In the White Avon office, we have recently been very successful in tendering for several farms for our clients, including three quite high-profile Farm Business Tenancies with very different situations.

A common theme amongst the three tenders, was that they didn’t all go to the highest bidder, or the one paying the so called, market rent, although in all three cases they were close to that figure, as economic return will always matter.  What does matter is delivering what the landlord wants for their farm.

In one case, the landlord was a retired farming couple, looking for stability, to keep stock on the farm and to see it farmed well, as it had formed their lifetimes work.  In another case, a large institutional land owner, looking to work with a tenant, to integrate future development opportunities for the farm and in the third case, a very run-down farm, let by a local authority, needs a business able to invest capital and cash in it, over the tenancy period.

The other outcome from this is the tenant is in a stronger position to negotiate terms and deal with issues, such as Brexit and volatile crop prices.  It is likely Brexit will bring more land to the market in the future and depending on tax regime, we think a significant amount of this will come as Farm Business Tenancy, which offers landowners clear returns, with less risk from volatile prices, compared to Contract Farming.

Contract and Share Farming will always be popular, due to the obvious tax benefits, but delivering the landlords requirements, in terms of how the farm is managed and integrating their wishes and objectives, is equally important for Contract and Share Farming, as it is for Farm Business Tenancy, albeit, less control is yielded in the former case.

Needless to say, any rent tender must be competitive, but must also leave a satisfactory margin for the tenant and must be right for their business.

If you would like further information, please contact Max at maxsealy@fcgagric.com