Thousands of farmers on rent hike collision course
Thousands of farmers are fighting demands for huge rent price hikes across Britain, Farmers Weekly has learned.
Tenant Farmers Association chief executive George Dunn said there had been a huge rise in the number of reviews left unresolved as landlords sought to achieve significant increases in the rents they receive.
“Reviews that should have been agreed by September 2012 are still locked in debate,” said Mr Dunn, adding that rent demands of 50% were “not uncommon”.
“Normally, at this stage we would expect to see a maximum of 100 cases still to reach agreement from the September [2012] review. This year we have several thousand cases that remain unresolved.”
He said that arbitrators, who are called on when negotiations between landlords and tenants cannot not be agreed, were facing an unprecedented number of requests for help.
“Land agents are pressing for rises based on profitability levels seen in 2011. But the devastating impact of 2012’s record drought, followed by the wettest summer and autumn for a century, means tenant farms simply don’t have the income to meet the rises.”
Mr Dunn said that an average-sized arable unit on a traditional tenancy had been paying £60/acre. Now though rents of £90-100/acre are being demanded.
The cost of tenders for Farm Business Tenancies had also soared, he said. “Brand new lettings are facing overbidding. For a standard arable unit of a few hundred acres, demands are being seen in excess of £200/acre.” he said.
Chairman of the Scottish Tenant Farmers Association Angus McCall said farmers had faced similar demands for rent rises north of the border.
“Income figures for Scotland show a 15% fall for 2012 but demands of 50% for rent are common,” he said.
“We are pressing the Scottish Government for a moratorium on rent rises just so that farmers can recover from 2012 – which was an appalling year.”
In Scotland unresolved cases have to go straight to The Scottish Land Court which Mr McCall said was a “costly and cumbersome process for farmers”.
“A six-day trial will cost £40,000-60,000 so farmers are being deterred from challenging proposed reviews,” he said.
But Country Land and Business Association president Harry Cotterell insisted that rent rises were proportional and it was wrong to assess a rise based on one year alone.
“Landlords like to have a good, long-term relationship with their tenants and support them,” he said.
“Rents must be reviewed on a long-term basis, and we need to bear in mind that the rents being set now are for 2013 and beyond and not for 2011 or 2012 when there were enormous fluctuations in farm productivity levels.”
Jason Beedell, head of research for property managers Smiths Gore, said that price hikes were linked to the rising value of land.
“It is important to remember that competition for land is high,” added Dr Beedell. He quoted one bid for a Farm Business Tenancy of £280/acre.
“Traditional tenancies are being compared with bids for FBTs and landowners are pushing up estimated rent values,” he said.
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