Challenging 190-acre tenancy offer: What farmers should know

Land at Hatfield

Land at Hatfield © Carter Jonas

Tenancy opportunities in the UK are notoriously limited, exceedingly competitive, short-term and expensive.

Landlords generally have plenty of applicants to choose from, with such high demand playing a huge part in increasing rental values.

This can result in landowners failing to invest in improving their own holdings and farmers taking on agreements for poor land or dilapidated units, just to get a foot in the door.

See also: How farmers can sell small blocks of land for a big return

One such option is currently available in Hatfield, Hertfordshire, through Carter Jonas.

Available at just £10/acre on a five-year farm business tenancy (FBT) – potentially to be offered for longer – the 190-acre block of pasture looks incredibly enticing at first glance.

However, the prospect is not straightforward and firm partner Chris Turner says in instances such as this, applicants must first be fully aware of what they are taking on and be realistic about the opportunity.

Limited options

“This is a single block of grazing pasture to rent at a fraction of the cost of other grassland in the area, which might attract £50-£80/acre,” says Mr Turner.

“The reason for the low rental value is that it is a former quarry and landfill site, so the land is not great quality and options for improvement are limited.

“Although livestock has grazed the ground, the fences are poorly maintained and will need the tenant to address them, and there is no electricity or water to the site.”

The land has also been subject to unauthorised public access, which a tenant looking to graze livestock would need to consider carefully.

Despite its challenges, this is still a good opportunity for the right applicant, and the landlord is particularly keen to offer it to a new entrant or young farmer, says Mr Turner.

“In situations like this, tenants need to fully understand both the effects and the opportunities,” he says.

“If – like this block – the land isn’t registered for the Basic Payment Scheme, the tenant could look at buying entitlements. In this instance, that would generate about £75/acre, with entitlements currently £40/acre to buy.”

Electric fencing could help create field boundaries and the tenant could ask the landlord to help improve water and electricity provisions.

The land is available on a five-year FBT, with a break clause after two years. It may in future be offered as public access for the local population to support a housing development application.

The TFA says…

George Dunn, Tenant Farmers Association chief executive, says potential applicants should look at this opportunity with their heads, rather than their hearts.

“This holding will need a significant amount of investment early on and there will be a serious amount of work to do to bring it into good agricultural condition,” he says.

“In that vein, it is disappointing to see the landlord wanting a break clause at two years and they should be approached about removing this.

“Even at five years, the overall return will be marginal given the investment required. Although the landlord may be suggesting a longer term is possible, applicants should be aware this is not guaranteed.”

Opportunity for the future

Applicants should think about what would appeal to the landlord and how they might be able to offer something another farmer wouldn’t, says Mr Turner.

“If they get on well and deliver against what they promised, a short agreement can often lead to something much more long term,” he says.

“It may not seem as if a piece of land like the block at Hatfield offers a huge amount, but if a tenant can see future opportunities, such as entering Environmental Land Management or another environmental scheme, the agreement might become a long-standing partnership.”

Applicants should showcase their passion for farming, set out a basic business plan that details how they envisage managing the land and their finances, and provide a reference.

The landlord is looking for a tenant who can be an ambassador for British farming and represent the industry well during a time of change within agriculture, says Mr Turner.

A positive attitude towards sustainability and public education will be viewed favourably.

Tenders must be submitted by 5pm on Monday 29 March, with occupation to begin mid-April.

For more information, contact Carter Jonas by emailing Georgina.Lorenzen@carterjonas.co.uk or calling 07875 368 392.

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