants in Scotland was zero.”

Sixty eight per cent of lettings in Scotland were now of bare land. “The Scottish tenanted sector has nearly halved since the early 1990s,” said Mr Moody.

“The key to increasing the number of new lettings is what will encourage a private landowner to see letting land as a practical and useful option.

“The more opportunities there are, the more open the market is to new entrants. It is encouraging to see that the average term is increasing, providing greater certainty for businesses trying to plan ahead through challenging times.

“However, more needs to be done and that falls to the Government in its design of agricultural and tax policies in the years ahead.”