Tenant farmers urge longer FBTs amid 'no deal' prospect

Tenant farmers are calling for 'more realism' from landlords and their agents when making FBT agreements
Tenant farmers are calling for 'more realism' from landlords and their agents when making FBT agreements

Tenant farmers have called for a 'greater degree of realism' from landlords and their agents when approaching new Farm Business Tenancies (FBTs).

Statistics show the average length of term for new FBTs is now below four years, with 90 percent of all new FBTs let for 5 years or less.

The Tenant Farmers Association (TFA) said there was 'little scope' for tenants to invest or enter post-Brexit 'public goods' schemes.

And many tenancy agreements also precluded tenants from participating in such schemes without the consent of their landlords, the group added.

It comes as British farming readies itself for life after the Brexit transition period, having had over 40 years as part of the EU customs union and single market.

Farmers are also facing the prospect of trading under World Trade Organisation (WTO) rules as the prime minister said the UK should ready itself for a 'no-deal'.

At the same time, in England, the government will trigger the start of a transition away from current agricultural support schemes.

The TFA said the business environment within which agriculture operated was about to get 'a lot more challenging'.

Because of this, landlords and their agents should 'wake up' to these changes and make long-term agreements with tenant farmers.

“The modus operandi of a number of agents acting for landlords is to use short lengths of term and threats of remarketing, to offer FBT agreements on very restrictive terms at unsustainable levels of rent," TFA Chief Executive, George Dunn said.

"Landlords would be better placed to instruct their agents to make long-term agreements with tenants with more flexibility and at sensible levels of rent."

Such agreements would provide both a sustainable return to landlords and a good platform for the business success of the tenant, Mr Dunn added.

“A generation of landlords agents has been schooled by some of the leading, national firms of agents to use FBTs to exact the maximum amount of leverage for the short-term benefit of their clients.

"This seems to be a long way from the requirements of the Royal Charter of the RICS to ‘promote the usefulness of the profession for the public interest’," he said.

The TFA has called for landlords' agents to show 'greater concern' for issues impacting tenant farmers' long-term sustainability.