Rural Estate Management – Rent reviews
How many rural land and estate owners were on the receiving end of rent review notices from their tenants, whether AHA or ATA on their Rural estates last year when commodity prices plunged and before the Brexit currency bounce kicked in?
Whereas the scope prior to the bounce for Rural estate owners to be put in apposition where rents would need to be reduced was significant the pressure is now significantly reduced.
On one Rural Estate where a long term ATA tenant was paying £150/acre for Grade 3 arable land I am now expecting not to have to reduce the rent at all.
I well remember when the ATA was enacted on some farms on rural estates, now that any rent review mechanism could be put in place, referencing the rent to a tonne of Feed Wheat. That would have turned out to have not a bad yardstick.
I am reminded too of the inequities produced by the two codes as applied to AHA tenancies and ATA tenancies on Rural Estates. I conducted rent review of a rural farm holding where the tenant was on a 1986 Act tenancy. I also knew that down the road he was paying the equivalent of £150/acre for open market land. He still pleaded poverty on the 1986 act tenancy despite having a house on the holding and we settled at £80/acre arable. I also remember the tenants advisor suggesting that the house had nil rental value because the tenant was obliged to live there!
On a recent review of a Contract arrangement for Arable land on another Rural Estate my client was offered just £98/acre total return by the contractor and £140/acre on a tenancy for growing Maize for an AD plant.
Doubtless this will all be re-written in 2020 when the Government, in my opinion, will slash direct support and link the remainder to cross-compliance work.
For more see: www.sherbornestatemanagement.co.uk.