Preparation key for farmland sales in 2023, says Carter Jonas
Farm and estate owners planning to sell land in 2023 are being advised to use the winter months to prepare for a sale if they are to capitalise on the spring market.
National property consultancy Carter Jonas says the UK being in recession is driving interest in safe assets, and that farmland has traditionally performed well during times of economic uncertainty.
There is also evidence that well-prepared farms are out-performing those which have outstanding issues to resolve, as cash buyers look to move quickly to completion.Carter Jonas Head of Rural Agency, Andrew Chandler, explained: “Agriculture is a resilient industry, even in the face of considerable economic uncertainty, and land values reflect that.
“Arable and pasture land values have seen a 10-year annualised growth rate of 2.8 per cent and 3.6 per cent respectively. The market is predicted to continue to benefit from an ever-expanding pool of motivated buyers, who are interested in a range of holdings from prime lifestyle land to unproductive blocks of marginal land for natural capital purposes.”
He continued: “If you’re not ready, your farm could potentially be out-performed by another property.”
“Cash buyers do tend to bid higher on land and property they know is ready, but they won’t wait around.”
Although the market has quietened a little since the intense period experienced during the Covid-19 pandemic, demand is still outstripping supply, and competitive bids can help secure premiums above the guide price in some circumstances.Creating a positive first impression is invaluable, so preparing your farm for sale well ahead of time is key. Smartening up your farm and carrying out minor cosmetic tasks can be achieved quickly and inexpensively but could make a huge difference to its overall appearance.
“Ensure all your paperwork and agreements are up to date; carrying out due diligence such as checking your farm is registered with the Land Registry, that you have approved maps from the Rural Land Registry and that any agri-environment schemes or management agreements can be easily transferred to a potential purchaser will save you time down the road,” Mr Chandler added.
“We aim to achieve the best possible price for our clients, so it’s important to carry out thorough groundwork in advance of the marketing to make sure sales can proceed without any unwelcome surprises.”
Potential planning opportunities should be explored as these can add significant value, and establishing potential Capital Gains Tax liability is essential.
“Consulting your accountant at an early stage is sensible, as is ensuring good lines of communication are established between your selling agent, solicitor and accountant prior to launching your property on the market,” Mr Chandler continued.
“Ensure you engage a reputable and well-respected agent with experience in rural property and land management who will provide you with objective, balanced and unbiased advice.”
Buyers should also be in a position to move quickly in order to be an attractive bidder.
Mr Chandler said contacting agents to discuss their requirements and what is potentially coming to the market is an obvious starting point.
“Buyers needing to borrow funds need to take into account that this is not as simple as it was a few months ago – talk to lenders and ensure you will be able to access the necessary funds before moving forwards,” he concluded.