Rent price hikes threaten tenancy investments

NFU president Peter Kendall has called on landlords and tenant farmers to tackle spiralling rent prices.

“We’ve seen the rental market spiralling upwards during the past few years. While I firmly believe in market forces, I am calling on landlords and tenants to think hard about the long-term sustainability of these agreements,” Mr Kendall told the NFU Tenants’ Conference in Yorkshire on Thursday 7 November.

He acknowledged that tenancy negotiations needed to operate in a free market. “It is right this should be a competitive industry and it is also right that agents get a good deal for their clients.”

But he warned: “The rapid growth in rent levels is making it increasingly difficult for tenants to cover their costs, or even access new land.”

Mr Kendall added that with CAP reform proposals about to be implemented, a functioning rental market that created profitable outcomes for all parties was vital for the whole farming industry.

“The government’s ambition to increase food production means all farm businesses should be investing in the productivity of their farms, and we need the tenanted sector to be able to plan investments for the longer term,” he said.

“I’d also like landlords to think about longer leases. The average Farm Business Tenancy agreement period of four years offers little incentive for tenant initiative or investment.

“When the tenant can invest and grow their business both the landlord and the tenant profit – surely that’s the win-win we all want to see?”

See more