BPS reduction = rent reduction

[Punch]

Have RPA or Government announced the BPS reduction rate over the whole period 2022-2027? I’ve got the 2021 reductions.
I’m really struggling with rent figures for rent review!
My gut says 12% reduction per year!
I think that works a £150/ac rent in 2020 to £54/ac in 2028!
Too much or too little?

 

[cotswoldcs]

I've only heard how much it's being reduced next year. Doesn't make negotiating or planning ahead very easy does it?

 

[Adeptandy]

There’s a chart on here somewhere showing the reductions/year

 

[teslacoils]

Fbt or aha?

 

[yellow belly]

There’s a chart on here somewhere showing the reductions/year

The chart is an agent guesstimate

 

[B'o'B]

Have RPA or Government announced the BPS reduction rate over the whole period 2022-2027? I’ve got the 2021 reductions.
I’m really struggling with rent figures for rent review!
My gut says 12% reduction per year!
I think that works a £150/ac rent in 2020 to £54/ac in 2028!
Too much or too little?

All we know is next years reductions and that it will be nothing in 2028. Nothing else has been announced.

 

[Formatted]

I think its safe to assume that by 2027 when BPS ends your BPS will be 0% of what it is today, so plan accordingly

 

[Goweresque]

I think there's supposed to be some sort of Defra announcement in September setting out a road map for the transition from BPS to ELMS, so if you can wait until then you may have a better idea of how things will pan out.

 

[Wooly]

Well good luck with getting your landlords to reduce the rent !!

Can't see that happening.

 

[Still Farming]

With sfp/bps reducing you'll have to pay rent not Government possibly?

 

[farmerm]

Whilst if on £40k you might see.....

2020​	40​
2021​	36​
2022​	36​
2023​	36​
2024​	36​
2025​	36​
2026​	36​
2027​	36​
2028​	0​

It is more likely to be something like this...

2020​	40​
2021​	36​
2022​	31​
2023​	26​
2024​	21​
2025​	16​
2026​	11​
2027​	6​
2028​	0​

 

[Brisel]

Well good luck with getting your landlords to reduce the rent !!

Can't see that happening.

Once the Agriculture Act 2020 gets Queen's Assent and becomes law then IMO it's time to start service rent review notices. We will have more certainty of the tapering off. Of course landlords won't want to reduce them. That's what negotiations are for.

I intend to propose a sliding scale of rent that reduces by half the reduction in BPS to share the pain. Not that I have any of these, but an AHA rent of below the current BPS rates won't have the same decrease rates.

The devil for many will be capping. A 100 acre FBT as part of a much larger holding will have a much higher cap than as part of a smaller holding and I don't see the landlords giving the bigger units much sympathy when they could let it to a smaller one less affected by the cap. It's only for a few years anyway so perhaps I'm overthinking this.

 

[deleted user 837354]

Landlords will be presented with a quandry, either reduce the rent or find a new tenant. How the hell rents ever got linked to what monies people were paid I will never know.

 

[Hindsight]

Landlords will be presented with a quandry, either reduce the rent or find a new tenant. How the hell rents ever got linked to what monies people were paid I will never know.

Because all subsidies are capitalised into the value of the asset that derives the subsidy. A Level economics.

 

[DRC]

This was put on here on another thread .

 

[An Gof]

Have RPA or Government announced the BPS reduction rate over the whole period 2022-2027? I’ve got the 2021 reductions.
I’m really struggling with rent figures for rent review!
My gut says 12% reduction per year!
I think that works a £150/ac rent in 2020 to £54/ac in 2028!
Too much or too little?

Good luck with that

 

[farmerm]

This was put on here on another thread .

Put it another way... a 150ha farm will need to do the equivalent of sacking a full time member of staff! To play devils advocate, I don't see why tenants should have their BPS income loss offset by reduced rents, those of us owner occupiers will not be so cushioned

 

[DRC]

Put it another way... a 150ha farm will need to do the equivalent of sacking a full time member of staff! To play devils advocate, I don't see why tenants should have their BPS income loss offset by reduced rents, those of us owner occupiers will not be so cushioned

We are 160 ha, but can’t afford a member of staff.
I’ll swap you the rent we pay every 6 months for a paid for owner occupied farm if you like

 

[bobk]

We are 160 ha, but can’t afford a member of staff.
I’ll swap you the rent we pay every 6 months for a paid for owner occupied farm if you like

Was thinking about your scenario t'other day , I'd be happy to rent if it's as good a ground as yours .
Remember also , you spend your life paying for a farm then you have to get rid of it without the govt dipping it's fingers in .

 

[Brisel]

Was thinking about your scenario t'other day , I'd be happy to rent if it's as good a ground as yours .
Remember also , you spend your life paying for a farm then you have to get rid of it without the govt dipping it's fingers in .

I can think of bigger problems than that