A
Henry Stewart Briefing
How Much
is Your
Farm Worth?
Chair
David Fursdon
Deputy President
Country Land & Business Association
Speakers
Mark Ashbridge
Agricultural Lending Specialist
Savills Private Finance
Michael Fiddes
Head of Rural Division
Strutt & Parker
Crispin Holborow
Head of Farm and Country House Sales
Savills
Steve Humphris
Partner
Countryside Solutions
Alastair Martin
Partner
Dreweatt Neate
Denise Ranger
Tax Partner
Bentley Jennison Chartered Accountants
Stephen Rice
Partner
Bidwells
Julian Sayers
Director
Adkin Rural & Commercial
Paul Silcock
Director
Cumulus Consultants Ltd
Carmen Suarez
Chief Economist
National Farmers’ Union
What
Constitutes a ‘Farm’ in Today’s Market? –
The Balance Between Residential and Agricultural Values
Balance between residential and agricultural values is dependent
on the following key factors:
• Location: The desirability of the area, amenities,
schools and communication
• Farm type: The potential for the future – flexible
cropping, the ability of the farm to grow profitable crops
and diversify
• Farm size: the curtilage and protective zone that
serves the residential element. Also the ability to protect
the main house – command of view and privacy
• Single farm payment entitlement issue (in the short
term) and the potential for additional landscape management
grants (ELS & HLS)
• Type of buyer: the ability to look beyond ‘farming
income alone’ and the willingness to deal with bureaucracy
• Farm income and profitability versus landscape and
lifestyle value
Using two model farms - in Hampshire and Lincolnshire -
the key variables as listed above will be appraised individually
and as a whole to ascertain whether there is an optimum
balance between the two and how this might vary between
these two model farms.
What can be done to optimise these values?
Analysis of historic and current data showing the variation
of the ratio in values between residential and agricultural
components.
Crispin Holborow
Head of Farm and Country House Sales
Savills
A
Nationwide View: The Current Farmland Market in England
and Wales
• Background – the critical influences over time
• Key factors
- location
- agricultural income
- residential market
- quality
- supply v demand
• Regional variations
• Entitlements
• Main buyers
• MTR
Michael Fiddes
Head of Rural Division
Strutt & Parker
CAP
REFORM: WHAT DOES THE FUTURE HOLD? HOW WILL IT AFFECT VALUES?
Incomes
From Farming
• What is affecting Agriculture Plc. - with examples
from across all sectors
• Relation between income from farming and farm values
• Determinants of farm income: a detailed analysis
• Farm incomes: forecasts and uncertainties
• CAP Reform: its impact on farm incomes and on land
values
• Assessment of future scenarios
Carmen Suarez
Chief Economist
National Farmers’ Union
Farm
Land Values
• The main drivers for the farmland market
• The impact of Single Payment Entitlements
on land values so far
• Transferring Single Payment Entitlements
• The saleability of naked acres
• Set Aside obligations and how they can be manoeuvred
to maximise value
• The influence of Single Payment Entitlements on future
farmland market trends
Alastair Martin
Partner
Dreweatt Neate
OTHER
SOURCES OF INCOME AND WAYS TO INCREASE CAPITAL VALUE
Diversification
and Leisure Activities
• What do we mean by diversification and why is it
important for farmers and landowners?
• Which diversification opportunities have been overcooked
and which are likely to be the rising stars?
• Holiday lets and tourism – how to maximise your
return through innovative thinking
• Equestrian – fine in theory, but potential pitfalls
in practice. Tips on how to be successful
Stephen Rice
Partner
Bidwells
Farm
Buildings – Capital Assets and Opportunities for Income
Generation
• Assessing the value of the assets available
• Planning for the future of the business
• Selecting the options to be pursued
• Dealing with the planning system to secure the desired
consents
• Managing the process of selling or developing the
selected buildings
• Other issues to consider - including finance and
taxation
Julian Sayers
Director
Adkin Rural & Commercial
Environmental
Issues: Opportunities and Constraints and Their Bottom Line
Consequences for Values
• Environmental protection obligations – cross-compliance,
NVZs, agricultural waste
• Environmental enhancement opportunities – new
agri-environment and woodland grant schemes
• Future pressure for more environmental gains –
favourable condition of SSSIs, implementation of the Water
Framework Directive, controlling diffuse water pollution
from agriculture
• Market opportunities from the environment –
recreation and tourism; food and other products; renewable
energy; flood relief; mitigation
• Impacts on land and rental values
Paul Silcock
Director
Cumulus Consultants Ltd
ALTERNATIVE
PERSPECTIVES
The
Investment Land Market: Basic Types, Components, Drivers
and Yields/Values
• Basic types and markets
- Agricultural Holdings Act
- Farm Business Tenancy
- in hand – portfolios
• Investment components – the mix and impact on
value
- farmland
- buildings
- residential
- amenity, sporting and fishing
- alternative use development /diversification
• Drivers
- economic factors including tax and finance
- profitability/rent
- lifestyle and location
• Returns and values; market outlook
Steve Humphris
Partner
Countryside Solutions
The
Farm Finance Market – How Much Debt Can You Raise Against
Your Farm?
• What criteria does a bank look for when lending money?
• How important is the valuation when property is to
be taken as security?
• What is the maximum loan to value (LTV) achievable?
• What are the alternatives to this form of borrowing?
Mark Ashbridge
Agricultural Lending Specialist
Savills Private Finance
What is the Farm’s Value When
Liabilities to Tax are Calculated
• Reaping the tax benefits from farming
• MTR and the tax man
• Reducing the tax on a land sale
• Making the most of development opportunities
• Diversification - the tax issues
• Inheritance Tax - how avoidable is it?
Denise Ranger
Tax Partner
Bentley Jennison Chartered Accountants
Farm
types and regions reviewed during the day – with clear
guidelines on values and strategies for maximising values
– include:
Locations from Somerset to East Anglia and north to the
Scottish borders; farm sizes from 200 to 2000 acres and
upwards; farm types, activities and buildings extending
from residential country house farms to fully commercial
arable farms, and including: production across all sectors,
conversion of estate buildings, woodland grants and agri-environmental
schemes, development of new commercial buildings, recreation
and tourism, flood mitigation, sales of traditional farm
buildings, holiday lets, sporting and fishing, renewable
energy, and equestrian activities, as well as farm values
from a few tens of thousands to many millions.
Henry Stewart Conference Studies would like to thank the Royal Agricultural College, Cirencester for their advice on the conference programme.