Do you need to consider a rent review? – George Drewett (Chippenham)

Currently commodity prices remain strong, and the Basic Payment income has not reduced significantly yet.  We do need to be mindful that in the next 12 months things could be significantly different, therefore any land which is rented on a farm business tenancy or AHA tenancy may need serious consideration for a rent review.

We are working with clients at the moment, some of which have lodged rent reviews last year and these are now being revised with the landlord as we speak, and we are also working with clients to lodge rent reviews now prior to September with the aim to readdress the rent in the next 12 months.

When you create a budget on the land that you rent, whether this be livestock or arable, what profit does this generate?  If you exclude rent from this budget, what percentage of the profit are you giving back to the landlord?  If you fast forward this budget to the next 12 months when basic payments reduce further, how do these figures change?  It is important to understand these figures in preparation for the changes that lie ahead.

If you require any assistance to analyse rental figures, please contact George at georgedrewett@fcgagric.com  or your local FCG office.