by Kathryn Williams of davis Meade Property Consultants
WItH Brexit looming and no clear path to a deal being agreed, farmers should be cautious about accepting any rent increases this spring.
tenant farmers are advised to seek advice if they received a rent notice last year and negotiate with their landlord rather than let things go to arbitration.
Both parties have a year from receiving a rent notice to either agree a rent or refer the matter to an arbitrator. If they do nothing the rent will stay where it is.
any rent review must take into consideration the effects of Brexit on farm incomes and at present we don’t know how things will pan out.
Land prices have already steadied due to Brexit and we believe there will be a similar effect on rental values in the future. If Brexit goes through without a deal then there might be a further devaluation in land values.
there seems to be greater uncertainty now than six month ago, but it is hoped that the transition period will give farmers the chance to reorganise their farms to the best economic advantage.
Rents are usually agreed with an eye on the future and if Brexit causes inputs to rise or farm outputs to fall, then this should be reflected in any rent settlement.
If as a tenant you do receive a rent review notice, don’t panic. there have been many cases over the last three years where rents have stayed the same following a rent review notice being served, as landlords have accepted it is not the time to increase rents but have served the notice to protect their position.
there have even been instances too where tenants have been able to turn the rent review into a rent reduction.
Parties will have at least a year to agree a rent after a rent review notice is served and it is dependent on the type of tenancy and the terms of that tenancy on how the rent is to be calculated.
each review is case specific and so the key message at all times to tenant farmers is to seek advice from their agent or a tenancy specialist.
Once Brexit is finally settled we suspect that there will be a huge pent-up demand for rent reviews as it has been years since there has been a ‘standard’ rent review year.
Some estates haven’t reviewed their rents for six or seven years so when we eventually do sort it all out there is going to be a massive rush for rent reviews.
Kathryn Williams can be contacted at the Oswestry Office of Davis Meade Property Consultants and on 01691 659658, email: email@example.com