High volume of Autumn rent review activity

The Tenant Farmers Association has been inundated with calls from its members who are in active negotiations with their landlords to settle autumn rent reviews.

Although farm rent reviews can take place at any time, traditionally autumn (Michaelmas) and spring (Lady Day) are the most common periods for rent reviews. Notices for rent review have to be served a year in advance.

TFA Chief Executive George Dunn said "With the traditional pattern of autumn and spring rent reviews we are always busy advising members on rent at this time of year. However, in 2010 we saw an exceptionally large number of landlords’ rent review notices served on the back of better commodity prices. All those notices are now coming to fruition and landlords and tenants are attempting to reach agreements rather than proceed to arbitration which is the backstop if no agreement can be reached."

’As always we have had to deal with a certain amount of chicanery from some landlords’ agents including waiting until the last minute to make their proposals, producing overoptimistic budgets, over egging the importance of the farmhouse and threatening arbitration. In some cases we have seen landlords agents slash their initial rent proposals by half in a matter of days when confronted by tenants fighting back with the benefit of advice provided by the TFA and their agents. Inevitably we will see a number of these more difficult cases proceeding to arbitration hopefully with the benefit of the TFA’s arbitration insurance," said Mr Dunn.

"However it is pleasing to see that are some very sensible deals being done. Reports from TFA members to our rent databank suggest average arable rents on traditional tenancies let under the Agricultural Holdings Act settling at between ’76 and ’80 per acre with livestock farms around the ’50 to ’60 per acre mark. Rents on newer Farm Business Tenancies are higher with average arable rents at review between ’105 and ’110 per acre and around ’85 per acre on livestock holdings" said Mr Dunn.

"Tender rents for Farm Business Tenancies, particularly on arable land, are currently at shockingly unsustainable levels. The TFA is aware of accepted bids in and around the ’200 per acre mark and above. With an average margin before rent and finance, even at current prices, of around ’250 per acre including the single payment I simply do not see how these rents can be sustainable. Small movements in prices, costs or yields will quickly place these enterprises into the red’ said Mr Dunn.