Landlords urged to use up-to-date costings for rent review

Tenant farmers’ representatives say some landlords are asking for unrealistic rent increases based on outdated business budgeting information, as Lady Day draws near on 25 March.

The NFU said it was “concerned” that some landlords were seeking high rent increases, but were making budgeting errors in their assessments of a farm’s productive capacity or potential earnings.

NFU deputy president Meurig Raymond said: “We would encourage members to carry out their own budget assessments ahead of negotiations for Lady Day rents.

“The key, if an agreement is not going to be reached by the term date, is to keep a note of farmgate prices and input costs so that, as negotations continue, you remember exactly how conditions were at the time the rent should have been agreed.”

The NFU’s chief surveyor Robert Sheasby said the most common examples of errors were unrealistic estimates of crop yields and outdated input and output prices. “For example, milk prices have moved by, in some cases, 2p/litre and more in recent months. Budgets prepared before Christmas for a Lady Day rent negotiation will be wrong now.”

Arbitrary figures for average crop yields were routinely being used without a relaistic assessment of soil type, inherent fertility or conditions, he added.

George Dunn of the Tenant Farmers’ Association said there was “no excuse” for landlords to use out-of-date information. “We’re in an age where up-to-date price information is available at the click of a button online.”

Some landlords were also seeking to apply residential values akin to Assured Shorthold Tenancies to farmhouses and cottages on agricultural tenancies, he added.