2018 closed with a record volume of agricultural land on the market, with 96,600 acres listed throughout the year.
The trend continued into 2019, but, while land is there for the taking, buyers have remained elusive, the spectre of Brexit continuing to haunt the market.
For those counting on divesting agricultural land in 2019, competition is fierce, making it more important than ever to plan-ahead effectively and take the right advice.
Choose the right time
While some farmers will choose to sell their land simply because the time is right for themselves and their business, for others the driving force is divorce, illness or death.
For those with the luxury of choosing the most opportune time to sell, spring and summer should take precedence, when estates look their best.
Think ahead about cropping plans to make sure the land makes the best impression when the time comes to sell.
Take advice from the experts
Finding the right expertise should be your first port of call - selling land isn’t something you should seek to do under your own steam, even in part.
When choosing an agricultural land agent, it’s wise to select someone with an established reputation in the area, ideally someone about whom you’ve received recommendations.
Failing that, there are various online directories listing reputable, experienced land agents, promoters and surveyors, including the NFU.
Having the right team on board will increase the chances of achieving a sale at the right price and avoid any pitfalls with the potential to frustrate the process.
Professional advisors will be invaluable when it comes to protecting your future income - for example, a “Claw Back Provision” should be included in the sale - if the land is sold again for a different use within a specified amount of time, you should be compensated appropriately.
Consider all your options
The right advisor should also challenge your presumptions - perhaps you’d assumed that your land would be sold on as agricultural, farming land - yet there may be other options available to you that could see a greater financial return, or which could avoid a lengthy process on the open market and instead achieve private sale.
An early appraisal of the land should be completed, which will size up the options at your disposal. If your land adjoins neighbouring farmland, it’s sensible to first approach the owners of those farms or parcels of land, a process which should be led by your agent.
Your neighbours may be prepared to pay a premium for the geographical convenience offered by joining land.
When you’re in the process of divesting land, it’s easy to get swept up in the many tasks that come with readying a plot of land for sale. However, don’t make the mistake of failing to give full consideration to the potential for the land in the future - perhaps even many years from now.
Is there any development work taking place in the area, or any large infrastructure plans? If so, think about the impact of these works in the long-term and whether it could prove advantageous, increasing the value of your land.
If your land happens to adjoin an existing settlement, it’s likely that your land would be highly attractive to land promoters or housebuilders for residential development.
Securing planning permission on agricultural land hasn’t always been straightforward, but, as the housing crisis has continued to deepen, the government has sought to ease the process for locations where the building of residential dwellings would be appropriate.
For example, the National Planning Policy Framework (NPPF) includes a new policy which allows homes for first-time buyers to be built adjoining settlements on fields which otherwise may not be suitable for development.
While larger sites will generally be more attractive to housebuilders, there is also opportunity for smaller sites to be sold for residential development.
The NPPF proposes a target of 20% of allocated housing sites to be small (0.5ha) or less, offering opportunity for development of smaller plots of land without prejudicing the viability of the wider farm business.
Smaller plots of land with access to utilities and with an access route may also be attractive to self builders, which is an option that shouldn’t be discounted.
There are various options to advertise self build plots, the most straightforward being to list on www.MyPlot.co.uk – which can also help you find specialist advisors - but this is something that an experienced agent will be able to advise you on.
Securing planning permission in advance is essential if it’s to be sold as a development opportunity. An experienced land promoter will be able to handle this for you, securing the planning permission on your behalf.
Do your research and think to the future
The sale of land for development is an area which, ideally, should form part of a long-term strategy.
Many farmers will report that the use of their land has varied over time, with changes made in response to the needs of the farm business. However, it’s important to have an eye on the future when any changes are being made.
Make sure that easements and rights of way are researched fully - think about what you’re left with.
For example, you need to think about the road access you’ll have to the remaining land - if you sell your land closest to the road, you risk eliminating the development potential of your remaining land, which may now be accessible only by very narrow lanes.
The same is true of drainage – selling a plot of land which leaves you without access to natural drainage like a river or stream can increase the development costs of the land you
Assumptions are dangerous at the best of times, but never more so than when it comes to planning for your future - don’t be a victim of assumptions when selling your land. If it isn’t suitable for new homes, is commercial development an option?
If it’s close to a railway station or arterial route, it could well be. Nothing should be off the table when developing your sale strategy.