Caution over farm rent increases

Posted by LindaStenner on August 20, 2018

Caution over farm rent increases

August 20, 2018 at 10:34 AM

The prolonged cold, wet start to the year impacted across all farming sectors and with the dry summer weather dashing hopes of a bumper harvest, margins are likely to be squeezed this year for most farmers in England and Wales.

This could make things particularly difficult for the tenant farming sector and land agents at Davis Meade Property Consultants are hoping landlords will resist asking for rent increases this Autumn.

Michaelmas day (September 29) is the traditional day for issuing rent notices but with farmers facing challenging times and Brexit negotiations putting a damper on confidence, a rent notice dropping through the letter box won’t be welcome.

 “Farmers have been struggling to cope with the extreme weather so an increase in rent will have a much greater impact than usual, particularly as we are facing an unknown  domestic agricultural policy outside the EU,” said Kathryn Williams, land agent based at the Oswestry office of Davis Meade Property Consultants.

If as a tenant you receive a rent review notice, she said the key is not to panic: “There have been many cases over the last three years where rents have stayed the same following a rent review notice being served, as landlords have accepted it is not the time to increase rents but have served the notice to protect their position.

“There have even been instances too where tenants have been able to turn the rent review into a rent reduction,” she said.

Parties will have at least a year to agree a rent after a rent review notice is served and it is dependent on the type of tenancy and the terms of that tenancy on how the rent is to be calculated.

“However, each review is case specific and so the key message at all times to tenant farmers, is to seek advice from their agent or a tenancy specialist before accepting a rent increase,” she advised.

There is also concern that Farm Business Tenancies (FBTs) are getting shorter. Figures from the CAAV (Central Association of Agricultural Valuers) report that the average length of all FBTs has decreased from 4.5 years in 2016 to less than four years in 2017. 

Excluding lettings of less than a year, the average tenancy length has fallen from six years to below five years.  Worryingly, fully equipped holdings, which would be expected to be let for longer terms, have seen a reduction from over 14 years on average to below 10 years. Some  85 per cent of farm tenancies let in 2017 had terms of five years or under.

“Farmers need to be able to plan ahead and short term tenancies don’t offer the security for tenants to invest long term for a sustainable future,” she added.

Kathryn Williams can be contacted at the Oswestry Office of Davis Meade Property Consultants and on 01691 659658, email

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