Andrew Fallows, Head of Rural Agency at Carter Jonas, says now is the ideal time to begin preparations to ensure an effective launch followed by a smooth sale.
If you’re thinking of launching your farm in 2021 or beyond, what can you do now to start to prepare?
1. Photograph your farm at its best
A big merit of early preparation is the ability to showcase farms in the best possible light.
Photographs can be taken while the landscape still looks green and leafy which will help design an attractive set of particulars to showcase the property.
2. Get your sales and legal team in place
Andrew says it is important to allow time to appoint a strong sales and legal team.
“Having the right people advising and ironing out any issues will put you in pole position to proceed,” he said. “This includes preparing information ahead of time, such as creating a legal pack.”
3. Gather information in advance to ensure a smooth sale
Providing buyers with RPA plans, entitlement statements and environmental stewardship agreements in a data room saves time in the due diligence process too, Andrew added.
Are there any restrictive covenants, clawbacks or rights of way which may affect the land?
4. Compile the necessary paperwork
Energy performance certificates, details of boundary maintenance responsibilities, crop yield records, drainage plans, planning permission certificates, details of any easements and information on services for electricity, water and sewerage are all required.
5. Understand your tax liability
Early discussions with your accountant are also vital to fully understand your tax liability.
6. Consider planning permission for redundant buildings
Starting early also gives sellers the opportunity to work with agents to add value.
“Thinking ahead and actually securing planning permission on redundant buildings, for example, can unlock significant and immediate value,” he said.
7. Investigate mineral reserves
As well as buildings, investigating the potential for mineral reserves presents an opportunity to increase market value.
8. Spot renewable energy opportunities
Renewable energy diversifications can also increase market value. “These things take time but are well worth it,” Andrew added.
9. Check Land Registry
Are the title deeds to the property correctly registered with the Land Registry? If not, this can put the brakes on the process.
10. Get the timing right
“If you begin planning now you can iron out any potential problems and get your property properly prepared and ready to bring to the market,” he said.
“That will put you in a strong position to move quickly when buyers become more active and other land becomes available. If you don’t plan, you may miss opportunities and the process can be drawn out over many months.
“We are already seeing prospective clients who are planning to sell a farm in the spring rather than this winter, so the market could become busy and those who have prepared well will be in the box seat.”
SHOULD I SELL MY FARM IN 2021?
While Covid and Brexit have created some uncertainty in the marketplace, Andrew says 2021 presents opportunities that may benefit sellers.
“With a delayed budget from the Chancellor, we are in a period where the tax environment at present is settled so buyers and sellers know where they are. This, in itself, is a compelling reason to progress a sale or purchase,” he said.
Although Brexit negotiations are still ongoing, Andrew adds that with a clear policy intention to use public money for public goods, diversified businesses and those with varied landscapes or features enabling them to take advantage of future policy direction will also be well placed.
“The Covid world has also crystallised the desire for many to have more space and when lockdown started to ease a lot of areas had more spring in their step than before,” Andrew says.
“Leisure and lifestyle are proving to be big selling points. Rural land in close proximity to good travel networks is high in demand from lifestyle purchasers. So 2021 could present a sterling opportunity for sellers.
“Farmers who are thinking of selling a farm next year can capitalise upon these opportunities, but they need to prepare to be in a prime position when the starting gun is fired on 2021 sales.”
Thinking of buying or selling a farm? Contact Andrew Fallows on 07775 562044 or firstname.lastname@example.org