giving up a AhA tenancy

Thick Farmer · Oct 26, 2013

What sort of dairy setup have you got? With that size of farm and considering your location, there is scope to expand the dairy unit and get a cowman to do all the work. Around here it's only the dairy guys that are splashing the cash!

If you want to go the other way, then plough the lot up and spend a frantic few weeks of the year seeding and harvesting and the rest of the year shooting and fishing (I'm told that this is what the arable guys do).

le bon paysan · Oct 26, 2013

Walterp said:
If the farm is worth over £2 million, I'd want a third to relinquish the tenancy.

Nothing else makes much sense, in these circumstances.

What you want and what you get are 2 different things. There is a formula for the per acre amount. You can get a variation if, for example, it has a good house etc. Especially if splitting it up leads too yuppy potential.

B'o'B · Oct 27, 2013

Have a word with the Tenant Farmers Association. http://www.tfa.org.uk

B&B Pig Man · Oct 27, 2013

newholland driver said:
yeah just us two on the farm no ground around us is quite hard to get hold of never had anything to do with pigs what sort of money can you get for b&b pigs

Have a read through this.......

http://thefarmingforum.co.uk/index.php?threads/the-big-pig-project-diary.4435/

Anything else you need to know just give me a shout.

franklin · Oct 27, 2013

Thing is, if you or next generation actually don't want to do it, just take the dosh. Might get towards a million quid. You are on AHA so the landlord isn't going to get a massive rent hike in any case. Might look like it in %, but 25% of sod all is not very much.

DRC · Oct 27, 2013

Something I've been mulling over too.
I don't think the farms big enough to support me and the next generation without off farm income. So this causes problems with proving the successor has earned their main income from the farm for the previous 7 yrs.
You have to think what would happen to spouse if you died and they weren't eligible to succeed.
A neighbour died in his early 50s on our estate,and the ruthless agents already want the wife out.
Timing is the problem. Too old and they will just sit it out. Quit too young and you need an income from somewhere.
Farmers tend too think they will go on forever without much thought for their nearest and dearest.

CORNFLAKE · Oct 27, 2013

What about having it contract farmed if it can be converted to arable. Maybe 3 or 5 yr agreement or a stubble to stubble with a contractor, that way you continue to be the farmer but would be free to explore other options. Selling the dairy herd would release capital to invest in houses for each of you maybe. I know plenty of friends who would love the opportunity that you have so don't give it away too quickly. It sounds like a good farm.

Nearly · Oct 27, 2013

If you happen to bump into the landlord, make sure you are accompanied by a young lady with a pillow shoved up her shirt, even if you're single! It will focus the landlords mind that he won't get a hold of it for another generation.

Will Blackburn · Oct 27, 2013

If you don't get a good offer get someone to contract farm it, because there is likely to be a living made one way or another, and use the house as a part time residence if you need to live elsewhere.

bobk · Oct 27, 2013

Depends if there's a sub letting clause in the contract .
I'd speak to an agent to act as an intermediary ,maybe to see what the landlord has in mind, under the guise of discussing rent issues .
And possibly the tenant could be persuaded to go with adequate compensation .
I'd be asking over a mill initially ,although I don't know your area .
One round here 370 acres nice set up for dairy is down to the last 4 candidates at over 4 million and the seller is choosing the winner not by virtue of the bid but if he approves

Walterp · Oct 27, 2013

A true story from the other side of the fence:

"Me and my family saw the advert for this run-down 400 acre mixed farm down in the Vale of Glamorgan, and I could see right away that it was a bargain - it was tenanted by some old twit and his idiot son, neither of whom could farm their way out of a paper bag. Ripe for the pickin', it was.

So I bought the place dirt cheap, didn't I? Me and my boys were rubbing our hands at the prospect of making a killing - we'd reckoned it'd take about a year or so to get the old boy and the kid outta the place, and we'd whack it back on the market and double our money.

How'd it go? Well, we did make money on the deal, but not like we expected - we couldn't agree a sum with the old boy, 'cos I thought I'd threaten him with the old dilapidations argument instead of making him a decent offer to fudge off; trouble was, when he could see we weren't keen on paying him enough, he and his son actually got off their arses and started farming the place instead. So that was us fudged, then - thirty years later, the youngster is now farming the place, with a fine pedigree herd and some of the best crops in the area.

He even persuaded us to agree to sell off the old house to that famous historian guy, Niall Ferguson, who reckoned he liked the sea views, in exchange for a new dairy unit.

'Course, the freehold is worth a lot more now, but I wished I'd paid 'em the money to fudge off, years back..."

yellow belly · Oct 27, 2013

if you don't want to farm it then it would pay you £100 an acre plus with a contractor farming it after agents fees
sub letting clauses are no problem to a good contract farming agreement

at an income of 40000 a year that is would need £800000 less any working capital you provide

free hold worth 3 million or more with aha no more than 2 million if you give it up the gain for the owner could be up to 2 million

do not give it up without taking some proper professional advice would be the biggest mistake of your life in financial terms

DRC · Oct 27, 2013

yellow belly said:
if you don't want to farm it then it would pay you £100 an acre plus with a contractor farming it after agents fees
sub letting clauses are no problem to a good contract farming agreement

at an income of 40000 a year that is would need £800000 less any working capital you provide

free hold worth 3 million or more with aha no more than 2 million if you give it up the gain for the owner could be up to 2 million

do not give it up without taking some proper professional advice would be the biggest mistake of your life in financial terms

That's my point about timing. Once your into your seventies i doubt any landlord would want to do a deal,just wait for the inevitable.
Where as in your fifties you may have the chance to get a pension pot.
As an aside, to the young men who think it would be a great opportunity to farm 300 odd acres. What would you do in the way of stock or crops to afford a big rent without SFP on that sized farm, as if it came up it would be on those terms.
Farming on an AHA tenancy isn't all roses,as you can make a living, but often have little funds left to either buy your own house or pension.
This is often covered up by the perception,as you live in a nice house etc, but don't own any of it.

Walterp · Oct 27, 2013

silverfox said:
That's my point about timing. Once your into your seventies i doubt any landlord would want to do a deal,just wait for the inevitable.
Where as in your fifties you may have the chance to get a pension pot.
As an aside, to the young men who think it would be a great opportunity to farm 300 odd acres. What would you do in the way of stock or crops to afford a big rent without SFP on that sized farm, as if it came up it would be on those terms.
Farming on an AHA tenancy isn't all roses,as you can make a living, but often have little funds left to either buy your own house or pension.
This is often covered up by the perception,as you live in a nice house etc, but don't own any of it.

Fair observation, but it's also fair to add that the most progressive tenanting farmers try as hard as they can to buy some land or a small farm, so that (once the mortgage is paid off) they own some place and rent some more; given long enough, this can be a great way of doing the best you can. Many dairy farmers do it, and it has been one of the factors behind rapid expansion of estate dairy operations.

DRC · Oct 27, 2013

Yes,I have managed to buy,and pay for, 75 acres to add to the 330 i rent on an AHA.
Just wondering what i could afford to buy if i sold the owned land,and got a good payout on the tenancy?

bobk · Oct 27, 2013

silverfox said:
Yes,I have managed to buy,and pay for, 75 acres to add to the 330 i rent on an AHA.
Just wondering what i could afford to buy if i sold the owned land,and got a good payout on the tenancy?

Build yourself a house on the 75 acres and see where that takes you

Blue. · Oct 27, 2013

newholland driver said:
At the moment weve got dairy herd of 140cows plus a small amount of arable then contract farm another 150 acres on short term agreements dad still milks but cant see enough money in the cows to take on a cowman I'm not at all keen on milking and worried 370 acres is not enough to get a living off as an arable unit.
no the landlord only bought the property a while back with us as tenants so would not want to sell it be wants a big rent increase

Why don't you get a robot? That's what most folk who don't want to milk do.

newholland driver · Oct 27, 2013

Hi thanks for everybodys responses some very good points and needs a lot of thinking about im only 40 with a 1 year old son so landlord can see it could be in our hands for a long time yet. I'd like keep it in a perfect world for me then if he wants it my son but if I could get a pay out of nearly a million it really makes you think that could be a good start on a mortgage on another place or to invest in something different it would take along time if ever to get that sort of profit out of the farm.
increasing the dairy unit is not really possible without major investment which we cant afford and landlords wont do all designed for 150 cows.

Walterp · Oct 27, 2013

silverfox said:
Yes,I have managed to buy,and pay for, 75 acres to add to the 330 i rent on an AHA.
Just wondering what i could afford to buy if i sold the owned land,and got a good payout on the tenancy?

Better off buying some more land, now you've paid for the 75 acres?

The alternative isn't really viable: people like me and Julie, and other Welsh couples who've looked at moving, are accustomed to considering run-down places, remote places, hill places, even French or Scottish places, but I'd reckon that once I'd farmed in Shropshire - possibly the best farming area in the country, perhaps the World - it'd take a very persuasive offering to move. And they are not about.

It'd be Shropshire or, if I was adventurous, France.

multi power · Oct 27, 2013

@Walterp do you realy think shropshire is better than pembrokeshire?
we nearly bought a farm near ellsmere before moving to carmarthen, but my choice would have been pembrokeshire any day

giving up a AhA tenancy

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100% I’ve had enough of farming!

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