TENANT farmers have been advised against rushing to end their tenancies - they should sit back and consider how much the tenancy might be worth.

That advice was given by Hugh Fell, of George F White, who addressed 200 farmers at a regional Tenant Farmers' Association meeting at Hexham mart on Wednesday of last week.

"In most cases your tenancy of land and property will be worth something," he said. "The extent of that value depends on the type of tenancy, the level of rent, the facilities available, the liabilities and the nature of your landlord."

Mr Fell said tenancies protected under the Agricultural Holdings Act of 1986 gave full security of occupation and, in most cases, would be worth more than a farm business tenancy.

"The level of rent you are paying will affect the investment value of the farm - the higher the rent level, the more it is worth to the landlord, or another investor who may be interested in buying that type of property," said Mr Fell.

However, he said one of the most important factors might be the objectives or needs of the landlord, who might be happy to keep the family as tenants for generations or might be keen to occupy the property himself or raise capital through its sale.

A fully-protected tenancy was generally worth more to the tenant as the rent was set by a specific formula below the open market level. It also gave life-long protection, potential succession for other generations and the repair and insurance clauses were sometimes less demanding.

Mr Fell urged tenants to consider the "vacant possession premium" - the difference between the value of the farm with vacant possession and its investment value with a sitting tenant in place.

He gave an example of a 400 acre farm whose investment value with a sitting tenant was £462,000 but which, without a tenant, was worth £1m - a VP premium of £538,000 which could not be unlocked without the surrender of the tenancy.

It would be a very powerful bargaining tool for the tenant.