TFA warns of landlords imposing unjustified rent hikes
© Adobe Stock Attempts by some landlords to push through major rent increases this autumn are unjustified and out of touch with the market, says the Tenant Farmers Association (TFA).
The organisation has been made aware of a substantial number of rent renewals taking place throughout the autumn, with some land agents trying to increase rents by up to 50%.
However, the TFA has made it clear that farming incomes have generally been constrained during the past year and tenants are in no position to start paying more.
See also: New landlord-tenant code of practice – what’s changed?
Caroline Squire, rural surveyor at the TFA, told Farmers Weekly that it had been the busiest period for rent reviews for several years and the common theme was landlords seeking increases.
However, Ms Squire believes higher rents aren’t necessarily justified.
Defra’s 2023-24 forecast for farm business incomes in England showed lower incomes for most farm types, with cereals down by 77% on the year.
General cropping, dairy, and mixed holdings all had significantly reduced incomes, while returns for grazing livestock enterprises remained relatively stable.
Ms Squire said: “They [land agents] are putting forward proposals and they may as well have just plucked the figures from thin air as far as we know, because they aren’t substantiating them at all.
“When pressed for evidence to justify the figure, often they are putting forward very unrealistic budgets in terms of prices and costs.”
Pressure
The TFA has also reported offers being made by landlords just a few days prior to the rent review date, putting undue pressure on tenants to agree.
This is despite the Agricultural Landlord and Tenant Code of Practice for England stating that “discussions and negotiations about rent reviews should start in good time”.
Ms Squire added: “What we are seeing is landlords being in touch a day or two before the rent review deadline and then almost using the fact [tenants] will have to apply for the appointment of an arbitrator as a threat to back the tenant into a corner and scare them into just agreeing into whatever they want.”
Rent reviews in many instances have ended up at arbitration.
The TFA added that tenants should remember that a simplified arbitration scheme is available through the Royal Institution of Chartered Surveyors (RICS), which caps costs.
Tenant farming commissioner
The farming industry is still waiting to hear whether government will introduce a tenant farming commissioner to look at poor practices in the tenanted sector, following recommendations in the Rock Review in 2023.
It was stated in the Rock Review that a commissioner would work to “ensure fairness” within the tenanted sector and would “examine and strengthen dispute resolution processes”.
On 8 October, Defra secretary Steve Reed said in the House of Commons that he had recently met with the TFA to hear its views about improving support for tenant farmers.
He said: “I agree that the proposal for a tenant farming commissioner has merit, and we will make an announcement shortly.”
Ms Squire suggested that if a tenant farming commissioner was in place, they would be able to call out and critique any bad practice, which might encourage an approach where both sides work together rather than against each other.
Success in Scotland
The Scottish Land Commission released a report on 9 October detailing the impact of its tenant farming commissioner had made on landlord and tenant relations.
It found that the role of the commissioner and guidance produced was having a positive impact on the Scottish farming sector, and its guidance was useful for both landlords and tenants.
Scotland’s tenant farming commissioner, Bob McIntosh, said: “This review shows real progress – Scotland’s agricultural sector is embracing meaningful change.
“The shift towards more collaborative, less confrontational relationships between landlords and tenants marks a major turning point. While there is still work to be done, this is a significant step towards a fairer and more sustainable future for the industry.”