Prepare your farm now for a smooth sale in 2023

National property consultancy Carter Jonas said farmland sales have traditionally performed well during times of economic uncertainty as more buyers are looking to invest in safe assets. Evidence shows that well-prepared farms tend to sell faster than those with outstanding issues to resolve, as cash buyers prefer to do business without delay.

“Agriculture is a resilient industry, even in the face of considerable economic uncertainty, and land values reflect that,” said Andrew Chandler, head of rural agency at Carter Jonas.

“Arable and pasture land values have seen a 10-year annualised growth rate of 2.8% and 3.6% 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 added.

According to Carter Jonas, buyers with cash available are in a position to move faster due to the recent rises in interest rates affecting some mortgage offers.

“If you’re not ready, your farm could potentially be out-performed by another property.” Mr Chandler warned. “Cash buyers do tend to bid higher on land and property they know is ready, but they won’t wait around.”

While market conditions are less intense now than during the Covid-19 pandemic, there is still more demand than supply, and competitive bids can help secure premiums above the guide price in some circumstances.

Mr Chandler said farm and estate owners who put the ‘for sale’ sign up early next year may be better positioned to receive favourable offers:

“Quality offerings, and those located in a number of hotspots across the UK, are seeing considerable interest regardless of the time of year, so there may be advantages for those farms which are first to market in 2023.

“Building in time for the legal process is also advisable – sellers can mitigate risk by engaging professionals well in advance and being ready to proceed quickly.”

Making a positive first impression is also key. Completing minor cosmetic tasks can make a huge difference to the overall appearance of the farm and can be achieved quickly and inexpensively.

“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.

Moreover, potential planning opportunities can add significant value to a farm and are worth exploring, and establishing potential Capital Gains Tax liability is essential.

Mr Chandler said establishing good communication between the selling agent, solicitor and accountant can also help move the sale along faster.

“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,” he added.

Last but not least, buyers should also be ready to move quickly in order to be an attractive bidder. Mr Chandler advised buyers should contact agents to discuss their requirements and what may be coming to the market as a 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 said.