Tenants reject criticism of landlords about prices

The land tenants are not surprised about the lease standards for 2019. They brush off the landlords' criticism that the regional standards for leased areas are too low. This is reported by the Association of Land Tenants and Own Land Users (BLHB) in a statement on Monday 3 June.

The BLHB responds to this the lease standards, which will come into effect on July 1. This shows that rents are rising in areas with mainly dairy farming and falling in areas with arable farming. This is in accordance with the calculation that Wageningen UR carries out on the basis of the principles of the lease prices decision from 2007.

The publication has Friday 31 May led to great annoyance among lessees, which are united in the Federation of Private Land Owners (FPG). Landlords are particularly annoyed by the price reduction in 5 leased areas, of which the drop of 38% for the Southwestern clay area is most striking. According to the FPG, this, in combination with the annual fluctuations in lease prices, puts pressure on the lease system. "The new lease standards are therefore indicative of the bankruptcy of the current lease system."

Yield under pressure
The tenants are not impressed by the grumbles of the tenants. The BLHB points out that the current lease system was established through an agreement between LTO Nederland, the Dutch Agricultural Youth Contact (NAJK), the BLHB and FPG. "The criticism that the regional standards are too low and should not be lowered is unjustified," the BLHB said. "The lessors also wanted this system."

According to the FPG, the return on the leased capital is under further pressure due to the price reductions. The lessees have noted that the lease standards are moving further and further away from developments in the land market. This can be particularly taxing for the lessors, given that the tax standards are based on the land price.

Increasing frustration
Landlords who have concluded long-term leases are particularly hard hit, according to the FPG. "This leads to frustration. In addition, all the conditions for regular leases (such as the continuation right, pre-emption right, lease price test and right to substitution) mean that this form is considered extremely unattractive for lessors," explains FPG.

The tenants hint that they find this criticism excessive. "Unlike other investments (including savings), the lease price provides a more direct return on their investment. In addition, the asset value of agricultural land has increased by more than 30% over the past 300 years and agricultural land has a very stable value. ", the BLHB nuances. "On average in the Netherlands, rent prices in 2019, compared to 2007, have risen sharply. The increase was stronger than the inflation rate over these years."

Calculations not transparent
The tenants declare that they are not completely satisfied with the elaboration of the current lease price system. They comment on the representativeness of the companies that provide the data for the calculations. In addition, the BLHB finds the calculated income of the entrepreneur and the reservation too low in the system.

Eric the Thrush

Eric is a member of the editorial staff of Boerenbusiness. As a descendant of an arable family, farmer's blood flows through Eric's veins. He considers himself a generalist, but with a preference for economics, trends, markets and marketing.

e.delijster@boerenbusiness. Nl

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