In its Agricultural Rents Database for 2011, Smiths Gore reports that agricultural rents rose by an average of 25 per cent across England, Wales and Scotland in the 12 months to 31 October 2011.

The survey draws data from 1700 rent settlements since 2007 over 500,000 acres and a total rent roll of more than £23 million per annum.

The rent increase in 2011 was higher than that in 2009 or 2010, with arable and livestock rents increasing the most. In the last three years, the average increase in rent has been 21 per cent which, for an average sized farm, has meant a rent increase of £3500 per year.

In terms of tenancy type, Farm Business Tenancy (FBT) rents rose by the most – an average of 33 per cent, with Agricultural Holdings Act rents rising by 20 per cent.

FBT rental growth during the last 12 months was also significantly higher than in years to October 2009 and October 2010.

In terms of regional variation, North East and North West England saw an average increase of 23 per cent with an average new rent of £76 per acre compared with £62 per acre in 2010.

In East Midlands and Yorkshire, rents rose by an average 24 per cent, or a new average rent of £82 per acre compared to £62 per acre in 2010.

In the South West and West of England, rents rose by 24 per cent with a new average rent of £78 per acre.

Eastern England saw the highest average increase of 32 per cent with an average new rent of £96 per acre.

Simon Derby, Partner, of Smiths Gore’s Taunton office says: “Farm Business Tenancy rents are rising faster because they are influenced by strong results from open market lettings. Indeed, our data shows that there are a number of drivers that affect the buoyancy of the rental sector, and clearly open market rentals are one of them. Others include the quality of the land and the soil, and the quality and quantity of buildings on equipped holdings. Equipped holdings continue to yield higher rents than bare land lettings.

“The majority of rental increases reflect improved profitability, but other factors include for example different priorities on dairy units switching from dairy to rearing dairy replacements, and the installation of renewable energy technology.