Rural
iSSUe 6 Winter 2018/19
MATTERS
The clock is ticking... on the tenant amnesty and energy eďŹƒciency l DiversiďŹ cation: Campsites and holiday cottages
l Agricultural support payments after Brexit l First-time land buyer? What you need to know
l Boundary disputes: Land registration can help
WELCOME
A year full of challenges
CONTENTS
4 A guide for first-time land buyers.
6 Welcome to the latest edition of Rural Matters. it has been an interesting year with particularly challenging weather where we moved swiftly from the Beast from the east into a prolonged hot and dry spell. these extreme weather patterns created havoc for estates and farms alike with grouse shooting being cancelled and supplies of winter provisions being put under severe pressure both from a lack of yield and the need for supplementary feeding of livestock in the field during summer! the cereal harvest has produced mixed results but in general crop yields are not as poor as envisaged. With bullish commodity prices this sector of agriculture could enjoy a reasonably profitable year. the potato harvesters are currently at work and only time will tell how badly this crop has been affected by the dry summer, if at all. Changes in technology continue at an unprecedented pace in the rural sector. An openness and willingness to embrace these changes, regardless of a ‘deal’ or ‘no deal’ Brexit, will determine success in the future. Our consultants enjoy sharing their expertise; we hope you enjoy reading the articles in this edition. ian Hope Head of rural
Land registration and boundary disputes.
8 COVER STORIES: The clock is ticking on new energy standards and the tenants’ amnesty.
10 Holiday lets add a new dimension to a family estate.
12 Field sports: A tough year, and a sporting rates conflict.
14 Student placements. The benefits of planned maintenance.
16 A mansion that pays its way. Ash dieback.
18 GALBRAITH is Scotland’s leading independent property consultancy. Drawing on a century of experience in land and property management, the firm is progressive and dynamic, employing more than 250 people in offices throughout Scotland.
Diversifying with a campsite. Rural valuations: a look behind the scenes.
We provide a full range of property consulting services across the commercial, residential, rural and energy sectors. Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.
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rural Matters is produced by Galbraith and designed by George Gray Media & Design, St Andeux, France. © CKD Galbraith LLP.
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The answer (sort of) to a big Brexit question Leaving the EU will mean changes in agricultural support payments. Colin Stewart tries to cut through the fog of uncertainty.
Since the vote to leave the eU in June 2016, a regular question i am asked is: "How will that affect agricultural support payments going forward?" it’s a good question, the answer being that, at the time of writing, nobody really knows. nevertheless i will attempt to set out the current position. the reality is that change from the current Basic Payment Scheme was inevitable, notwithstanding the vote to leave the eU. the Common Agricultural Policy (CAP) was due for reform anyway with a new agricultural support system to be in place from 2020. However, the UK will not be part
of the new CAP discussions as we are due to leave the eU on March 29, 2019. it is highly likely – but not certain – that the UK will agree with the eU to a transition or implementation period to provide time to agree the way forward. Until there is agreement on matters such as the single market, animal welfare, crop chemical legislation, movement of labour and a whole host of other things, it is assumed that the current CAP will continue to apply within the UK. there should be some comfort for farmers that the Basic Payment Scheme should continue to be received for several years to come. this is based on the UK Government already confirming that the same level of funding to agriculture will be guaranteed until the end of the current parliament, which is expected to be in 2022. this includes both Pillar i and Pillar ii support which includes Agri environment payments. the fly in the ointment with this announcement is what happens if an election is called before 2022 with any following Government unable to give such guarantees. i mentioned uncertainties with regard to agreeing a transition from the current support structure and this is becoming more of a possibility, with much of the discussion currently centering on a ‘no deal’ scenario. the UK Government has already released 25 technical notes to help farmers and the country in general know what to do if ‘no deal’ becomes a reality. the Scottish Government's involvement in all of this has included the launch of a public consultation just before the 2018 Highland Show. the consultation, which closed on August 15, sought views on options to stabilise and simplify income support for land managers in Scotland in the period immediately after the UK leaves the european Union. it focused on providing a transition period of approximately five years but in the first two years after leaving the eU, a proposal to keep CAP payments in Pillar i and Pillar ii largely as they are in the interests of stability. the Scottish Government also sought views on how to provide a simplification for schemes to help current claimants and improve delivery of policy goals. We will obviously await the outcome of this consultation but hopefully for the benefit of all of our farming clients, it is extremely unlikely that there will be a sudden cliff edge following the departure from the eU. it is almost certain that there will be some form of continuation of payments at least
for a number of years in order to provide stability and to allow farmers time to adjust to the eventual ‘new world’ postBrexit. Fundamentally of course, business owners should be trying to reduce the reliance on subsidy in the longer term and should not delay in reviewing business activities, enterprises, and cost structures in an effort to reduce the risks of Brexit.
Basic Payment Scheme entitlement transfers On a separate point, we are often asked whether the current Basic Payment Scheme entitlements can be traded. As with the old Single Farm Payment, Basic Payment Scheme entitlements can indeed be traded, and Galbraith is arguably the largest broker of entitlements in Scotland with the brokerage department being run from our Perth office. it is a straightforward procedure with deals done by private treaty. As brokers, we match both sellers and buyers in accordance with the number of entitlements and payment region being traded, remembering of course, that in Scotland we have three payment regions.
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it is almost certain that there will be some form of continuation of payments at least for a number of years.
Having concluded the trade by telephone, this is followed up by contract paperwork which is issued to the parties. Following payment of the entitlements, we then complete the SGrPiD transfer forms and submit these along with copies of the sale contracts. Although it is a straightforward procedure, it is essential for the process to be carried out correctly with accurate completion of the relevant forms. Galbraith has a long history of acting as brokers for entitlements and can offer specialist advice in this area. there is however quite a short window for trading entitlements which must be completed by April 2 each year in advance of the May 15 Single Application Form deadline.
colin.stewart@galbraithgroup.com 01738 448 144
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Land purchase: A guide for first-time buyers Isla King offers some insights into land purchase to help the growing band of newcomers to the market.
THeRe is certainly no reason to be unnerved if you find yourself considering land, or a property with land, as your first purchase. to give an insight into the process we have chosen to focus on Aberdeenshire, where our analysis shows that the value of land is parishspecific and the demand from first-time buyers is growing. the graph below shows the types of buyer for properties that included land sold by Galbraith Aberdeen in 2017 and 2018 so far. outside Aberdeen
2017
12% 2018 up to Q3
8% local to Aberdeen
53% 46% neighbour
23% 31% First-time buyer
12% 15% Here’s a snapshot of what to consider before a land purchase. As the saying goes there is no such thing as a stupid question! A map can be an important tool, especially if you are unfamiliar with the location. Some of the benefits of a clear boundary plan are: • A general indication of the lie of the land and index of fields • the location of any buildings in relation to the land for sale • Access routes • the proximity of any privately-owned residential properties.
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Use your viewing as an opportunity to learn from the hosting agent or seller’s wealth of knowledge of the land and property. review the brochure and be prepared by thinking of questions before the viewing.
2 3
there are many documents you should be aware of...
entitlements: Basic Payment Scheme is available to farms which have been allocated payment entitlements as a result of the Common Agricultural Policy. there will be a flat rate entitlement value for each region from 2019 but there is some uncertainty regarding
future subsidies. Details can be found on www.gov.scot. For example, to participate and receive subsidy the farm must have a minimum of three hectares of land that is being used for agricultural activities. An agent would be able to advise you on this. Planning consents and building warrants: it is important that the correct consents and completion certificates are in place, and your solicitor should consider this when creating the contract. if the correct consents aren’t in place and building regulations have changed since the time the building was established, additional works may be required to meet the current specification to obtain a building warrant. this could be time-consuming and costly. Septic tank registration certificates: Private septic tanks must be registered with SePA. energy Performance certificates (ePcs): these give the property an energy efficiency rating from A (most efficient) to G (least efficient). Properties let privately after April 1, 2019 will need a minimum standard of band e. More information on the changes to ePC requirements can be found on www.gov.scot. Home report: A survey of the property showing the current market value and schedule of condition. Are there any areas of concern or potential liability visible? Private water supplies: it is important that any private water supplies have been tested by environmental Health to ensure the water is fit for human consumption. Some banks won’t advance lending without a guarantee of adequate water. You should also consider who has ownership of the water supply and if any third parties have a right to the supply. it is also important to consider that the local council must be notified of any let properties with a private water supply by January 1, 2019. existing leases: Be cautious of any ongoing leases – residential, agricultural, sporting, etc, and any conditions or clauses, especially informal agreements. Always seek legal advice. ongoing obligations or payments: For example, Agri environmental Climate Schemes, Woodland Grants and wayleaves payments for utilities. What is the value? if you are unsure of the value of the property you could instruct an agent to act in an advisory capacity. However, it is important that you determine the price you are willing to pay based on your objectives and planned use for the land. there may be additional factors influencing value: • existing grants and subsidies
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• Sporting potential • Any income from utilities • Any third party rights and accesses Legal process elements: Arrange your finances and appoint a solicitor at the very beginning. it is never too early to arrange your finances to ensure you are in a position to make an offer when the land and property that’s right for you comes to the market or a closing date arises. if you are prepared it may put you in a stronger position compared to other buyers.
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note interest: Meaning the agent is obliged to advise you of a closing date. make your offer: remember to consider how the property has been marketed – for example ‘offers over’, ‘guide price’, ‘fixed price’ or ‘offers in the region of’ – as this may influence your initial offer. Your solicitor will be able to advise you. The contract: Once a written offer has been accepted the sale is not binding until the purchaser’s solicitor and the seller’s solicitor have reached a formal agreement on all terms of the contract. this agreement is known as Conclusion of Missives. The conveyancing: the title deed will need to be examined by the purchaser’s solicitor to establish the extent of the property and any obligations, such as maintenance of a shared access. Once the searches are complete the solicitor will create a Diposition (title deed) transferring ownership. Settlement: transfer of funds meaning you become the new owner of the land and property.
tax implications when buying land: Land Buildings transaction tax (LBtt) is proportionate to the price of the property. the tax payable is calculated based on residential and non-residential bands. the percentage rate for each band is applied up to the threshold with the remainder in value charged up to the next threshold.
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non-residential property transactions: lBBT rates and bands Purchase price
LBBt rate
Up to £150,000
0%
£150,000 to £300,000
3%
Above £350,000
4.5%
Residential property transactions: lBBT rates and bands Purchase price
LBBt rate
Up to £145,000
0%
£145,000 to £250,000
2%
£250,000 to £325,000
5%
£325,000 to £750,000
10%
Above £750,000
12%
Additional Dwelling tax of 3% may be applicable to some purchases. More information on the tax band thresholds and calculator are available on www.gov.scot.
isla.king@galbraithgroup.com 01224 860 710
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There may be advantages to registering title with the Scottish Land Register, especially if the land in question is close to a centre of population. Poppy Baggott explains.
Boundary disputes: Benefits of land registration in the urban fringe one focus of the land Reform (Scotland) Act 2016 was to increase the transparency of land ownership in Scotland. the General register of Sasines, one of the oldest records of property ownership, is progressively being replaced by the Scottish Land register, which was established in 1979 and is an Ordnance Survey map-based public register of land where all property titles for Scotland will be held. entries to the Scottish Land register are generally triggered by sales, purchases and transfers of land, as well as through the process of voluntary registration. Since 2016 Galbraith has helped clients with this process either through the creation of plans, or in the event that the clients are existing management clients, in assisting solicitors with clarifying title and actual physical boundaries on the ground. there is currently no legislation to enforce registration, but many people with an interest in land or property have
taken the decision to register their titles voluntarily, outwith the sale or transfer process. the superior quality and clarity of the title plans required by the registers of Scotland define property boundaries with an exactness which the Sasines register plans often do not provide, thus affording what is held to be ‘better title’. this could protect against adverse claims of possession in the future as well as facilitating succession planning, refinancing and estate management. there are various additional reasons for considering voluntary registration. For example, urban fringe estates may have issues with fly tipping which is hugely contentious as the waste becomes the responsibility of the landowner to remove as soon as it is dumped on their land. Fly tipping is generally reported to the local authority, which will then look to pass on the problem to the appropriate person. Holding a clearly marked and definitive title plan in this instance is
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very helpful, as arranging the removal of fly tipped waste can become costly and extremely frustrating, particularly if there is doubt as to whose responsibility it is. Owners of urban fringe land may also benefit from clear title for reasons of public liability. if a pedestrian is injured by falling in a pothole on a pathway, there is a potential claim against the landowner. A clear title can help to quickly and clearly absolve a landowner from blame, or it can be used by the landowner as a means of knowing where potential liabilities lie so that accidents can be prevented. Potential development is another reason for urban fringe landowners to be in possession of a clear title, as it is likely that at some point they will be affected by development, either of their own volition or another party’s and an unarguable title could considerably facilitate this. One of the main benefits of holding good title is that it could save on
Voluntary registration: A case study Daniel Campanile reports on a complex process. one of the mechanisms used to establish greater transparency of ownership across Scotland as part of The land Reform (Scotland) Act 2016 is voluntary registration. there is no ‘one size fits all’ or quick solution, and the path to voluntary registration depends on the nature of the estate and requires diligence. Voluntary registration for large complex rural estates with a protracted history is far from straightforward. Good engagement with the estate owners, estate workers, land agents, the legal profession, mappers and registers of Scotland is fundamental throughout the process as all stakeholders have important roles to play.
“ substantial expense and aggravation in the event of a boundary dispute. if your neighbour registers their title first, they will effectively hold ‘better title’ and will be in a stronger position in the event of an adverse claim of possession. During the recent sale of a rural property it transpired that the access to the property was not legally in the possession of the vendors, but belonged instead to a neighbouring property. the neighbour who legally owned the access could grant a deed of servitude but was reluctant to do so, as there was a possibility that the purchasers of the property would further develop and increase the burden on the road. the purchasers confirmed that they had no intention of building further houses but were keen not to make the servitude unduly restrictive for any future sale of the property. An alternative was put forward by another neighbour, who was happy to provide an access route to the property across their land at a cost in the region of £10,000. the conclusion was that the buyers proceeded with the purchase without a servitude right of access over the existing track on the condition the price was reduced by £10,000 to reflect the possibility of them having to build a new access road and obtaining a deed of
One of the main benefits of holding good title is that it could save on substantial expense and aggravation in the event of a boundary dispute. servitude from the other neighbour over an unadopted track. if the title to the property being sold had been clearer initially, the vendors of the house could have avoided a protracted sale, with increased legal fees and the loss of £10,000. there will be many more reasons, particular to individuals, when considering whether to undertake voluntary registration, but having indisputable proof of what you own certainly goes some way to avoiding a number of problems relating to property ownership. And of course maintaining good relations with neighbours generally makes for an easier life.
poppy.baggott@galbraithgroup.com 01556 505 005
Galbraith has worked closely with Dinnet and Kinord estate for a number of years providing a variety of rural based services. So when the estate expressed a desire to undertake voluntary registration late in 2015 Galbraith was well placed to initiate and oversee the work as well as playing a key role in the mapping and project management. Dinnet and Kinord proved to be an example of complex voluntary registration, but the process was aided by excellent local knowledge on site by existing estate staff, well organised legal titles and advice, and early dialogue with registers of Scotland with whom Galbraith has a well-established working relationship. Despite all this, the work involved was formidable and complex with several lengthy foundation titles, some with plans of varying quality, some without, and more than 300 break-offs that subsequently had to be excluded. Galbraith applied and developed well-established workflows to see the job through to final submission in early 2018 offsetting the timescales against value for money without compromising the quality of the work required.
daniel.campanile@galbraithgroup.com 01786 434 634
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Have you got the energy to be efficient? Privately rented properties will soon need to meet higher standards of energy efficiency, which may prove particularly challenging for landords with rural properties. Poppy Baggott reports.
THe Scottish Government’s latest consultation on energy efficiency, published in may, sets out proposals for a new long-term standard to be met by 2040 in accordance with the climate change (Scotland) Act 2009. the responses to this consultation are still being processed, but as time marches inexorably towards 2019, Galbraith feels it is vital that those with an interest in property are aware that change is afoot and action will be required, with inevitable financial implications. As regards legislation, it is proposed that from April 1, 2019, all privately rented properties must be at a minimum band e before they can be let, and by March 21, 2022, all privately rented and already tenanted properties will need to be at this standard. March 2025 is being proposed as the deadline for properties to reach a minimum band D. energy Performance Certificates (ePCs) have been required for properties which are to be let or sold since January 2009, but the information recorded on the ePC certificates has been informative rather than regulatory. ePCs currently have a lifespan of 10 years, so the first
properties to be assessed will now be due for renewal.
fines in Scotland will increase over time to match this.
Previously a landlord may not have considered this necessary unless the property was to be re-let, but we suggest it is now worth considering whether improvements have been made within the last decade that would alter the rating. Property owners would be well advised to bear these imminent regulations in mind when properties become available between tenancies and there is a chance to increase energy efficiency.
the consultation process has highlighted that there is concern over the division between the rural and urban sectors, in that the way in which an ePC is assessed makes it harder for rural properties to score a high energy efficiency rating.
the suggested lead-in time for properties to become compliant is relatively short, with landlords being given six months from the Minimum Standards Assessment to carry out required works. Currently there appears to be no standard for landlords to refer to as regards specifications, so we strongly suggest requesting input from an ePC assessor or surveyor about the most appropriate measures and options available prior to scheduling work. Local authorities will be allocated powers to enforce the regulations, with the current penalty for non-compliance being up to £1,500. in england penalties are up to £4,000 and it is thought that
CASE STudy A DetACheD listed house on an estate managed by Galbraith in the Scottish Borders became vacant earlier this year, and with the property’s ePC rating sitting at band G, renovation prior to reletting was a must. the poor rating was largely due to a dated heating system, inadequate insulation and single-glazed windows. Details of exemptions for listed buildings are still a little hazy, so there is uncertainty about the extent of works which will be allowed versus those which will be required. however, the works undertaken were extensive enough and the property was reassessed and rated at band D, which will ensure that, with the proposed timescales, it will be compliant in 2025. the expense was probably greater than the owner might have hoped to spend, but the property is now more environmentally friendly, more economical to run, legal to let, and can
command a higher rent. there are irrefutable benefits to upgrading properties, both environmentally and financially, but the initial financial burden, especially for those with poor quality or numerous properties could be difficult to shoulder. the drive for increased energy efficiency and decreased environmental impact will only gain momentum, with the latest energy efficient Scotland consultation proposing that all homes must be at least an ePC band C by 2040. this has been identified as the Long-term Domestic Standard and the Scottish Government is proposing it be achieved by 2030 for the private rented sector. Proposals and the resulting deadlines continue to evolve, so advice should be sought prior to commencing improvement work, and Galbraith, with a wealth of experience in both the rental sector and building surveying, would be happy to help.
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Key characteristics that determine energy efficiency include heating systems, the amount of heat lost through exposed surfaces and therefore the proportion of exposed surfaces in the building as well as the materials used in walls, windows, roofing and insulation. rural properties are typically detached, stone dwellings often lacking adequate insulation. Few are connected to the gas grid so they can be more expensive to fuel. therefore landlords of rural properties may face a greater challenge than those in urban areas. With regard to grants, we recommend that more research be done into funding, but at present interest-free loans can be obtained from Home energy Scotland. energy efficiency improvement funding is available for owners, occupiers and eligible registered private sector landlords, although it should be noted that landlords can only apply for funding for up to three properties. Home energy Scotland also offers advice from a specialist landlord advisor and property inspections to give more specific advice on funding available. the list of exemptions is yet to be finalised and there are some fairly grey areas. Properties within agricultural tenancies are not included, but if the same cottages are re-let to nonfarmworkers on a Private residential tenancy (Prt), then this exemption may not apply. Landlords of listed properties may also receive a level of exemption, but this has yet to be defined. One area outwith the standard private rental sector which will be affected is holiday lets, where ePC regulations will apply where the property is let for four months or longer in a year and where a person is paying for ‘exclusive use’ of the property (ie a holiday cottage, not an Airbnb room).
poppy.baggott@galbraithgroup.com 01556 505 005
The clock is ticking on tenants’ amnesty Tenant farmers risk losing the value of improvements they have made unless they act quickly, says Claire Wilson.
WiTH less than two years remaining of the amnesty period for tenants’ improvements introduced by the land Reform (Scotland) Act 2016, there initially appears to have been a slow uptake. However, there has been a lot of recent activity to both increase awareness and emphasise the importance of the amnesty. tenants are being encouraged to get the ball rolling to allow plenty of time to prepare and discuss the agreement with their landlord. On many holdings across the country, tenants have carried out considerable works which have improved the farm. if the correct procedure for notifying landlords of tenants’ improvements, as set out in the 1991 Agricultural Holdings (Scotland) Act, is followed such improvements will be eligible for compensation if the tenancy terminates. However, all too often this process is ignored and when there is a lack of written records, the arrangements of the past can be unclear. this can result in ambiguity over the ownership of fixed equipment, frequently leading to lengthy disputes during the already difficult process of determining compensation at the end of their tenancy. in a bid to reduce uncertainty over tenants’ improvements, the amnesty provides a one-off opportunity for tenants to ensure past improvements are properly recorded and those eligible are fully compensated at waygo. Furthermore, having a clear-cut list of tenants’ improvements will be beneficial during the rent review process as rent must only be charged on the fixed equipment provided by the landlord. the onus is on the tenant to provide the landlord with a list of improvements which they believe to be eligible for the amnesty. tenants with secure tenancies, limited duration tenancies and short limited duration tenancies can apply. Works that are considered to be an improvement should meet the requirements detailed in Schedule 5 of the 1991 Agricultural Holdings (Scotland) Act. this encompasses a wide range of works from extending existing buildings to field drainage schemes. the improvements must also have been completed before the start of the amnesty period.
there are several grounds for a landlord to object to improvements being included. these include improvements the tenant has carried out which the landlord had originally objected to and improvements that have been undertaken in a way considerably different to that which was notified. there appears to be a grey area concerning the eligibility of improvements where there has been a break in the lease or the lease has been renewed. if problems of this kind arise, legal advice should be sought. the tenant Farming Commissioner’s guidance note recommends that both parties should meet on site to review the list and agree which improvements are eligible for compensation. if there is uncertainty over the validity of an
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the onus is on the tenant to provide the landlord with a list of improvements which they believe to be eligible. improvement, the parties should put forward evidence to support their case. if no evidence is available the item will, by default, be classed as the landlord’s fixed equipment. Once the list is finalised an ‘amnesty agreement’ can be drawn up. it is likely that the parties involved may have changed by the time the amnesty agreement is needed for way-go negotiations so it is critical that the agreement goes into some detail to allow improvements to be clearly identified in the future. Sound reasoning as to why the improvement should qualify for compensation at way-go should also be included. the process which should be followed by both landlord and tenant is detailed in the code of practice published by the Scottish Land Commission. to highlight recent experience and the issues which have arisen, the commission has published supplementary guidance. Both documents can be found on landcommission.gov.scot/.
claire.wilson@galbraithgroup.com 01556 505 009
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Cottage industry: Making a success of holiday lettings Hard work – and a loan from the Agrticultural Mortgage Corporation – have added a profitable new dimension to a family-owned estate in Wigtownshire. Sheena Ramsay reports.
THe many changes in the agricultural sector in recent years mean that simply farming the land is in many cases not enough to bring in adequate income to support a family or maintain the land. Some landowners are being forced to diversify to secure a future for their business. the Agricultural Mortgage Corporation (AMC) has been working alongside farmers and landowners, offering them the help and financial support they need to branch out into something new which will work in conjunction with their existing farming practice, and bring in much-needed income. Corsewall estate in Wigtownshire, which has been in the Carrick-Buchanan family since 1820, is very much a success story when it comes to diversification. Located near Kirkcolm, on the northern tip of the rhins of Galloway Peninsula, in Western Galloway, the estate is now run by Angus and Kate CarrickBuchanan. together they work hard to increase estate income through various projects. Corsewall estate, which was formerly made up of seven separate farms within the estate, has now been reconfigured to offer two tenanted farming businesses which focus on beef and arable production. there are also extensive acres of woodland and gardens. in 2012 Angus and Kate began letting luxury fourstar self-catering holiday accommodation using some of the cottages on the estate. they now have a portfolio of five holiday properties including Garden Cottage, in the west wing of Corsewall House, Stables Cottage and High Clachan Farmhouse, which were both empty and run-down. Cedar Lodge in Portpatrick and the most recent addition, Home Farm Cottage, complete the portfolio which takes advantage of beautiful surroundings where wildlife is in abundance and many walks can be enjoyed through the woodland and estate gardens. Galbraith agent robert taylor helped Angus and Kate to secure funding through AMC without which they would not have embarked on the restoration of Home Farm Cottage. Angus explains: “For us it’s all about the diversification of income streams and how you
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secure investment to establish viable estate businesses. regular banks have a different offering to AMC. AMC is straightforward to deal with and provides long term certainty and security at competitive rates. “Whilst we continue to work with our regular bank provider, AMC provides an alternative source of funding and via Galbraith we approached them successfully to fund the refurbishment of Home Farm Cottage. “AMC together with our regular bank have helped Corsewall estate to diversify into four distinct income streams, namely farming, renewables, holiday accommodation and commercial property.” the most recent diversification to holiday accomodation has generated additional employment to the estate in the form of builders, electricians and plumbers, as well as a dedicated local team working on a regular basis to carry out maintenance, cleaning of the cottages and gardening, ensuring the cottages and surrounding area remain in great condition for years to come. Angus and Kate are very proud of the cottages they let. they add many personal touches - Kate’s homemade brownies on arrival are a favourite amongst guests, who also receive freshly made bread, butter, local jam and milk, as well as tea and coffee. Using local produce where possible is very important to Angus and Kate. Dogs are welcome in all cottages and dog biscuits produced locally are a much-loved treat. Angus and Kate’s own dogs, Stuay and Sybil, working cocker spaniels, can often be seen in the grounds and are very much part of the Corsewall team. Other properties on the estate, not suitable for holiday accommodation, are used as residential lets, providing another source of income, although the revenue from long term lets does not compare to the weekly income received from the holiday accommodation, especially in peak season. Galbraith recently worked with Angus and Kate to market and secure a tenant for a semi-detached cottage on the estate.
AN AMC LOAN... NOT JuST FOR FARMING AMC were delighted to support Angus and Kate in their business and recognised the strengths in the estate through diversification. Many people think that AMC only lend for purely agricultural purposes, but a growing number of customers are seeing opportunities outwith farming and AMC sees diversification as complementary to any core farming business.
Angus Carrick-Buchanan with his dogs at home Farm Cottage, the latest addition to the Corsewall estate’s holiday letting portfolio. Below: A bedroom and the kitchen at home Farm Cottage.
the beauty of AMC loans is their lend and leave policy which allows the customer to carry on with improving revenue streams in full knowledge of the long-term support offered by AMC. Loans for up to 30 years can be taken and this can be for a mixture of requirements such as restructuring existing bank debt, providing working capital, paying out a partner share or simply improving the general fabric of the farmhouse and buildings.
the new Private residential tenancy legislation (Prt) gives tenants more rights, with the grounds for repossession by a landlord being tightened and the notice period required to be given by a tenant now shortened to 28 days. All these factors add appeal to the holiday accomodation business. nevertheless, a good tenant bringing in a steady income and taking responsibility for the council tax and utilities still makes long-term letting a secure and viable option.
and the warmer climate influenced by the Gulf Stream brings visitors to the area all year round, with many returning year after year.
the success of a holiday accommodation business very much depends on the location. the rhins of Galloway has great natural beauty,
www.corsewallestate.com 01776 853567 enquiries@corsewallestate.com
Angus and Kate anticipate that the number of holiday lettings will double in the next five to 10 years.
sheena.ramsay@galbraithgroup.com 07468 049 387
Whilst land purchase remains a major part of AMC’s business the ability to derive income from land continually becomes challenging as costs rise and lower food prices become the norm. Diversifying into tourism, as Angus has done, can really change the dynamics of an estate or farm for the better.
Robert Taylor robert.taylor@galbraithgroup.com 07585 901 847
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The summer we were waiting for, but was everyone happy? Mungo Ingleby assesses the sporting impact of Scotland’s scorching weather.
This year the countryside was slow to burst into life and snow was lying at a low level until easter. Winter then switched swiftly to summer and the sun shone – and shone and shone. Scotland basked in a Mediterranean summer and by the end of July much of the country had only received one tenth of its average rainfall. While this was wonderful for sun lovers it was much, much harder for Scotland’s rivers and hills. the first to be affected were the fishermen as water levels in Scotland’s
Reconciling sporting rates with vicarious liability Deirdre Stewart reports on two conflicting challenges facing the country sports community.
small, medium and finally larger rivers dropped away. Some registered their lowest ever recorded levels and fishing ground to a halt. Fish were either stuck on the tide or were in survival mode in the deeper pools. it is nigh on impossible to form an opinion on the strength of the runs with such poor conditions but it does appear that some rivers had significantly more fish waiting to run than others. As i write, many rivers are in their first spate for four months and there have been some staggering red letter days, but equally other rivers are reported as eerily quiet. Demand for fishing in 2019 still looks strong, particularly in the north. it was the first summer drought for some time and most fishers take a three to five-
one may be accused of having two left feet while trying to stay in step with sporting rates and vicarious liability. the Wildlife and natural environment (Scotland) Act 2011 introduced the concept of vicarious liability making certain parties vicariously liable for offences committed by another person. this is something that we actively help our clients to mitigate through due diligence practices. those vulnerable to prosecution under vicarious liability include the landowner, occupier/shooting tenant, farmer (undertaking predator control), factor, keepering staff, shoot syndicate member, and those employing the services of keepering or pest control services. in order to defend him or herself, the
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year view on any week and will anticipate encountering both good conditions and bad. What is clear, however, is that three-day and weekly tenants are the lifeblood of many remote rivers and estates, so should be cherished. Owners should also give consideration to the fact that if they offer both day rods and weekly lets they are offering two different products. One has no knowledge of the conditions and will appear come what may. the other will only book if conditions are fair and fish are being caught. On the high ground Scotland’s, and indeed much of northern england’s, grouse stocks also suffered in the heat. it would appear that the birds came out of the winter in poor condition, they
accused must be able to demonstrate that either they did not know the crime was being committed, or took all reasonable steps while exercising due diligence to prevent it being committed. Doing nothing will not protect you – there is no room for complacency, as this in itself shows a failure to carry out due diligence and therefore being vicariously liable. Part of those due diligence practices has been the requirement to formalise, review and update agreements and lease structures, with all involved including tenants and syndicates. Where multiple parties are involved, such as landowner, syndicate and keepering staff, it is recommended that a clear system be in place defining the responsibilities and duties of each party involved. this includes any contractual agreement such as leases. in the absence of a clear chain of command
nested a little later and by the time the chicks had hatched the hill was drying quickly and the sun was firmly established. insect life was a fraction of what would be expected in a normal year and food and then water became real problems. Adult birds had to move, and in many cases broods simply failed. Unusually the picture across Scotland was relatively uniform, and sadly the majority of moors took the decision to cancel much of their programme. this has caused significant financial repercussions and the various moorland groups have done fantastic work highlighting the breadth of loss that Scotland’s rural economy has suffered as a result of the cancellations. Hoteliers, gamekeepers, beaters, restaurants, owners, agents and the guns themselves are all in the same boat and it illustrates how valuable the continued investment in grouse moors is for rural communities. What is brilliant to witness is the longterm commitment to Scotland’s grouse. they are truly wild and all concerned realise that there will always be highs and lows. People are already looking to
the landowner remains vulnerable to vicarious liability, even from those not under his or her direct control. Hence there has developed a real need for concise lease agreements for differing shoot structures in taking cognisance of vicarious liability. Simultaneously, the introduction of shootings and deer forests to the valuation roll has levied rates upon multiple shooting rights. this too, is an area in which we have had a great deal of involvement, and we await appeal hearings for sporting rates for clients across Scotland. entries have been made on the valuation roll for multiple shooting rights where for example the landowner has granted stalking rights to one party
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Sadly the majority of moors took the decision to cancel much of their programme. this has caused significant financial repercussions.
new, demand now also encompasses hind stalking. Prices are being driven upward, but again it is important to make a distinction between single-day stalking and week-long lets. What are the principle goals of the estate? to lease the lodge or to let the stalking? Of course one follows the other but it is often best if a lodge week is treated as an overall package, taking into account the wider benefits that such a booking brings, rather than the sum of the sporting constituents.
2019 and whilst driven grouse remain the priority for many owners there is a significant market in walked-up days. For many the chance to shoot just one grouse will make a trip to Scotland and there is significant potential for owners prepared to be creative and exploit this trend.
it has been a tough year for Scottish sport but the future is bright. Scotland has a varied and accessible sporting offering, beautiful terrain and the pursuits are steeped in tradition. Many of the British participants will have fished and shot from a very young age, but as inbound tourism to Scotland increases so too does the opportunity for sporting pursuits and experiences to win new converts.
the late winter saw significant mortality among Scotland’s deer herd and this combined with ever increasing demand from european hunters has put real pressure on availability. the traditional Scottish stalking experience is a powerful draw which shows no sign of diminishing. Whilst the trend is not
exclusively for deer stalking and another party to shoot pheasants. Assessors have viewed these as different, exclusive shooting rights, with each party receiving a demand for sporting rates. in cases where the landowner has reserved the rights within the lease, to shoot for one or two days for example, this too has been considered a separate right to shoot, and also been levied sporting rates. the fear is that this system of rating will discourage the practices required for satisfactory due diligence by dissuading those involved from formalising rights and responsibilities in the exercising of shooting rights, where leases are effectively attracting an entry on the valuation roll, and a bill for sporting rates. to twist the knife further, the rates
mungo.ingleby@galbraithgroup.com 01738 456079
levied upon a reservation in a lease could almost outweigh the value of the sport reserved therein. ideally, the rates applied should be proportionate to the reservation withheld. So far, a 50% reduction may only be applied to a tenant’s entry, where the reservation is significantly restricted. So can we keep to the music? Or are people side-stepping these issues? i am struggling to find a common rhythm. From a management point of view, the aspects of vicarious liability and sporting rates can be hard to reconcile, but not impossible and we have professional experts who can help to navigate the way for a satisfactory outcome for all involved.
deirdre.stewart@galbraithgroup.com 07899 877 726
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STudENT PLACEMENTS
A summer of surveying eAcH summer, our offices open their doors to placement students who have successfully completed the Galbraith work experience application process. this year, we welcomed eight placement students across six of our 11 offices. Placements typically last four weeks during the university summer holidays, but some of our 2018 students were on board to assist the rural and energy divisions for as many as seven weeks. Our placements offer the opportunity for site visits, the chance to attend client meetings, write reports and conduct research. they also provide a valuable insight into Galbraith and the broad spectrum of property-related services we offer. Here, rose nash and Mairi Macdonald, both 2018 summer placement students, reflect on their time with Galbraith.
Rose nash While studying rural Business Management at SrUC in edinburgh, the importance of work experience was made clear to us. the class has attended many surveying and land agency related talks in which Galbraith had a large presence. After listening to what the firm could offer, i decided to apply for a summer placement. i was selected for a short interview before receiving a phone call informing me that i had been chosen for a placement in the Castle Douglas office alongside one of my classmates. During my time in the office i carried out a large variety of tasks and met a wide range of clients and colleagues. in my first week i attended the Galbrath marquee at the royal Highland Show and represented the firm with my own branded name badge and gilet. this was a good opportunity to network and build my confidence, as i was communicating with staff members at all levels as well as clients. My time in the Galbraith office was split between the rural and residential business streams – helping to gain a full overview of the business and operations of both teams. While working with the residential team i accompanied staff on client visits to carry out market appraisals, drew up floor plans and assisted with writing sales particulars. i enjoyed gaining an understanding of the full process of putting a property on the market.
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the experience has confirmed that after my final year at university the riCS pathway is the one for me.
A key part of my responsibility in the residential team was answering phone calls and dealing with day-to-day customer enquiries. this included arranging viewings, negotiating offers and organising meetings. i was also made the first point of contact for the business and was in charge of the front desk for a period of time. While a lot of pressure came with this role it was a great way to gain a deeper insight into how both a company and an office runs. With the rural team a lot of my time was spent helping with farm valuations. One of the highlights was travelling to Cumbria to carry out a valuation of a large dairy unit. this was a process i was able to follow from start to finish which made clear the skills and knowledge required to carry out a valuation efficiently. Page 14 | Rural matters | Winter 2018/19 | galbraithgroup.com
My colleagues also asked me to proof-read their valuation reports, which was a simple way for me to learn how to structure these for the future. i also became familiar with drawing up plans and the firm’s GiS mapping system, all of which will help me in my future career. estate management was also dealt with by the rural team and a proportion of my time was spent on visits to the estates managed by Galbraith shadowing the role of a factor. On my final day i helped with a landlord and tenancy improvement project on one of the tenanted farms, reporting on the condition of fields, fences and gates. Overall, my seven-week placement at Galbraith was very interesting and enjoyable. it highlighted that no two days are the same and that there is a good mix between being in the office and out on site visits. i really appreciate the patience all the staff in the Castle Douglas office showed in taking the time to teach me the key information required to complete the job successfully. the experience has confirmed that after my final year at university the riCS pathway is the one for me.
mairi macdonald As a third-year student studying rural Business Management at SrUC, edinburgh i joined the Galbraith Stirling office for my summer internship taking on a variety of tasks which allowed me to gain a fuller experience of what being part of the rural team involves. i helped with several valuations, an experience
Keeping on top of property expenditure James taylor explains the value of planned preventative maintenance. owning and maintaining let property can be an expensive business, so understanding the condition of your property and the life expectancy of its structural elements can be vital in managing cash-flow and minimising unforeseen and unnecessary expenditure. the most efficient method of maintaining a property’s condition is to have a planned and proactive programme of maintenance. For a residential landlord, putting a planned preventative maintenance (PPM) schedule in place for a property or property portfolio will help you understand the building’s condition and ensure each property meets the required repairing and energy efficiency standards.
which i enjoyed as as i was able to gain first-hand insight into how these are carried out. As well as valuation inspections i was shown how to use upto-date technology to provide accurate measurements for reports. Working with robert taylor, the partner in charge of AMC agency, was a huge part of my time at Galbraith and it was extremely interesting to see the process from application to receiving a loan offer for a client. Coming from a farming background allowed me to connect well with the various farmers during my visits. i gained an understanding of how important it is to listen to clients and build up a picture of what they want to achieve through investment. A first-hand understanding of the industry is key to this. Galbraith brings a large number of farms to the market, and i was lucky enough to work with the farm sales team. i was able to assist in completing farm plans and maps for various sales thanks to the Geographic information Service (GiS) training offered to me by Galbraith. My internship at Galbraith was valuable and thoroughly enjoyable, helping me to decide a career in this sector is the path i would love to follow. At Galbraith, we're always keen to hear from talented, dedicated and ambitious students who want to break into and make their mark in the industry. For more information, visit www.galbraithgroup.com/work-experience or contact your nearest Galbraith office.
Summer placement students Rose Nash, left, and Mairi Macdonald.
this will identify when certain issues are likely to arise and the associated costs over a defined period of time, typically 15-20 years. With this information to hand you are able to budget more accurately and prepare a schedule of repairs or improvements. this can be tailored to suit your cashflow and occupancy. By being proactive in your maintenance, the standard of the property is maintained and building elements achieve their intended life expectancy. this helps to retain tenants, avoid costly tenancy turnovers and prevent premature expenditure for replacement of elements of the building such as windows, gutters, and roof tiles. As well as helping to maintain a building, a PPM can inform you about likely expenditure on a building over a period of time. this can help you to analyse how a building is performing financially against market rents and income. You can then weigh up if the disposal of certain properties to support investment and improvement in better quality and more profitable property will provide overall better returns or more manageable maintenance budgets. this is most important where market rents are likely to be low, making the recovery of major or even minor expenditure virtually impossible in the cycle of a tenancy or ownership of a building. if the retention of property is important, perhaps for tied staff or security purposes, understanding the condition and planning for succession at retirement or changeover is beneficial. By maintaining the property you are able to market properties in good condition, helping to attract the best job applicants or achieve the best possible rents in a demanding and increasingly challenging letting environment. Armed with information on expenditure and planned maintenance you can programme refurbishment when the property becomes vacant and ensure that you are offering something to the market that is in good order and complies with relevant legislation.
james.taylor@galbraithgroup.com 01786 434 610
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A mansion that pays its way James Bowie reports from Gargunnock in Stirlingshire. GARGUnnock estate sits in the heart of Stirlingshire and at first glance is a traditional rural estate; mansion house, policies, and farmland. However, Gargunnock has been gradually and successfully diversifying over the years to turn itself into a forward-thinking and sustainable rural business. When the estate was put into trust, the first decision to be made concerned the mansion, Gargunnock House. it was decided that the house had to support itself, thus a relationship with Landmark trust was born and the house was and is now let to holidaymakers as a part of Landmark’s wider portfolio offering. Landmark trust is a charity that has a specific interest in sustaining and supporting historical buildings in the UK and also in italy, France, and Belgium. Galbraith works closely with Landmark to ensure the house is kept in great condition and is always fit and ready to host its guests. the house comfortably sleeps 16, and under the vision of both the trustees and Landmark, its character and historical features have been retained and enhanced. this approach has paid dividends with the average occupancy
rate over the past three years being 81%. the house now not only supports itself but also the wider estate, and it provides employment for the local community, bringing income to the area from the holidaymakers who come from all over the world to enjoy the house. the house is let through the Landmark website, with changeover days being Fridays and Mondays. A strong dedicated team at Gargunnock deal with the preparation of the house for guests and any special requests that may arise. As the managing agent, Galbraith ensures that the fabric and condition of the house is kept to a good standard. We are continually reviewing and planning repairs and maintenance to avoid any larger issues arising, the main challenge being finding a time when the house is empty. in recent years Gargunnock estate has been able to rebuild the historic walled garden, adding to the enjoyment of both holidaymakers and the local community, the garden being frequently open to the public. Galbraith also work closely with Gargunnock estate on the farm side, with a recent focus on reviewing lease structuring for the farming land.
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Working with Gargunnock’s tenants, we have introduced modern tenancy frameworks such as Limited Duration tenancies (LSts), grazing rights, and Short Limited Duration tenancies (SLSts). Gargunnock has seen some exciting filming take place on the estate in the past couple of years, and with the aid of Galbraith this is another diversification strategy which promotes and benefits the wider estate. james.bowie@galbraithgroup.com 01786 434 605
landmarktrust.org.uk/search-andbook/properties/gargunnock-house-7761
Is this the beginning of the end for ash? Paul Schofield fears another disaster for Britain’s native trees. SeT within the urban sprawl of Southend-onsea, essex, Southchurch Hall is a small parkland with a Tudor mansion house at its centre surrounded by mature trees and duck ponds. i remember going there for picnics as a child in the 1970s and sitting in the shade of huge trees with big red ‘X’s painted on their trunks. And then one day the trees were gone. the trees were english elms – Ulmus procera – and this was the height of the Dutch elm disease epidemic. today, there is no trace of the elms that stood at Southchurch Hall or millions of others that were once so integral to the landscape. By the 1990s, an estimated 25 million elms had died, some 85% of the estimated UK population. the recent arrival of ash dieback disease brings fears that we are witnessing the gradual disappearance of another native hardwood from the countryside. Ash dieback disease was first recorded in Britain in 2012 and is now found in most parts of the UK except northern Scotland. Ash dieback is caused by a fungus, Hymenoscyphus fraxineus, which causes leaf loss and crown dieback in affected trees. the disease is usually fatal, either directly or indirectly by weakening the tree to the extent that it is more likely to succumb to other pests and diseases, most notably honey fungus, Armillaria. there are an estimated 10.7 million ash trees in Scotland alone. in addition to its heritage value and importance in the landscape, the potential loss of ash as a timber producing tree is serious because it establishes easily, grows fast and straight and is resistant to grey squirrel damage, all unique properties that cannot be easily replaced. it is also an important component in native woodland on more fertile soils and its loss would compound the disappearance of elm from similar sites. no native species of large stature can match the ability of ash to colonize gaps in the canopy. Gargunnock house, with its imposing parkland setting and impressive dining room, has become a successful holiday let for the estate and the Landmark trust.
However, there are signs of hope. Some ash trees appear to tolerate infection and scientists are studying the genetic factors behind this so that tolerant ash trees can be bred for the future. in the meantime, the impact of H. fraxineus is likely to develop slowly as the disease advances from killing twigs and branches to extensive crown dieback and tree death in the longer term. Based on experience in europe, particularly the recent spread of the disease in Denmark, current DeFrA guidance states the following: • trees cannot recover from infection but larger trees can survive infection for a considerable time and some might not die • trees less than 10 years of age are likely to die from H. fraxineus in two to 10 years • trees less than 40 years old will die in three to five years if also infected with honey fungus
and more rapidly if the tree is already debilitated • For mature trees more than 40 years old, there is no direct evidence of tree deaths solely from H. fraxineus to date, but there is so far little comprehensive survey data from europe on which to base firm conclusions. Mature elms survive here and there in small, isolated pockets but are still uncommon. When i do encounter one – most recently at the edinburgh Academy – i see them so rarely that at first i’m not sure what i’m looking at. Hopefully the same won’t be true of ash 25 years from now.
paul.schofield@galbraithgroup.com 01738 456 064
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Ready for happy campers
Rural valuation: A peek behind Putting a price on a property is only part of the story when a lender asks for a valuation, as David Corrie explains. i RecenTly attended a seminar provided by a commercial bank involved in lending to large farms and estates. As a rural surveyor in a room of landowners, i soon realised that while the lending process was clear in their minds, the process and requirements of valuation were not. there was some discussion about the mystery surrounding this and it soon became apparent that it was an area that people took for granted or it was an afterthought to the request for finance. Usually the first that the rural surveyor knows of a requirement to provide a valuation for lending is a request from the bank which is providing the loan. At this stage, depending on the lender, we may be provided with only sparse information which may not include the customer’s name or address but an indication of the location, size, and type of land and property required to be valued. this can be the first hurdle for the surveyor as in order to quote accurately we require detailed information on the size and number of dwellings, area and type of ground, as well as any unusual
factors such as telecoms, renewables, or sporting rights. the bank does not merely ask the surveyor for a figure in the valuations, although this is one of the most important elements; most large commercial banks now send terms of business with their requirements and these can run to 30 pages detailing the required content of the valuation report. the report, with appendices, can easily run to 100 pages and more. the days of rural surveyors writing a one-page letter to the bank to say that the subject is worth ‘one million pounds’ are long gone. the possible scope of inspection and size of report is a crucial consideration in the valuer’s mind when quoting for the work. the time and labour involved in producing a report that meets the lender’s requirements can often run into days or even weeks, so valuation quotes often run into the hundreds and sometimes thousands of pounds. Once a valuer has been chosen and instructed there is usually a timescale for the production of the report, ranging from 10 days to a month, so the valuer
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will book a visit to the property as soon as feasible. the inspection normally lasts at least half a day and includes an internal inspection of any dwellings, measurement of buildings and an inspection of as much of the land holding as physically possible to understand the nature of the security being offered. in the case of farms and estates, it is important for the valuer to prepare for the inspection. We often find it prudent to prepare a schedule of land which may be gleaned from sales particulars or the land holder’s iACS map. this allows the valuer to inspect and report on each field parcel individually considering land use, type, grade and of course condition and value. if there are dwellings, the inspection will consider their type, age and condition, as well as the layout and facilities. the valuer is not looking for a show home, but i always advise landowners to ensure that their maintenance is up to date and as far as possible the property is tidy inside and out, since we are required to take photographs. the current and potential land use is one of the interesting factors revealed by an inspection which may not have been apparent on any sales particulars or iACS map. the valuation considers the
A campsite can be a relatively low-cost way to diversify a farming business, as Bruce Gillan reports. UnceRTAinTy over the future of farm subsidies has increased in recent years, and the likelihood of subsidies remaining at current rates post-Brexit is questionable. the only certainty we have is increased paperwork and a greater focus on environmental incentives. Landowners and land managers, as ever, need to look at ways of spreading risk, not relying on a single revenue source and ultimately aiming for viability without subsidy. i have firsthand experience of this sort of diversification as my father runs a certified five-van campsite between St Andrews and Cupar. the main reason for diversifying in this way was the relatively low investment cost, the fairly quick return on investment and, in our case, the fact that planning permission was not required as it falls under permitted development, being a site certified by the Caravan Club although with restrictions on lengths of stay.
there is generally support from local councils for this type of agricultural diversification, particularly in locations where tourism plays a key role in the local economy. For us, the key requirements to set up the campsite were: • Moderate to high levels of tourism in the locality • 0.5 acres plus of available ground • Water supply • electric hook-up points • Chemical waste disposal point • Good access to a road suitable for motorhomes/caravans • Hardstanding for up to five bays • Area of grass for tents that is in reach of an electric hook-up point (i would not recommend tents if you don’t have a toilet and shower block) • Septic tank for chemical waste disposal points that is suitable to accommodate a shower and toilet block should the site be successful and we wish to add facilities to attract more business • A reliable ride-on lawnmower and strimmer – the grass will need to be cut on a weekly basis • Bays with a good view and spacious gaps between them. We charge between £15 and £30 a night
the curtain property as inspected at the date of valuation, but many lenders will ask about alternative uses so that they can protect themselves against changes of value over the lifetime of the loan. A current hot topic is ground suitable for planting which can uplift hill ground or rough grazing from a lower to a higher value if the necessary consents are obtained. in addition, whilst it is not pleasant to consider the bank having to step in and sell, the valuer is asked to look at the options for lotting parcels of land. Some of the more complicated valuations we have carried out for banks include a request to consider the potential for disposing of dwellings with or without some land. the valuer’s report should detail the entire story of the farm or estate in the context of its location, size, type, and land use. the bank also requires environmental searches, flood reports, whether it is likely there is any asbestos, the presence of invasive plants, made up ground which may be liable to subsidence and the risk from ground penetrating radon gas. in addition, the bank requires commentary on tenure, planning, alternative uses and development opportunities, access and
for a caravan, motorhome or large tent. With the above requirements met to a satisfactory standard and the marketing carried out correctly it would not be unreasonable for us to expect between 25 and 30% occupancy in the first year. the season tends to open on easter weekend and will close mid-October, with demand increasing during peak bank holiday summer weekends, school holidays and major local events. Demand for caravan and campsite holidays has risen sharply in recent years. if you are considering a caravan park on your farm you should contact your local council in the first instance for clarification on whether planning permission would be required. Certain permitted development rights apply particularly if you have a site certified by an organisation such as the Caravan Club, however in most other cases planning permission will be needed. We would be delighted to help you to secue the appropriate consents or to discuss other forms of diversification.
bruce.gillan@galbraithgroup.com 01786 434 615
“ highways, energy Performance Certificates, and the rateable values or council tax bands where appropriate. the valuer considers all these factors and then uses the key principles of valuation to provide a figure. this is based on a comparison with the sale of similar properties and may also use other methods such as cash-flow or depreciation to value specialist buildings or income streams. We are also asked to provide commentary on national and local market conditions. the bank will also seek an insurance reinstatement value to allow them to cross-reference with the landowner’s insurance schedule to ensure they are adequately covered in the event of a claim. Finally the valuer is required to comment on whether the property is suitable as a security and to provide a market value and market rent, the latter in case the bank has to take possession and rent out the property. in some cases these may be the only figures that the bank’s customer is interested in, but the full valuation report will be scrutinised by the relationship manager and the bank’s underwriters to assess if the holding is suitable for a loan on the terms proposed. if considering applying for security for lending, it is worth noting the following:
the time and labour involved in producing a report that meets the lender’s requirements can often run into days or even weeks.
1. Only provide as much security as required and do not include residential properties unless absolutely necessary. this will simplify the security process and keep residential dwellings in your tenure rather than handing control to the lender. 2. ensure that the holding is as wellmaintained, neat and tidy as possible for the valuer’s inspection. A trained valuer can see through the usual farm and estate flotsam and jetsam and a working family life so it need not be immaculate but it helps if the property looks cared for. 3. Be able to lay your hands on information for the valuer when required. Copies of title plans, tenancy agreements and planning permissions are often hidden in the depths of farm or solicitors offices. Having copies available will minimise delays.
david.corrie@galbraithgroup.com 01556 505 346
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