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16th September 2020
Peter Daborn, Partner in Roger Parry & Partners Shrewsbury office, answers…
Answer: Making the decision to offer your farm in lots, that has been whole for generations can be difficult, but it could be the best option for building interest and encouraging competition. Understanding the reason for the sale is the first step and typically the financial return is the main driver.
About 70% of the farms brought to the market last year were offered both as a whole and in lots. In previous years, the majority would have been sold in lots but unusually in 2019, more than half (58%) were sold, or the sale agreed, as a whole unit (house, buildings and land).
We have seen more confidence from farmers who are thinking of Brexit as a short-term bump and borrowing money long-term, often thinking about the next generation.
Splitting the farm into lots can undoubtedly be an emotive issue but it all boils down to our main objective of achieving the maximum possible sale price.
Dividing the farm into smaller parts increases the appeal of the property to a wider range of potential buyers: those looking to purchase whole farms; residential buyers looking for a house with a few acres; those searching for bare land to add to an existing holding and investor buyers.
Different types of purchasers being interested creates competition, which can, in turn, help achieve the best possible price and speed up the sale process.
Not every farm is suitable for splitting into lots however and knowledge of the local market and who is likely to buy is a crucial part of deciding how to launch a property.
Please contact us if you are looking for expert advice on selling your farm.