PrimeLocation

Almost everyone wants a smallholding these days. Cheryl Markosky finds out why.

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  • 09.04.14 Farms 5

    What is a smallholding?

    A smallholding is an agricultural holding smaller than a farm, according to the dictionary, while Ben Hamilton, head of Winkworth Rural, classifies a smallholding as “a house with land”.

    The Department for the Environment, Food and Rural Affairs’ (DEFRA’s) definition is a farm of less than 50 acres, according to Charles Birtles from Charles Birtles Property Search. “But I prefer my friend’s definition. If it makes money, it’s a farm and if it doesn’t, it’s a smallholding. There’s a lot of accuracy in that statement.”

    Increasing in popularity

    Despite any economic concerns, smallholdings are increasing in popularity. Birtles puts this down to a desire to know where our food comes from, helped in no small part by foraging TV chefs such as Hugh Fearnley-Whittingstall.

    “I have a friend who started off with just two pigs. He’s upped the total to more than 30, much to his wife’s chagrin considering he’s at work during the day and she’s left to care for them,” observes Birtles. “Other friends raise sheep and have begun swapping lamb for pork and wool for eggs with other smallholders.”

    Yet, not all smallholders are rufty-tufty types. The majority of smallholders Birtles deals with are townies, but with some rural experience having grown up in a rural area.

    “While they have no desire to become professional farmers, they want to connect to the land,” he points out.

    “The other buyer type we see is someone who’s never experienced farm living, but has long been a frustrated farmer,” suggests Charlie Wells of Prime Purchase.

    Charlie Wells

    Charlie Wells of Prime Purchase

    Popular areas include the two-hour band out of London for those who’ve really made money, and further afield into South Wiltshire, Somerset, Dorset, Herefordshire, Shropshire, Devon and Cornwall.

    Typically, those searching for smallholdings are young families, retirees or a specialist grower.

    “However, city-dwellers moving to the country are often surprised by how much an acre is,” says Carol Peett, of The County Homesearch Company in West Wales.

    Carol Peett

    Carol Peett, of The County Homesearch Company in West Wales

    “Although they think they want a lot of land, once they understand it takes a lot of maintenance they reduce their request,” she explains.

    A viable smallholding will need to be registered in order to apply for Government agricultural grants or subsidies.

    You need a County Parish Holding (CPH) number for land where agricultural activity or keeping livestock are carried out that’s obtained from the Rural Payments Agency. If you own livestock, you need to register your animals through a local office of the Animal Health Veterinary Laboratories Agency (AHVLA), advises Peett.

    As smallholdings are in high demand they can be tricky to get hold of. Some don’t even reach the open market and change hands via word-of-mouth at premium prices.

    Peett recalls a client unsuccessfully trying to hunt down a smallholding. “I heard through contacts that someone was considering selling, as their elderly parents were ill. I took my client to see the smallholding immediately and negotiated a quick exchange and delayed completion to allow the vendor time to sort out his affairs.”

    Beware of the vagaries of some smallholdings, including road noise, neighbours right on your doorstep and an inaccessible property up a long, potholed track.

    It can be difficult to work out the cost of a smallholding, notes Birtles. “Values vary considerably due to location, size of acreage and house type.”

    A rural land market survey from the Royal Institution of Chartered Surveyors (RICS) recently estimated land prices with accommodation (that wasn’t over half the total value) at £8,750 an acre, compared to land without accommodation at £7,400 an acre.

    Small, well-drained land plots with good access and a water supply are attractive for “the horsey culture”, believes Hamilton, “with prices in the region of £10,000 to £15,000 per acre.

    “The major factor is the price of the house – with houses ranging from small agriculturally-tied bungalows to large mansions. The value of the land is secondary,” he adds.

    Other considerations are Stamp Duty and Land Tax relating to agricultural land, and new EU legislation agreed last June introducing new hurdles to cross to benefit from the Basic Payment Scheme (BPS) of the Common Agricultural Policy (CAP).

    Currently, there’s a minimum size of one hectare (2.471 acres), which may increase to five hectares (12.5 acres). You must be an active farmer and comply with three rules around ‘Greening’ elements, including permanent grassland, crop diversification and maintaining ecological focus, says a Winkworth rural report.

    Rupert Lawson Johnston, manager of Hamptons International Marlborough, reminds eager smallholding buffs that ‘hobby farms’ come under the same regulations as farms, as outlined above.

    Rupert

    Rupert Lawson Johnston of Hamptons International

    “Therefore, there are restrictions on moving livestock. You’ll also need to familiarise yourself with flock and herd numbers, identification of animals, and so on. I suggest contacting DEFRA (helpline@defra.gsi.gov.uk) for further details,” he counsels.

    Despite the red tape, Gideon Sumption of Stacks Property Search, thinks that as long as farmhouses have at least three to five acres, they’ll outperform other rural property this year.

    He explains: “Land continues to be the new gold, so a good chunk of your investment is rock solid with a nice yield from the EU in the form of the Single Farm Payment. This covers maintenance and leaves you enough to keep you in good claret, or pay a local contractor to cut hedges, graze grass and mend fences.”

    As our island fills up, the premium placed on privacy is escalating. “It’s not rocket science, but just changing market fundamentals making farmhouses bulletproof provided they’re protected by land”, he adds.

    Tips for smallholding buyers by Emma Chalmers from CKD Galbraith

    • Be very proactive and stay in touch with agents
    • Keep an eye on property websites and sign up for email alerts
    • Do your research and get a feel for a community so when a property comes up, you can act quickly.

    Smallholdings for sale

    1. North Devon smallholding with a four bedroom barn conversion that has a self-contained annex, separate agricultural building and nearly four acres of land

    09.04.14 Farms 1

    2. Twenty-four acre, five-bedroom farmhouse with valley views, L-shaped barn, former dairy, hay barn and workshop in Carmarthen.

    09.04.14 Farms 2

    3. Period farmhouse in Balfron with extra accommodation in a traditional ‘steading’, outbuildings, stables and indoor arena in about 15.4 acres.

    09.04.14 Farms 3

    4. Three-bedroom house in Liddington with a block of four stables and gardens set in 9.5 acres.

    09.04.14 Farms 4

     

    Some information contained herein may have changed since it was first published. PrimeLocation strongly advises you to seek current legal and/or financial advice from a qualified professional.

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