Farms & Estates

Whilst the process of looking for and purchasing agricultural property is in many ways similar to that of buying a house, there are many additional factors that have to be taken into careful consideration. Your Recoco Property Search Farms & Estates Specialist, Robin Thomas, is well qualified and experienced in this process and has been successful in helping a number of Recoco clients find and negotiate the purchase of a number of farms and estates in recent years. His skill set, knowledge and contacts have proved invaluable to many clients when purchasing farms & estates as well as country houses.

Unlike the considerable number of houses offered for sale every year only a few farms and estates are offered for sale ‘on’ or ‘off ‘ market in any 12 month period. These are handled mainly by estate agents with London and regional offices having specialist Farm Agency departments and through reputable regional firms of auctioneers. Robin is in regular touch with these farm agents having practised as one himself for over 30 years.

Robin comments, “There is a considerable amount of due diligence that needs to be undertaken before a purchaser commits to exchanging contracts to purchase an agricultural property .”

The structure of the farm being offered for sale needs to be known as to whether it is purely the sale of a house, cottages, farm buildings, agricultural land, woodland and sporting rights or whether it is the sale of a farming business which might involve taking on the employment of existing agricultural employees known as TUPE .

There will be tax implications in the purchase including the possibility of having to pay and reclaim VAT in addition to the purchase price of the farm. There will undoubtedly be Stamp Duty Land Tax (SDLT) matters to consider such as ‘mixed use’ relief or ‘ multiple dwelling’ relief. There might well be unexpired Capital Taxation Allowances to take advantage of and to be transferred on the purchase. There will be the need to apportion the purchase price of the whole to various parts of the property such as the house, farm buildings and farmland.

All of the above will need to be discussed with a buyer’s accountant and solicitor and it is therefore imperative that the purchaser of a farm or estate instructs an accountant and solicitor who have experience in agricultural holdings and will work alongside the Recoco Property Search Agent during the pre-contract purchasing process.

The list to the right outlines some of the important matters to be addressed and with which Robin Thomas is fully conversant and can assist anyone wishing to purchase agricultural property.

• An awareness of the current value of the different types of farmland.

• The introduction to buyers, who need mortgage finance to purchase a farm or estate, to specialist mortgage brokers and lending institutions such as The Agricultural Mortgage Corporation, the agriculture departments of certain high street banks and specialist private banks such as Arbuthnot Latham.

• The suitability of certain agricultural land and buildings for different livestock enterprises.

• The quality of agricultural land varies enormously, is graded according to its productive capacity and thus arable land prices can vary considerably even within the same parish.

• Local knowledge of rainfall amounts, soil types and liability to flooding.

• Knowledge of current environmental schemes such as Countryside Stewardship, Sustainable Farming Incentive, Water Management & Slurry Infrastructure Grants.

• The need to call in specialists such as agronomists to advise on arable crops and weed and pest controls.

• The possibility of requiring specialist reports on such matters as asbestos, barn owls, bats, and Japanese Knotweed.

• The availability of grant aid for certain agricultural enterprises and operations.

• The introduction of buyers to solicitors experienced in conveying agricultural properties.

• The possible tax benefits of purchasing a farm with outstanding Capital Allowances on farm buildings, plant and machinery.

• The introduction of accountants to advise on the implications of Stamp Duty Land Tax (SDLT) and mixed use relief.

• The apportionment of the purchase price of a farm or estate between the residential and agricultural elements for tax purposes.

• Advice on the additional purchase of livestock, machinery, fodder and growing crops.