Long-term lets find favour with landowners
LONG-TERM lets under FBTs have become more common as the big landowners – the Crown, National Trust and traditional estates – show their support for the new legislation.
A few other lower-profile, long-term landowners are doing the same. Those, perhaps, who enjoy a "family feel" to their estate and want to perpetuate this.
For Lapthorne Farm, Dittisham, Devon, the new arrangement marks the first change of tenancy for four generations.
From 40 applicants, agents Michelmore Hughes received 15 tenders averaging £63/acre, ranging from £51 to £78, for the traditional 236-acre stock/arable holding.
At 33, the incoming tenant is "a shrewd, hard-working young man". He was chosen from a shortlist of four for his sound business acumen. That he and his wife have family connections in the area was a bonus.
Lapthorne takes him from a small charity smallholding, via a county council holding, up the ladder to a term tenancy that is his until he reaches the age of 60, with an initial five-year break clause followed by breaks at each rent review.
The farmhouse will be modernised by the landlady, and repairing obligations are similar to statutory 1986 Agricultural Holdings Act clauses.
Not all long-term tenancies beg lower rents than the £100/acre plus that is commonplace for shorter lets. Gloucester County Council has let several farms for 15 years.
"It is part of our estate plan, to categorise farms according to their size and function," said county property manager, Charles Coats.
"We want people to move on, off our estate. Even with the new legislation, the opportunities to do so are few." Starter farms go for five years, intermediate units of 60-70 acres for 10 years, and full-time "promotional" holdings for 15 years.
All 10 to 15-year agreements have five-year break clauses. "But the onus is on us as landlords to show why a tenancy should not continue."
A 68-acre dairy holding has just been let for 15 years on the understanding that it will double in size through amalgamation within a few years.
Although dismissing unsustainably high offers, Mr Coats indicated that relevant offers invariably breach three figures an acre, even in the longer term.
"We are dealing at the lower end of the market in terms of farm size, with house and buildings, so talking in terms of £ an acre is misleading."
lExamples of FBTs:
Glan-y-Wern, Llanfrothen, Gwynedd: 100-acre mixed livestock holding, house and buildings, 25 years. Eighteen tenders, ranging from £5300 to £10,200 per annum. Successful applicant aged 28, son of a local farming family. Rent undisclosed but not the highest. Will be fixed for six years, landlords to aid initial improvements. Break clauses 10, 15, 20 years (Balfour & Cooke with Lane Fox).
Lubcloud Farm, Oaks-in-Charnwood, Leics: 258-acre dairy farm, five-bed farmhouse, up to 400,000 litres milk quota. Landlords policy is to relet estate farms as they come available, for conversion to organic production (three farms already complying). Down to final selection from three or four applicants; about a dozen viewed, most with organic experience. Rent and term to be determined on selection, based on suitability and business plan (Mather James).n
Savills FBT database, last updated in the spring, shows:
• Average term of 4.8 years for arable farms at £91/acre. Typically 207 acres.
• For stock farms, average is 3.4 years at £65/acre. Typically 87 acres.
• Bare land accounts for 40.6% of the agreements.
• Four-fifths of the new FBTs granted in the year to March 1997 followed previous FBTs. The remainder came after other tenancies under the 1986 Act over 43% of which were Gladstone v Bowers. None followed in-hand farming.