Tenants becoming more discerning over land to let

PROPERTY MATTERS

by Kathryn Williams, chartered surveyor at Davis Meade
Property Consultants

WITH farm rents across most sectors remaining static and land prices starting to slide, the market for let land is not as strong as it was and supply is limited. Tenants are also becoming more wary as to where the land is and who the landlord will be, to the extent that a good, well managed estate will attract more tenders and often from those more likely to be better tenants. The supply of tenanted land, however, is still weak as many landlords with land available are looking at other options such as share farming. Tax is still a big issue. Many landowners are looking for the tax advantages of ‘farming’ so traditional tenancies are not always the first option. Also, the high milk price seen up until a year ago was encouraging landowners to become vicarious dairy farmers with existing milk producers to try and benefit from lucrative milk contracts. Fewer tenants, particularly in the dairy sector, are looking for land so price for short lets has certainly dropped. Tax will continue to affect the supply on Farm Business Tenancies going forward and we believe that many agreements are far too short. The Tenant Farmers Association’s campaign for 10‐year tenancies is founded on good principles as tenants need longer term security to borrow and invest in the farm. There are some regional differences in the let land sector with traditional dairy counties like Cheshire still making good money, but even these areas are being affected by the pressure on farm incomes. There is also less demand for acres from nonagricultural ventures such as bio digesters as feed‐in tariffs have dropped. But this sector can still afford to outbid farmers with traditional enterprises. One thing that tenants must ensure is that they are protected within the tenancy agreement from any changes to income support following Brexit. We are advising anyone about to sign a contract or a tenancy agreement to add in a clause ‘subject to review following any reduction in subsidy due to Brexit’. Kathryn Williams can be contacted at the Oswestry office of Davis Meade Property Consultants on 01691 659658 email kathrynwilliams@dmpcuk.com

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