Can I profit from farm land?
Discussion
I have been looking at a new house today that comes with 3 acres of land. All green belt and clearly can't be built upon.
However, can I set up a glamping business on it or even purchase an old gypsy style caravan for airbnb? The house comes with a seperate two bedroom annexe which would lend itself well to airbnb so I just wondered if I could use the land/garden as well?
The house also has a further 10 acres to buy which the current owners think is worth £20k per acre? This seems like a lot if it is only agricultural land. Nottinghamshire if it helps with the responses.
However, can I set up a glamping business on it or even purchase an old gypsy style caravan for airbnb? The house comes with a seperate two bedroom annexe which would lend itself well to airbnb so I just wondered if I could use the land/garden as well?
The house also has a further 10 acres to buy which the current owners think is worth £20k per acre? This seems like a lot if it is only agricultural land. Nottinghamshire if it helps with the responses.
Edited by jjr1 on Wednesday 15th October 22:51
£20k/ac, whether that represented value all depends on where exactly it is. It also depends on whether they try to bang an overage clause on it.
13ac of agricultural land sees you in an interesting place with respect to Permitted Development. It is only a whisker over the 5 hectare threshold, so measure carefully!
There are rules as to what you can/can't do. Some ignore them, some follow them... some then try to get retrospective permission (which is annoying for anyone who has played by the rules).
Worth having a read up on 28 day temporary alternative use in case that gives you enough time to make money.
If you're new to owning a bit of land, be ready for horsey people trying to see if you'll rent it to them. Horsey people are, seemingly without exception, entirely mad.
13ac of agricultural land sees you in an interesting place with respect to Permitted Development. It is only a whisker over the 5 hectare threshold, so measure carefully!
There are rules as to what you can/can't do. Some ignore them, some follow them... some then try to get retrospective permission (which is annoying for anyone who has played by the rules).
Worth having a read up on 28 day temporary alternative use in case that gives you enough time to make money.
If you're new to owning a bit of land, be ready for horsey people trying to see if you'll rent it to them. Horsey people are, seemingly without exception, entirely mad.
I've been considering camping business for several years- I think it's possible, but challenging. You'll def need planning (you can allow camping for up to 28 days I think without, but that isn't fixed units IIRC). Planning isn't straightforward or a given. Don't be tempted to do it without - lots of people trying that since covid (camping market jumped) and councils are carrying out enforcement to remove. Your neighbours will very likely object (increased traffic/noise etc).
Also, not sure how viable a business it is anymore since so many are doing it - of course that does depend on where.
If you need a mortgage to buy it then it might cause issues if you turn it into a commercial enterprise.
Obv it can work, helps if you have a USP - lots of people going down the eco route so that isn't original any more. What I have seen do well is the forest holiday style cabins or chalets and hottubs - good money but of course strict planning and big investment.
Also, not sure how viable a business it is anymore since so many are doing it - of course that does depend on where.
If you need a mortgage to buy it then it might cause issues if you turn it into a commercial enterprise.
Obv it can work, helps if you have a USP - lots of people going down the eco route so that isn't original any more. What I have seen do well is the forest holiday style cabins or chalets and hottubs - good money but of course strict planning and big investment.
Panamax said:
That price is pure comedy.
Not necessarily. Some near me recently went for almost double that.You get some people playing the long game, some desperately wanting land to augment their holding, or others with rollover money burning a hole in their pocket and keen to get it back into land at almost any price.
ETA: 10ac is also a nice manageable parcel for aforementioned mad horsey people, so often priced at a premium vs regular ag.
Edited by LooneyTunes on Wednesday 15th October 17:52
Panamax said:
jjr1 said:
The house also has a further 10 acres to buy which the current owners think is worth 20k per acre?
That price is pure comedy.You'll almost certainly need planning permission.
Panamax said:
jjr1 said:
The house also has a further 10 acres to buy which the current owners think is worth 20k per acre?
That price is pure comedy.You'll almost certainly need planning permission.
jjr1 said:
I have been looking at a new house today that comes with 3 acres of land. All green belt and clearly can't be built upon.
However, can I set up a glamping business on it or even purchase an old gypsy style caravan for airbnb? The house comes with a se pirate two bedroom annexe which would lend itself well to airbnb so I just wondered if I could use the land/garden as well?
The house also has a further 10 acres to buy which the current owners think is worth 20k per acre? This seems like a lot if it is only agricultural land. Nottinghamshire if it helps with the responses.
I would imagine that any form of business depending on how the land is currently classified will require a degree of planning permission or equivalent required. However, can I set up a glamping business on it or even purchase an old gypsy style caravan for airbnb? The house comes with a se pirate two bedroom annexe which would lend itself well to airbnb so I just wondered if I could use the land/garden as well?
The house also has a further 10 acres to buy which the current owners think is worth 20k per acre? This seems like a lot if it is only agricultural land. Nottinghamshire if it helps with the responses.
The land itself may already contain covenants or restrictions as to future use.
Access to it may or may not be an issue and indeed if “ land locked “ then worth less.
Quality of so called farm land may vary but if genuinely only good for pasture or horse grazing etc then £ 20k pa sounds somewhat excessive and more akin to what additional 1 acre “ garden plots “ might be worth.
Fwiw we have around 7 acres of additional land bought purely for horse grazing on top of the 4 acres we already had and today it’s probably £10k pa tops and that’s based on the ability to market our house as a fully able equestrian property.
That’s in Buckinghamshire if it makes a difference which I’m not sure it does particularly.
Don’t forget as well that it will all need maintenance too.
LooneyTunes said:
Not necessarily. Some near me recently went for almost double that.
The likelihood of anything selling as agricultural land at £40,000 an acre is pretty much zero. Perhaps you'll post a link. In some areas wealthy people pay silly money for small pony paddocks but that's a different subject altogether. ATG said:
It's double the price of genuine farmland but if it's adjacent to your house then it isn't just farmland .... It's farmland that's right next to your house, and that adds value. The house and land combined could be someone's "equestrian" facility, god help us all, or someone's smallholding, or someone could try to get permission to erect temporary structures like a shepherd's hut concentration camp for urbanistas. Round our way (get orf moi laaand) the rule of thumb is to get an estate or land agent to estimate the increase in value of the house if it included the land and split that uplift 50 50 with Farmer Giles.
Yes this land is adjacent to the house for sale with the 3 acres. If I owned it I would feel safer that it could not be used for anything that I would not like. If it can only be used to graze horses on I would not care so much. Panamax said:
LooneyTunes said:
Not necessarily. Some near me recently went for almost double that.
The likelihood of anything selling as agricultural land at £40,000 an acre is pretty much zero. Perhaps you'll post a link. In some areas wealthy people pay silly money for small pony paddocks but that's a different subject altogether. For the reasons already given, there have been £30k+ prices achieved on multiple plots locally in the past few years. Entirely up to you whether or not you believe it. Get letters every few months from outfits wanting to buy land.
LooneyTunes said:
One of the largest dairy farming families in the county, and conveniently located wrt other operations, not a pony paddock.
For the reasons already given, there have been £30k+ prices achieved on multiple plots locally in the past few years. Entirely up to you whether or not you believe it. Get letters every few months from outfits wanting to buy land.
We get letters too but never any prices suggested. For the reasons already given, there have been £30k+ prices achieved on multiple plots locally in the past few years. Entirely up to you whether or not you believe it. Get letters every few months from outfits wanting to buy land.
Perhaps I’m underestimating our values ?
I did ask my wife if to quote you she was mad but apparently only “ slightly “ and she preferred the word quirky
jjr1 said:
If I owned it I would feel safer that it could not be used for anything that I would not like. If it can only be used to graze horses on I would not care so much.
This is the reason to own it, not necessarily to make any money from it, the fact you know nobody is going to stick 100 new builds on it in 10 years time.'you don't buy a house for the view unless you own the view'
Buy the view.
We have a bit of farmland. It is used by the local sheep farmer for grazing. Keeps the fields in good condition and saves me having to look after it. No money changes hands, but any boundary maintenance is their responsibility (and dry stone walls are expensive!). I had thought about doing more with it but access isn't easy and we don't have much passing trade.
This makes sense as to why I want to own it. The thought of finding out the government changes policy and houses can be built on land next to me would piss me off royally.
How we negotiate on its value though will be interesting? I believe they value it because it could be used for horses.
How we negotiate on its value though will be interesting? I believe they value it because it could be used for horses.
Im in the process of buying some land from a farmer next to my house. The agreed cost is £20sqm and im in north east Scotland.
I need to be careful though in terms of planning as the land is currently used for agriculture (although this bit grows poorly). I intend to use the land for a small holding so veggies, fruit trees, bees, ducks, poly tunnel etc.
I need to be careful though in terms of planning as the land is currently used for agriculture (although this bit grows poorly). I intend to use the land for a small holding so veggies, fruit trees, bees, ducks, poly tunnel etc.
jjr1 said:
How we negotiate on its value though will be interesting? I believe they value it because it could be used for horses.
As with any negotiation the sellers circumstances also play a part ie are they equally happy not to sell and keep it for whatever future use or if you don’t buy will they simply put on the open market ?Access other than through “ your “ property is also a consideration.
Is what you are “paying “for the house itself and the small acreage reasonable ?
Maybe google land prices round there and try and gain a reasonable average ?
All things being equal though if you keen on acquiring the land and it’s held on separate title to the house then nothing to stop you offering what you think it’s worth to you and then negotiation no doubt will follow.
It's irrelevant what land is worth in the rest of the UK, it's how much you're willing to pay for the bit next to your house as you can't move it about
The guide of 10K an acre has been around for as long as I can remember and I paid more than that 12 years ago for the land next to my house - because it was next to my house
I seem to remember the camping and caravaning club have some kind of exemption for small sites, might be worth a Google
I've also seen people rent land for dog training / dog walking so there are lots of possibilities depending where you are based
The guide of 10K an acre has been around for as long as I can remember and I paid more than that 12 years ago for the land next to my house - because it was next to my house
I seem to remember the camping and caravaning club have some kind of exemption for small sites, might be worth a Google
I've also seen people rent land for dog training / dog walking so there are lots of possibilities depending where you are based
Negotiating for land like this is complex as it clearly has significant ‘marriage’ value to the house (assuming it’s directly adjacent or adjoining), which likely elevates its value well above standard agricultural land.
The seller will know this, but they should also realise that this elevated value will only apply if selling with the house (or any other direct domestic neighbours, if there are any). If they are concerned about losing out on future development value then an overage clause might be worth considering - if you have no intention of developing then it’s sort of risk free - but would definitely complicate a future sale (if the overage clause is still within the time period).
Personally, I would always try hard to secure any adjoining land, if a change of use would have a material impact on the value or enjoyment of the house (we’re in a very slow motion negotiation with and adjoining farmer - 3 years of very friendly but unproductive discussions…). It’s not just planning for houses that could be a risk - a pig farm, a huge new barn, solar panels or a campsite may be more likely risks in the short term.
One other thing to consider is that adding larger amounts of land can complicate you getting a mortgage (if that’s relevant).
The seller will know this, but they should also realise that this elevated value will only apply if selling with the house (or any other direct domestic neighbours, if there are any). If they are concerned about losing out on future development value then an overage clause might be worth considering - if you have no intention of developing then it’s sort of risk free - but would definitely complicate a future sale (if the overage clause is still within the time period).
Personally, I would always try hard to secure any adjoining land, if a change of use would have a material impact on the value or enjoyment of the house (we’re in a very slow motion negotiation with and adjoining farmer - 3 years of very friendly but unproductive discussions…). It’s not just planning for houses that could be a risk - a pig farm, a huge new barn, solar panels or a campsite may be more likely risks in the short term.
One other thing to consider is that adding larger amounts of land can complicate you getting a mortgage (if that’s relevant).
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