Agricultural Holdings Act 1986

1 (1) For the purposes of section 12 of this Act, the rent properly payable in respect of a holding shall be the rent at which the holding might reasonably be expected to be let by a prudent and willing landlord to a prudent and willing tenant, taking into account (subject to sub-paragraph (3) and paragraphs 2 and 3 below) all relevant factors, including (in every case) the terms of the tenancy (including those relating to rent), the character and situation of the holding (including the locality in which it is situated), the productive capacity of the holding and its related earning capacity, and the current level of rents for comparable lettings, as determined in accordance with subparagraph (3) below.

(2) In sub-paragraph (1) above, in relation to the holding—

(a) " productive capacity " means the productive capacity of the holding (taking into account fixed equipment and any other available facilities on the holding) on the assumption that it is in the occupation of a competent tenant practising a system of farming suitable to the holding, and

(b) " related earning capacity " means the extent to which, in the light of that productive capacity, a competent tenant practising such a system of farming could reasonably be expected to profit from fanning the holding.

(3) In determining for the purposes of that sub-paragraph the current level of rents for comparable lettings, the arbitrator shall take into account any available evidence with respect to the rents (whether fixed by agreement between the parties or by arbitration under this Act) which are, or (in view of rents currently being tendered) are likely to become, payable in respect of tenancies of comparable agricultural holdings on terms (other than terms fixing the rent payable) similar to those of the tenancy under consideration, but shall disregard—

(a) any element of the rents in question which is due to an appreciable scarcity of comparable holdings available for letting on such terms compared with the number of persons seeking to become tenants of such holdings on such terms,

(b) any element of those rents which is due to the fact that the tenant of, or a person, tendering for, any comparable holding is in occupation of other land in the vicinity of that holding that may conveniently be occupied together with that holding, and

(c) any effect on those rents which is due to any allowances or reductions made in consideration of the charging of premiums.