Short term rents on the rise

There has been much talk in the County about the higher rents being paid on Short Term Agreements and on both grassland and arable, demand is strong. As always though, whether renting or selling, location is the key factor.

Rising-RentMany farming businesses have invested heavily in infrastructure during recent years which has required more access to land. The subsequent increase in land values has led to the increase in rent on Short Term Agreements.

For those buying land at more than £10,000 per acre the interest charges are £400 per acre so rents at less than £400 per acre could be argued to be cost effective.

In many cases, where these higher rents are being paid, there are special circumstances being taken into account including closeness to the main unit, the ability to graze the land or indeed other requirements for the farming business of a secondary house and so forth.

Tony Rimmer would urge all farmers not to get carried away with the high level of rent, but look at each parcel of land on its own merits and what it is worth to your business.

He said: “Also consider whether it includes or excludes Single Payment because the ability to claim Single Farm Payment can effectively reduce the rent by £60 per acre.

“ I would far rather be paying £220 per acre with the ability to claim Single Farm Payment than pay £175 per acre with no rights to claim Single Farm Payment.”

This rise in rent does give the option for those looking for a way out to rent their land perhaps on a different sort of agreement to a traditional Farm Business Tenancy that will enable the working farmer status to be maintained, but equally the ability to get these high levels of income and for some this is an option worthy of consideration.

If you wish to look at your options then please feel free to contact the Rostons office.