Farmland Value And Rent Predictions For 2010

26 March 2010

Chris Addison-Scott predicts that rent reviews will continue to show significant increases where reviews have not been carried for many years, however...

Chris Addison-Scott, partner and head of the firm’s rural department outlined his predictions for farm rent reviews at our 2010 Spring Briefing. He predicted that they will continue to show significant increases where reviews have not been carried for many years. However, reviews which have been undertaken on a more regular basis will show much smaller, if any, increase. 

   
Chris said: “An interestingly growing trend which I’m experiencing in the let sector is the continuing process of tenants retiring from agriculture through agreement with their landlords. Compensation is often in the region of 25% of the vacant possession value of the land and under the current SFP rules that payment can either continue to be claimed on naked acres elsewhere or sold for a further capital sum by the farmer. After 2013 that option may not be available. We are currently working on several such proposals and expect to see the trend continuing.”

This year will be a year for consolidation in farm rents according to Chris, with both landlords and tenants being reluctant to have rental disputes referred to the Scottish Land Court.

The value of farmland was also discussed with partner Simon Brown predicting a continuation throughout 2010 of interest from neighbouring farmers being the major bidders for any farmland coming up for sale, as well as interest from farmers looking to relocate as the money supply becomes more available for the agricultural industry. 

Simon said: “Investors see farmland as a safe place to put money during difficult times and a strong involvement from investors is likely. There have been some quite staggering returns on capital recently which has encouraged investors to move money into the farmland market. However, it must be noted that the growth in the past five years came from a very low base which will not be repeated in the next five years.

2010 is looking positive with Simon confident that in 2010 a slight rise in the value of agricultural land will be experienced.

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