486 SCIENCE OF AGRICULTURE. Part II. 



Q, What sum ought to be paid for a lease held like the last on two lives of twenty and forty years, but 

 to continue during the existence of either of the lives, to pay five per cent, and get back the principal ? 



A. Sixteen years purchase. 



Q. What sum or fine ought a tenant to give for the renewal of four years lapsed in his lease of ten 

 ye irs, in order to make seven per cent, interest of his money and get back the principal ? 



A. Two years and a quarter purchase of the annual value or clear profit which he makes of the 

 holding. 



Q. A farmer is offered a lease during the life of a person aged thirty years, to what term certain is that 

 coisidered equivalent? 



A. Twenty-one years. 



Q. In a lease held originally on three lives, but of which one is dropped, the ages of the lives in pos- 

 session being forty and sixty ; what sum ought the tenant to pay for passing in a new life, aged fifteen, in 

 order to make five per cent, interest and return the principal ? 



A. Three years and a quarter of the clear improved rent or profit which he has in the lease. 



Q. A has an estate in land and houses let for 105/. per annum. He wishes to sell the reversion of this 

 rent after the death of his father aged sixty-five years, his wife aged forty-one, and himself aged forty- 

 three; required the sum that must be paid by the purchaser ? 



A. The father's life is worth ten years ; the wife's twenty ; and his own eighteen years ; say twenty- 

 one years ; as the probable period at which the property will fall to the purchaser of the reversion. Then 

 the value to the latter is the present value of an annuity of 105/. a year, due twenty-one years hence. This, 



3099. In the valuation of freehold landed property, the clear annual value must first be 

 ascertained by a minute examination of every part of the estate, and of every in- 

 ternal and external circumstance affecting it. An estate may be neglected, or underlet 

 on short or long leases, or overlet by means of bonuses, or favorable conditions given to 

 the tenants ; or it may be burdened by parochial taxes ; these, and a number of other cir- 

 cumstances require to be taken into consideration in determining its annual value. The 

 annual value is often different from the annual produce, and therefore, in making a cal- 

 culation of the sum to be paid for an estate, the difference between them forms an essen- 

 tial part of the data. Thus an estate of the annual value of 100^. may be let on a lease 

 of v^'hich fourteen years and a half were unexpired for 80/., in which case there must be 

 deducted from the price the present value of an annuity of 20/. for fourteen years and a 

 half Thus if twenty- five years purchase or 2500/. was the price agreed on, there must 

 be duducted 200/. 



3100. In determining the sum to be paid for estates in perpetuity there are no guides of 

 universal application but the state of the market and public opinion. However, a sort of 

 abstract principle has been laid down as applicable to this country, which it may be worth 

 while to notice. N. Kent, a land agent of much experience, says, (Hints to Gentlemen of 

 landed Property, &c. 1793. p. 266.) "the want of a criterion to determine the price of 

 estates creates doubt ; and doubt impedes the transfer ; any thing therefore that can aid 

 the purpose of passing estates from one person to another, with the greater facility, may 

 be properly introduced here." Suppose then that the gradual scale, by way of an outline, 

 be taken up thus : When the fundg stand pretty steady at four per cent, the standard 

 of mortgages may be considered at four and a half: the fee simple on the neat return 

 of land ought then to be current at three ; copyholds of inheritance upon a fine certain, at 

 three and a half; copyholds with a fine at the will of the lord, at four. Tliis general rule 

 is short, and may be registered in the mind of every man of business. At the same time 

 Kent stales, that " nineteen times out of twenty, estates are bought and sold upon 

 round numbers." 



3101 - In making calculations of the value of estates, the following rules deserve notice. 

 In order to know the number of years' purchase that ought to be given for an estate in 

 perpetuity, according to the several rates of interest which the purchaser may wish to 

 make of his money, it is only 'necessary to divide 100 by the rate of interest required, and 

 the quotient will shew the number of years' purchase that ought to be given. 



S102. With respect to the value of freehold estates, or the gross sum which ought to be 

 paid for the same, Bailey observes, we may either multiply the number of years' purchase, 

 found as above, by the annual rent of the estate, or we may "multiply the annual rent 

 of the estate by 100, and divide the product by the rate of interest which we propose to 

 make of our money ; the quotient will be the sum required." For example, the sum 

 which ought to be paid for a freehold estate, of the clear rent of 90/. per annum, so that 

 the purchaser may make 4 per cent, interest of liis money, is found either by multiplying 

 25 by 90, which gives 2250/. for the sum required ; or by multiplying 90 by 100, which 

 produces 9000 ; and then dividing this product by 4, which gives 2250/. as before. The 

 first way is the most expeditious, where the number of years' purchase is an even quan- 

 tity ; but the latter will be found the most ready, where the number of years' purchase 

 is a fractional quantity, or is not precisely known. Thus, the gross sura which ought 

 to be paid for a freehold estate of the cJear rent of 150/. per annum, in order that the 

 purchaser may make 7 per cent, interest of his money, is found by multiplying 150 

 by 100, which produces 15,000, and then dividing this product by 7, which gives 

 2142/. 17s. 2d. for the sum required : now if, in answering this question, we had begun 

 by finding the number of years' purchase which ought to have been given for the 

 same, the process would have been rendered much more tedious and intricate. 



