Section 12, rent review 2021.

[Mixedupfarmer]

Have you written to your LL to tell them there’s too much money coming in and you’re seeking a rent increase?

If landlords want to up their rent on what could be a short term spike in grain prices, ignoring all the increased costs and poor prices for beans, beet, etc, they should have it contract farmed or farm in hand, to have some risk associated with the perceived higher profitability, which some do. Of course many are content to cash the rent cheque and leave all the risk to the tenant. I appreciate that landlords with land let out on long tenancies may not immediately have this option, but there is nothing to stop them tendering for another farm on FBT if the job is so good.

 

[midlandslad]

Have you written to your LL to tell them there’s too much money coming in and you’re seeking a rent increase?

There are plenty of farmers out there that are bidding so high on FBT land that they are essentially doing this.

 

[holwellcourtfarm]

The warning signs are there:

Genuinely commercial landlords need a return on their asset. If they've been using the "we keep the BPS" approach then that return is about to fall. I'm sure agents will be working hard to address that for them.

Ultimately, if rents fall low enough, it could drive some to terminate tenancies and put it all into woodland for timber and/ or carbon credits.

Big changes coming.....

 

[Northernlights]

Costs are continuing to rise so why shouldn’t the rent, doesn’t the landowner deserve a fair return.

In a large number of cases land has been inherited perhaps for hunderds of years and was never bought(Won by the sword) at a true value and even if it was (Mostly to hide excessive amounts of capital made elsewhere from the tax man)those taking the biggest risk should get the biggest reward but today with bean counters everywhere and contracts for everything prices for our produce are never really allowed to find their true value in times of scarcity.That was the one relief in years like 75/76 from never ending rent increases.

Funnily enough heard a story the other day where high rents may be a case of shooting yourself in the foot by land agents .
In Scotland since end of February long term tenants can trade their tenancy at retirement to either their landlord or the open market.One of the criteria being the higher the rent being paid the more the tenancy is valued at. If true its quite ironic that land agents may end up costing their landowners more money to buy back tenantcies if they want to.

 

[B'o'B]

There are plenty of farmers out there that are bidding so high on FBT land that they are essentially doing this.

There are still a few of us who like to buy work, I guess it must be quite area specific as I’m not hearing the same story around here.

 

[neilo]

In the last few weeks I’ve heard of a couple of farms on this estate where the tenants are quitting, one of which must only be 8 years into a 21 yr FBT.

Already on (what I would consider) unsustainable rents, the new agent here has been busy cranking rents up on farms & houses since he arrived. Those two have chosen to walk, rather than pay close to £200/ac for beef & sheep units.

Crazy times.

 

[B'o'B]

In the last few weeks I’ve heard of a couple of farms on this estate where the tenants are quitting, one of which must only be 8 years into a 21 yr FBT.

Already on (what I would consider) unsustainable rents, the new agent here has been busy cranking rents up on farms & houses since he arrived. Those two have chosen to walk, rather than pay close to £200/ac for beef & sheep units.

Crazy times.

I can only see that there will a fair bit more of this in the next 5 years.
Very sad for those involved though.

 

[chipchap]

Agents rarely make much distinction between grade 1 arable and grade 3 stock ground.

One is almost worthless and the other can be worth £200, with good facilities provided.

 

[midlandslad]

Agents rarely make much distinction between grade 1 arable and grade 3 stock ground.

One is almost worthless and the other can be worth £200, with good facilities provided.

Whereas there are plenty of folk prepared to pay £200 for grade 3 and over £300 for grade 1 land.

 

[Courier]

The warning signs are there:

View attachment 979657

Genuinely commercial landlords need a return on their asset. If they've been using the "we keep the BPS" approach then that return is about to fall. I'm sure agents will be working hard to address that for them.

Ultimately, if rents fall low enough, it could drive some to terminate tenancies and put it all into woodland for timber and/ or carbon credits.

Big changes coming.....

I'm not personally interested in growing trees but I'm wondering if the planting and maintenance grants will provide an ongoing income until there is an economic harvest of timber ( Or will the Government be able to withdraw from the scheme halfway through as they did with FIT) and also how much the insurance premiums for fire will be affected for a farmstead which in 20 years time finds itself to be an island in an immature forest with a tinder dry scrub floor when the full effects of movement in the Jet Stream creates wildfire situations such as are being experienced across Europe at present ?
Will a burned down forest still attract carbon credits ?

 

[Mixedupfarmer]

Whereas there are plenty of folk prepared to pay £200 for grade 3 and over £300 for grade 1 land.

Not as a stand alone unit?

 

[le bon paysan]

In the last few weeks I’ve heard of a couple of farms on this estate where the tenants are quitting, one of which must only be 8 years into a 21 yr FBT.

Already on (what I would consider) unsustainable rents, the new agent here has been busy cranking rents up on farms & houses since he arrived. Those two have chosen to walk, rather than pay close to £200/ac for beef & sheep units.

Crazy times.

I pay 105,33 Euros a Hectare for the Arable ground I rent
Rent is reviewed and set Departmentally by the SAFER, based on commodity prices and earning capacity, annually.
Set in April , for the previous 12 months.

L’indice national des fermages s’établit à 105,33 pour 2020.
La variation de cet indice par rapport à l'année 2019 est de + 0,55 %

PRobably why there's loads of UK farmers out here trying to buy ATM.

 

[neilo]

I pay 105,33 Euros a Hectare for the Arable ground I rent
Rent is reviewed and set Departmentally by the SAFER, based on commodity prices and earning capacity, annually.
Set in April , for the previous 12 months.

L’indice national des fermages s’établit à 105,33 pour 2020.
La variation de cet indice par rapport à l'année 2019 est de + 0,55 %

PRobably why there's loads of UK farmers out here trying to buy ATM.

What sort of crops would that ground grow though? If it has half the yield potential then it’s much the same as rents here.

I fully expect you to make me feel bad by quoting 10t/ha wheat yields……

 

[Wombat]

Whereas there are plenty of folk prepared to pay £200 for grade 3 and over £300 for grade 1 land.

Good luck to those hero’s, a few mor winters like the last 2 will sort out the grade 3 for them

 

[midlandslad]

The problem is that once there are a few heroes paying £200 per acre that sets the benchmark for other FBT reviews in the area

 

[le bon paysan]

What sort of crops would that ground grow though? If it has half the yield potential then it’s much the same as rents here.

I fully expect you to make me feel bad by quoting 10t/ha wheat yields……

So it works out about £36 an acre rent ,with a sub of £82 an acre and it'll yield about 2 tonnes an acre of milling wheat . Or a tonne an acre of Sunflowers at £427
And 5 straw 5'x4' bales an acre which I put under the cows. Muck goes back onto the ground

 

[le bon paysan]

So it works out about £36 an acre rent ,with a sub of £82 an acre and it'll yield about 2 tonnes an acre of milling wheat . Or a tonne an acre of Sunflowers at £427
And 5 straw 5'x4' bales an acre which I put under the cows. Muck goes back onto the ground

Been thinking about the rents over there.
If you extrapolate my £36 an acre and 2 tonnes by 5 it gets you a rent of £180.
So are you boys getting 10 tonnes an acre?
And, our sub will continue for the time being and yours is diminishing , fast.
Mmm.

 

[Drillman]

Fbt should be down by the fall in bps
high price of grain is based on lower yields last year
higher Fert and machinery fuel and labour

fbt here down by the bps reduction

aha formula will reflect the lower bps higher costs

it is important than some tenants do not agree increases as these will be used as comparables by agents

The landlord cannot use a comparable without the tenants permission, Data protection has effectively put paid to that one it seems!

 

[Mixedupfarmer]

The landlord cannot use a comparable without the tenants permission, Data protection has effectively put paid to that one it seems!

Even if the comparable is on their estate?

 

[Drillman]

Even if the comparable is on their estate?

The tenant who Has already settled his rent doesnt have to say yes when the landlord asks if they can use the settlement figure as a comparable.

without the tenant agreeing to it the landlord is in breach of data protection it seems.

It certainly be a very interesting conversation/request and I have no idea how the landlord would approach such a thing! Especially if other tenants on the estate are friends and neighbours of the already settled tenant.

I personally would say no as wouldn’t want to get dragged into another tenants rent dispute with landlord or vice versa.

Edit- please don’t take the above as gospel, check it out with someone who is qualified in such matters.