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    How will the interest rate rise affect landowners?

    By Accounting for Energy – (2.5 min read)
    The recent interest rate increase has caused a stir among the business community.  Despite being only the second rise in nine years, some feel the move by the Bank of England was ill-judged against the backdrop of an uncertain Brexit. What’s the impact on landowners’ land rent payments? Read on to find out.

    Landowners’ rent payments are generally made up of two fees: Minimum rent which is a flat rate linked to inflation; and turnover rent which is based on energy performance and is affected by interest rates.

    The interest rate rise from 0.5% to 0.75% is expected to have a positive effect on rent payments and landowners can anticipate an increase in their earnings for the following reasons:

    1. There is still an expectation that inflation, as we explained here, will rise as a result of higher wages in the future leading to a rise in minimum rents.

    2. Many landowners receive a fee based on turnover rent which is linked to a percentage of their electricity producer’s sale price. Given that electricity prices are likely to increase based on higher interest rates, landowners should also see an increase in their turnover based rent payments because of this.

    3.Higher interest rates would result in higher interest payments if a future rent audit reveals that any rents are underpaid.

    There is talk of there being another interest rate rise in roughly 12 months, which could be a green shoot of brighter days ahead. However experts warn that we are unlikely to see rates reach the levels that were experienced pre-recession, so even if your payments do increase over time, the hike will be gradual.

    Of course there are many factors to consider that could impact your specific contract, and of course we are still yet to see how Brexit will play out, but at least for now your payments won’t be adversely affected by the recent interest rate rise.

    If you would like more information on how interest rates will affect your land rent payments, or if you’d like our specialist auditors to review your contract, get in touch.

    Related blog post    New Tax Year

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      “We found your report informative and easy to read, it was good to see how the wind farm is performing and we were pleased with the results of the audit”

       

      Mark Charles, Exeter

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      Sara James, Durham

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    • “Early non-payment discovered so very happy with outcome”

       

      Martin Roberts, Peterborough

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    • “Excellent service. The review has given me peace of mind”

       

      Tracy Maria, Cumbria

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    • ‘We found the report very thorough and really interesting and were pleased that the payments have been corrected and appreciate your help with this very much’

       

      David Terrence, Devon

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      “In every instance Accounting for Energy have identified and recovered shortfalls in rent for my clients. Not only do the landowners receive back payments but they are also keen to show developers that they are being held to account.”

       

      Chris Thyer MRICS FAAV Land Agent, GSC Grays

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      “We don’t have comparable leases in renewable energy meaning there are few examples to draw from, so it’s always good to have checks and balances in place. We would recommend Accounting for Energy for their diligence.”

       

      Ali Walker Property Co-ordinator, Bath and Wells Diocese, Church of England

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      “The information provided by the turbine owner seemed to be comprehensive. The issue comes with knowing if all the data is complete and the audit was able to identify areas that we should have been receiving royalties on.”

       

      Ben Ardern Financial Controller, Dewlay Cheesemakers

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      “I worked with Travis on a set of arbitral proceedings to recover unpaid royalties on behalf of the landowners of a large renewable energy site. I was very inspired by his passion for his industry and his tireless commitment to getting the best results.”

       

      Sarah Bishop, Commercial Disputes Solicitor

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    •  

      “Travis is the go-to person for renewable energy landowner royalty payments. He gets into the details of a case, and is very tenacious in identifying and recovering any monies owed to landowners.”

       

      Grant Jones, Chartered accountant, solicitor and practicing arbitrator

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    •  

      “I would recommend Accounting for Energy because they are clearly experts in this area, and they were good to work with. It was an easy decision to get them on board because we really didn’t have the expertise or the time to be trawling through the lease and power purchase agreement.”

       

      Nick Kenyon, CEO, Dewlay Cheesemakers

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  • Testimonials


    • “We found your report informative and easy to read, it was good to see how the wind farm is performing and we were pleased with the results of the audit”

       

      Mark Charles, Exeter

      Share

    • “Job well done”

       

      Sara James, Durham

      Share

    • “Early non-payment discovered so very happy with outcome”

       

      Martin Roberts, Peterborough

      Share

    • “Excellent service. The review has given me peace of mind”

       

      Tracy Maria, Cumbria

      Share

    • “We found the report very thorough and really interesting and were pleased that the payments have been corrected and appreciate your help with this very much”

       

      David Terrence, Devon

      Share

    • “In every instance Accounting for Energy have identified and recovered shortfalls in rent for my clients. Not only do the landowners receive back payments but they are also keen to show developers that they are being held to account.”

       

      Chris Thyer MRICS FAAV Land Agent, GSC Grays

      Share

    • “We don’t have comparable leases in renewable energy meaning there are few examples to draw from, so it’s always good to have checks and balances in place. We would recommend Accounting for Energy for their diligence.”

       

      Ali Walker Property Co-ordinator, Bath and Wells Diocese, Church of England

      Share

    • “The information provided by the turbine owner seemed to be comprehensive. The issue comes with knowing if all the data is complete and the audit was able to identify areas that we should have been receiving royalties on.”

       

      Ben Ardern Financial Controller, Dewlay Cheesemakers

      Share

    • “I worked with Travis on a set of arbitral proceedings to recover unpaid royalties on behalf of the landowners of a large renewable energy site. I was very inspired by his passion for his industry and his tireless commitment to getting the best results.”

       

      Sarah Bishop, Commercial Disputes Solicitor

      Share

    • “Travis is the go-to person for renewable energy landowner royalty payments. He gets into the details of a case, and is very tenacious in identifying and recovering any monies owed to landowners.”

       

      Grant Jones, Chartered accountant, solicitor and practising arbitrator

      Share

    • ““I would recommend Accounting for Energy because they are clearly experts in this area, and they were good to work with. It was an easy decision to get them on board because we really didn’t have the expertise or the time to be trawling through the lease and power purchase agreement.”

       

      Nick Kenyon, CEO, Dewlay Cheesemakers

      Share
  • Testimonial with bg


    •  

      “We found your report informative and easy to read, it was good to see how the wind farm is performing and we were pleased with the results of the audit”

       

      Mark Charles, Exeter

      Share

    • “Job well done”

       

      Sara James, Durham

      Share

    • “Early non-payment discovered so very happy with outcome”

       

      Martin Roberts, Peterborough

      Share

    • “Excellent service. The review has given me peace of mind”

       

      Tracy Maria, Cumbria

      Share

    • ‘We found the report very thorough and really interesting and were pleased that the payments have been corrected and appreciate your help with this very much’

       

      David Terrence, Devon

      Share

    •  

      “In every instance Accounting for Energy have identified and recovered shortfalls in rent for my clients. Not only do the landowners receive back payments but they are also keen to show developers that they are being held to account.”

       

      Chris Thyer MRICS FAAV Land Agent, GSC Grays

      Share

    •  

      “We don’t have comparable leases in renewable energy meaning there are few examples to draw from, so it’s always good to have checks and balances in place. We would recommend Accounting for Energy for their diligence.”

       

      Ali Walker Property Co-ordinator, Bath and Wells Diocese, Church of England

      Share

    •  

      “The information provided by the turbine owner seemed to be comprehensive. The issue comes with knowing if all the data is complete and the audit was able to identify areas that we should have been receiving royalties on.”

       

      Ben Ardern Financial Controller, Dewlay Cheesemakers

      Share

    •  

      “I worked with Travis on a set of arbitral proceedings to recover unpaid royalties on behalf of the landowners of a large renewable energy site. I was very inspired by his passion for his industry and his tireless commitment to getting the best results.”

       

      Sarah Bishop, Commercial Disputes Solicitor

      Share

    •  

      “Travis is the go-to person for renewable energy landowner royalty payments. He gets into the details of a case, and is very tenacious in identifying and recovering any monies owed to landowners.”

       

      Grant Jones, Chartered accountant, solicitor and practicing arbitrator

      Share

    •  

      “I would recommend Accounting for Energy because they are clearly experts in this area, and they were good to work with. It was an easy decision to get them on board because we really didn’t have the expertise or the time to be trawling through the lease and power purchase agreement.”

       

      Nick Kenyon, CEO, Dewlay Cheesemakers

      Share

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