The Tenant Farmers Association has said that farm tenants are very much in the driving seat when it comes to this autumn’s rent reviews.
Having seen a large number of farm rent standstills between 2014 and 2015, particularly on traditional tenancies let under the Agricultural Holdings Act 1986, there is now evidence of rents beginning to fall.
TFA Chief Executive George Dunn said “We are receiving reports from throughout England and Wales that tenants are being able to agree rent reductions with their landlords. At the moment it is more of a trickle than of a flood but it marks an important turning point in the rent review market”.
“Typically the reductions which we are seeing are around 10% of passing rents which were properly reviewed three or four years ago,” said Mr Dunn.
Often, these rent reductions have been achieved on the basis of notices served by landlords triggering this year’s reviews. But time is running out for tenants to take action before these notices expire.
“Traditionally most autumn rent reviews take place on 29 September following a notice served at least 12 months previously. Unless a new rent is agreed or an arbitrator is appointed by this date, then the opportunity of a rent review will be lost. Tenants with live notices should take urgent advice about what to do. Of course some tenants will have later review dates depending on the terms of their tenancy agreements,” said Mr Dunn.
“It is also important that tenants consider whether it is right to be serving notice to trigger the possibility of a rent review in 2016. Again, this will have to be made urgently as the opportunity will be lost for a year after the rent review anniversary”, said Mr Dunn.
“It is also pleasing to see some sense entering the tender market for Farm Business Tenancies. In a recent marketing of 300 acres of bare arable land in the East of the country reported to the TFA, six tenders were submitted at an average rent of £125 per acre and the highest rent offered was £140 per acre. This is a far cry from the ridiculously high levels that have been tendered in recent years and marks a significant change for the better. Such evidence can be used in FBT rent reviews to argue for reductions,” said Mr Dunn.
