Agricultural holdings and tenant farming guide

Rent reviews

Best practice requires that the rent review process of negotiation between tenant farmer and landlord should start long before the actual ‘term’ date.

As the relationship between landlords and their tenant farmers, or either of their representatives, should be nurtured by regular contact, the rent review process should be seen as a normal, but important, part of the business relationship.

Either of the parties involved in the agricultural holdings tenancy arrangement can initiate a rent review, if they feel that it is appropriate.

Although the legislation requires a formal style of notice, the actual rent review process should be seen as part of the normal working relationship. Both parties should engage in the rent review process from a position of mutual respect and with a desire to reach an acceptable conclusion to both sides. This process could result in an agreement that the rent should increase, remain the same or even that it should be reduced.

There are a number of publications to help guide you through the process: 

• The Tenant Farming Forum (TFF) has published a brief guide to good practice on Farm Rent Reviews – an Introduction and Guide to Good Practice as an accompanying document that should be read in conjunction with formal rent review notices 
• The Scottish Agricultural Arbiters & Valuers Association (SAAVA) has produced and published a Practitioners Guide to Scottish Agricultural Rent Reviews to assist individuals when undertaking rent reviews
• The Tenant Farming Commissioner has issued an updated guide on Conducting Rent Reviews as a follow-up to the joint industry guidance, published in August 2015 

Rental Values

The annual December Agricultural Survey includes questions on how much a tenant is paying per hectare for their rented land. The survey illustrates the reported range of rents being paid for some types of land as well as regional variations. The most recent data – collected in December 2019 – shows:

• the average rent for non-Less Favoured Area (LFA) land, was £132 per hectare (ha). In real terms, this is three per cent lower than it was in 2018
• since 1999, average real terms rents have fallen from £155 to £132 per hectare for non-LFA farms
• the average rent for LFA land was £27 per hectare, down by one per cent on 2018
• for LFA land, rents have increased marginally from £26 to £27 per hectare

These annual surveys also identify trends over the last 20 years.