Agriculture and professional services magazine 2017

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A gr i c u l t u r e & Pro fes s io na l S ervic es

Agr i cul tu re & P ro f e ssi on a l Se rvi c e s

Meet the team

Deep roots allow strong growth Stags was established in 1874 and have recently acquired Ward & Chowen (est 1830) of Tavistock as our 21st office. Therefore, we have many years of experience, contacts and relationships to continue to build upon. We aim to ‘add value’ in our dealings with and for our clients. Whether this is via our Professional Services team, our Land Agents, Planning Consultants, Letting staff or Market and On Site Sales department, our driver is always the same. An array of our work is highlighted within. Please do contact us if you feel we can be of assistance.

Alex Rew FRICS FAAV Managing Partner Head of Professional Services 01884 235701 2

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Ag riculture & Pro fessio nal Ser vices

Landlord & Tenant ADDING creating a ‘win-win’ scenario for both landlord and tenant The relationship between a tenant and a landlord is, by its very nature, symbiotic: in simple terms, when the tenant is doing well, the landlord is more likely to have his rent paid. So often it is in the landlord’s own interest to encourage his tenant’s success. A client of mine is the tenant of a 300 acre farm in Devon, with approximately 20 years remaining of his tenancy. The farm includes a range of traditional buildings, one of which was in very poor condition and defined as ‘redundant’ in the tenancy agreement. In this context, redundant meant that neither the landlord nor the tenant was under any duty to repair the building and no rent was payable.

Key reads in this edition

A friend of the tenant approached him and asked if he could use a building on the farm as a photographic studio. My client was keen to help, but as is common in let properties, he was conscious that his tenancy a) did not permit him to sublet and b) required the farm and buildings to be used solely for agricultural purposes. He also knew that all the ‘sound’ buildings on the farm were being used for his farming business. The solution, he believed, lay in the redundant building and he came to me seeking advice as to how he might be able to take his proposition forward.

I suggested to my client that he got a quote for the renovation costs of the redundant building, as well as an idea of the potential rental value once complete. On reviewing these figures, there appeared to be a reasonable business case showing that the expenditure was justified by the projected rental income. On the back of these figures, we felt that we might be able to persuade the landlord to reclassify the building and agree with the tenant that it would no longer be redundant if the tenant were to invest his money in its renovation. Our attention then turned to the tenancy agreement, particularly the ban on subletting and any non-agricultural use. A landlord would usually require a proportion of the subletting rent or alternative income, in return for varying the terms of the agreement in favour of the tenant. In this case, however, because the tenant was to make the investment in the building we agreed that no additional rent was to be charged by the landlord until the tenant had recovered all his costs and interest from the rental income. Once the investment had been recovered (over a period that was projected to be approximately 4 years) the landlord would receive 20% of the rental income from the building.

Mark Neason BSc MRICS FAAV 01823 662822 Both parties were delighted with the result. The landlord got a redundant and worthless building renovated, as well as an enhanced rental income from the farm after 4 years. In general terms, he also gained a more resilient and viable agricultural tenant. The tenant, meanwhile, made an investment which, after the 4 year payback period, would return approximately 20% for 16 years. He also made his photographer friend very happy!

Mark has helped us on several occasions with various issues relating to our farm tenancy. We found him to be

friendly, easy to talk to, knowledgeable, thorough and efficient. He communicated well by bringing professional jargon to a lay-

man’s level, but was also open to our ideas and suggestions. We achieved all our objectives! Should the need arise we would return to Mark for advice in the future, without hesitation.

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Mr & Mrs F, Somerset


Agr i cul tu re & P ro f e ssi on a l Se rvi c e s

Planning ADDING VALUE...spotting opportunities for development, large or small, or preferably both!

Alister King Smith PGDip MRICS 01392 439046

Looking at opportunities to add value to a client’s property is at the heart of what I do, all day, every day. I was asked by a client to review the planning permissions on some land and buildings in Mid Devon that were left over from a larger farm that had been split up a few years earlier. My appraisal quickly identified that the traditional farm buildings were suitable for conversion to residential use. I also spotted that some of the land, which was right on the edge of the village, could be suitable for a small residential development. With the opportunities set out, I formulated a strategy to look at how the uplift in value might best be secured. With policy supporting the conversion of the traditional barns, I recommended that we seek permission for the conversions first and then with these approved (and ideally a sale secured) part of the funds could then be reinvested in looking to secure the larger ‘village’ development. The barn conversion application was relatively straightforward, as they were in line with policy and not listed. It was important at this stage to consider a sympathetic design, which I did by working closely with both the client and project architect. The client had hoped to introduce dormer windows but I advised that these would not be supported by the Council and would likely not increase value. Apart from having to undertake a more extensive programme of bat surveys than first envisaged, the conversion of the two barns was approved promptly. The local office of Stags was then instructed to put the barns on the market and both were quickly sold, generating approximately £380,000 for my client.

to be withdrawn, albeit temporarily. Following a further review of the situation, a new pedestrian access was proposed and the application resubmitted. Planning consent was granted swiftly thereafter, with the site once again being listed with Stags for a guide of £450,000. In this case, the whole programme of works took some three years to achieve. There will not always be the luxury of this length of time, nor indeed the same level of opportunity, in every case. However, I am often able to identify uplift strategies that can be achieved more quickly. What is clear is that thinking ahead will give the greatest flexibility, and I would always recommend people seek professional advice early on.

In the final quarter of 2016 there were


applications for permitted development rights (PDR),down 9% compared to the same period of 2015.


of these were approved.

With funds secured, my client felt comfortable to pursue the residential development application for the ‘village’ site. After careful consideration and community consultation, an outline application for 5 dwellings was prepared and submitted. Whilst highway matters had been considered in advance, further consideration had to be given to a pedestrian access scheme and the application had


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Ag riculture & Pro fessio n al Ser vices

Compulsory Purchase & Compensation ADDING VALUE...helping you navigate the red tape to ensure you receive just compensation

This is where the Stags Professional Services team can offer assistance. From the owner of a residential property that is faced with a new dual carriageway outside his front door, to a farmer whose farm will be crossed by a pipeline, Stags has a wealth of knowledge and experience to assist clients. The key legislation is the Land Compensation Act which offers three key heads of claim. These include the value of the land that has been taken, the effect this has on the remainder and to remunerate against other disturbance caused by the scheme. Where there is no land taken, but there are significant physical impacts from a scheme, compensation still may be due, referred to as a ‘Part 1 claim’. I am currently working on a number of Part 1 claims relating to the South Devon Link Road and I am acting for property owners who now look out on a dual carriageway and have experienced an increase in dust, noise, vibration, fumes and artificial light. In order to calculate what might be due to these clients, I looked at the ‘market value’ of the properties affected based on a ‘no scheme world’. This forms the basis from which compensation can be calculated and, depending on the severity

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of the effects, a figure of between 2% and 10% reduction in value can be agreed. The skill – and indeed where I can really add value - comes in understanding what influences property values and negotiating accordingly. It should be noted that there is no such thing as a quick fix. The first date that a Part 1 claim can be submitted is one year after the new road (or scheme) has opened. In the case of the Kingkerswell Bypass it was important to gather evidence from the date the road opened, as these values are used calculating compensation and form part of the evidence used in the negotiation process. This is a unique way of calculating compensation which is particular to residential dwellings and the Part 1 process. In other cases I have been involved in it is often much quicker. Last year I acted for a landowner whose neighbour obtained planning consent for a solar park. In order to connect to the nearest substation, however, cables were required to be laid under one of my client’s pasture fields. In this case, for a stretch of approximately 100m, I negotiated a payment of more than £35,000. On top of this the solar company agreed to pay for all professional fees.

Lydia Cox MRICS FAAV 01884 235701

Lydia’s negotiation

skills secured us a sizeable cheque from the solar company. We would not hesitate to recommend.

Mr & Mrs B, Devon

A thorough understanding of the legislation behind compulsory purchase powers and compensation is essential to ensure a client can claim all that is due to them. However, the relevant red tape runs to hundreds of pages and can be extremely daunting for the layman.


A gr i cul tu re & P ro f e ssi on a l Se rvi c e s

Estate Management & Contract Services ADDING VALUE... by identifying opportunities for grant funding

Jennifer Cox MRICS FAAV 01823 653424

Recently a client responded to an article that Stags had published in the local press regarding the LEADER scheme, to enquire about opportunities to fund the expansion of his farm diversification business. I visited the farm, where the clients had established a successful wedding venue to run alongside their agricultural operations. With the owners’ input, I


prepared an outline application to assess whether the proposed conversion of some traditional farm buildings to accommodation for wedding guests would be eligible for funding. The initial reaction from the scheme providers was positive and I was retained to prepare the full application. In order for a LEADER application to be in with a chance of being successful, it is vital that projects are thoroughly planned and researched. The second stage of the grant application required a significant amount of detail including supporting cashflows, business plan and market research. We were also required to clearly identify the economic benefits that would result from the grant, as well as any other positive impacts on the community. Together, my clients and I put forward a good case for the wedding guest accommodation on the basis that it would generate new employment and bring local economic benefits. As a result of the application, my client was awarded a large grant which has enabled him to undertake the conversion of the barns and he reports that this has enabled his business to grow, securing the future of the whole farm.

underway, what the UK government has up its sleeve in regards to rural schemes in future years remains unknown. However, you can be sure that the Stags Professional Services team and I will keep appraised of the changes as they happen, to ensure that we can offer considered and well-timed advice.

I am delighted! Jenny’s

advice and efficient help with

Stags have always sought to actively promote opportunities for capital grant funding for farming and farm diversification projects. One such scheme is the LEADER project (an acronym derived for the French Liaison Entre Actions de Développement de l’Économie Rurale) which is designed to help fund projects that create jobs and generate economic activity in rural areas. The LEADER grant forms part of the broader Rural Development Programme for England (RDPE) whose remit is to make England’s agriculture and forestry sectors more competitive, to improve the quality of life in rural areas and to diversify rural economies. In short, LEADER provides European grant funding for business development and new start-ups, with applications made over two stages. Under the terms of the scheme, LEADER grants will pay up to 40% of the eligible costs of a project, up to a maximum grant of £100,000.

our grant application has saved us thousands.

Mr J, Somerset

Of course with the countdown to Brexit now

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Ag riculture & Pro fessio nal Ser vices

Red Book Valuation ADDING VALUE...why paying for a valuation pays dividends over a free market appraisal Most property owners will, at some stage in their lives, find themselves in need of a formal valuation, whether it be for Inheritance or Capital Gains Tax purposes or for loan security reasons. What is often not appreciated is that in these instances a market appraisal by an Estate Agent is simply not sufficient. Unlike market appraisals, which are designed to give free advice on the value at which a property might be marketed should it be put up for sale,

formal valuations can only be carried out by RICS registered valuers, following a strict code of practice, as set out in the RICS Red Book. As such they always come with a fee. While no one likes having to pay for something as mundane as a valuation, what should be appreciated is that having an up to date formal valuation can be extremely financially worthwhile, often helping to save significant sums of money, be it tax bills or in avoiding a lengthy and expensive legal

dispute. I often get asked by clients for a ‘quick verbal valuation’ or ‘a figure on Stags headed paper’, on the basis that they don’t wish to incur fees. What I then explain to them is that free market appraisals are not accountable: they cannot be used for tax purposes nor for settling a dispute in court, they are simply a guide price for marketing purposes and are often influenced by factors not considered by formal valuations. Like the Estate Agent’s desire to flatter the owner’s ego and get the sales instruction!

Toby Perry MSc MRICS 01392 439046

According to the RICS Red Book, a formal valuation may be required for any of the following purposes: n

Inheritance Tax (to assist with probate)


Capital Gains Tax (to assist with calculating the gain following a disposal of a property)


Loan Security (to assist in enabling particular assets to be used as collateral with lenders)


Matrimonial Disputes (settling a dispute in court. They are simply to enable the division of assets)


Partnership dissolution (to enable the division of assets)


Expert Witness (to provide impartial advice where matters have become contentious).

The first step in preparing a Red Book valuation is usually to inspect the property both internally and externally. Following inspection a process of full due diligence must be carried out, which involves Land Registry title checks, researching of the planning history, statutory designations and analysing comparable evidence. With 21 offices in the South West, Stags’ valuers have access to a unique and unrivalled database of sold property evidence which enables us to be wholly confident in the figures we

provided a market appraisal with a view to getting the instructions to sell, at a figure significantly in excess of that which I had calculated the market value, following extensive due diligence and analysis of the comparable evidence. My figure was accepted by HMRC for use for Inheritance Tax purposes, and subsequently resulted in a lower tax liability to the deceased’s estate, therefore adding value to my client.

In 2016, Stags prepared formal valuations of around

£100 Million

worth of property in the South West.

arrive at. Once all the evidence is gathered, the valuer will use his skill and experience to prepare the valuation, which often ends up being a lengthy document, with a considered opinion as to the ‘market value’. Alarm bells would be ringing for me if a valuation only ran to 2 or 3 pages: I would question whether sufficient investigations had been carried out. I recently carried out a formal valuation of a detatched house in Exeter for Inheritance Tax purposes. A local Estate Agent had

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Agr i cul tu re & P ro f e ssi on a l Se rvi c e s

Agricultural Sales ADDING combining years of experience with new sale ideas

Chris Clapham MRICS FAAV 01769 572042 Already 2017 has been a notable year for Stags Agricultural Sales. In March Stags announced the acquisition of Tavistock based Ward & Chowen Chartered Surveyors, Estate Agents and Auctioneers, taking the number of local offices across the West Country to 21. The Ward & Chowen business includes a residential lettings portfolio, an Estate Agency office, a professional services team and Tavistock Livestock Centre. The addition of Tavistock Livestock Centre to our existing markets in South Molton and Honiton will allow us to establish a new client base in the West of our region. I am very familiar with Tavistock having worked for Ward & Chowen as sole auctioneer for eight years prior to joining Stags. I am looking forward to re-familiarising myself with old faces as well as acquainting myself with new clients! Tavistock will hold around 25-30 livestock auctions this year, primarily of catalogued sales of store cattle and sheep, with special breed sales and of course the annual poultry sale at the town’s celebrated Goose Fair in October. During 2016 the Stags On Site Sales team held 38 Sales across the South West. As a team, our philosophy is to strive to achieve the best results possible, adding value by combining years of experience with a willingness to embrace new sale techniques. This combination guarantees that our sales have the highest exposure, which in turn leads to the best possible sale results. The Stags office network spans the South West, with thousands of potential buyers on our shared database. Our website is one of the most popular websites in the South West, attracting over 170,000 views a month. (Please visit to view all forthcoming dates and downloadable catalogues). In 2017 we embraced new technology with our first online timed auction, dispersing the contents of the historic Stag Inn, Rackenford. The sale was viewed online by 9,262 people during its 10 day duration, with over 150 purchasers registering from 8 different counties, leading to excellent sale results.

dispersal sales held ‘on farm’. The first was the sale of the Rull Herd of pedigree Aberdeen Angus cattle, from a farm on the outskirts of Cullompton, the second was the pedigree organic Stone Farm Devon Herd from Bideford in North Devon. In both these cases the sales were held on the farm that the cattle had been born and raised on. Penned up in relative catalogue order, the animals were calm and at ease while prospective purchasers viewed them. Purchasers were left in no doubt as to how genuine the stock offered for sale were, enjoying a reassuring view into how the animals had been reared and cared for and ensuring 100% buyer confidence. With no disease risk, low stress levels and familiar surroundings, the cattle showed themselves off too their full potential and as a result sold exceptionally well, exceeding both vendors’ expectations by far.

In 2016, the Stags On Site Sales team raised over

£2.53 Million from the sales of machinery, livestock and equipment on the various farms and sites they visited.

In recent years it has become commonplace to remove livestock from their farms for disposal from the nearest livestock centre. In 2016, two sales in particular bucked this trend and in doing so exceeded everyone’s expectations. Both were whole herd


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Ag riculture & Pro fessio nal Ser vices

Farm Agency ADDING VALUE..when specialist knowledge is king Stags Farm Agency handles the sale of commercial farms, pony paddocks and virtually everything rural in between. Each sale – large or small – brings a different set of challenges but the most common objective often remains the same: to obtain the maximum value. Whatever the particulars of a property may be, we at Stags take pride in giving qualified and considered advice: we are a dedicated department that only deals with rural property – and with this specialism comes expertise be that in marketing or in strategic lotting. My team recognises that our clients only have one opportunity to sell, and therefore the most needs to be made of it, every time. Last year we were instructed to sell Four Elms Farm at Ottery St Mary at auction on behalf of a deceased estate. The farm is situated in an accessible location, with two roads splitting the property. This created options for lotting and after much consideration our advice was to offer the farm in 7 lots, thus broadening the appeal to a wide market of buyers. Marketing could then be tailored to the

In addition to lotting, I advised that we request pre-application planning advice from the local planning authority to determine whether their policies would allow change of use of the traditional and modern farm buildings. The generally positive response was subsequently used in the marketing to promote the property further. The land, which in all amounted to some 130 acres, was offered in a further 6 lots, ranging in size from 9 to 45 acres. These were lotted strategically so as to appeal to nearby land buyers, local farmers, equestrian, smallholding and amenity uses. The successful marketing campaign, which involved the local, regional and national press, as well as all the usual online portals, created substantial interest. The packed auction room was testament to the various buying groups being out in force, which in turn generated competition and plenty of

George Alder MRICS FAAAV 01392 680059

raised hands. As a result the farmhouse achieved 20% above the guide price while the land lots outdid all expectations by reaching between £9,000 and £14,000 per acre.

I would like to say how pleased we are with how George Alder and his team have handled

specific buying types. Lot 1, the farmhouse (which was in need of modernisation), was grouped with a range of traditional farm buildings and a single field, so as to appeal to both residential buyers and developers.

this difficult and prolonged transaction. George was given excellent support by Tig. Good teamwork really helped, as the sale was quite complicated.

Mrs. B, Vendor

In 2016 Stags Farm Agency marketed

6,210 acres and sold

22 farms and 142 land lots

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A gr i cult u re & P ro f e s si on a l S e rvi c e s

Lettings ADDING VALUE... by providing a ‘gold standard’ service Buying and owning property to rent out as a medium to long term investment remains a popular option. The combination of rental yield and capital appreciation means that the overall return still bears good comparison to other investment alternatives, even in times of political uncertainty. At Stags we advise landlords on all aspects of purchasing, owning, refurbishing and managing properties for the rental market. Our specialist and qualified staff are renowned for being detail-orientated: with legislation as complicated as it is, an eye for detail is essential for all our letting agents. We consistently strive to provide the best value for money service available for our clients. Indeed, we successfully manage a large portfolio of both urban and rural properties across the South West. For those of you interested in making a foray into the buy-to-let market, Stags offers a free buy-to-let service and can advise on matters ranging from location and type of property to tenant search and selection.

Andrew luxton MRICS FARLA 01404 42553

When considering purchasing a property to let many things need to be considered, including: n

Choosing the right property in the best location.


Getting the sums right: working out costs and potential returns.


Financing the let property in the most tax efficient way.


Understanding your responsibilities as a landlord and compliance obligations.


Looking after your let property and ensuring it is managed correctly.

A good letting agent will be able to confidently advise you on all of these matters, with the goal of you making an investment that is wholly compatible with your wants and needs. A client of mine, who used our complementary buy to let service, was working in the Middle East but was keen to get a foothold in the burgeoning UK property market. Together we viewed three properties in Exeter and identified that a modern 3 bedroom attached house in a popular part of the city met her particular criteria. With our help she successfully purchased the property and Stags have now been letting the property on a fully managed basis for three years, earning her a yield of 4.9%. More importantly for her, she has enjoyed a sustained period of capital growth.

An outstanding Lettings Department; with a flawless, professional service. We couldn’t recommend more

our second tenancy and are

highly. We have just embarked on

delighted with the service provided.

Mr & Mrs. D, Vendor


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Ag riculture & Pro fessio nal Ser vices

Estate Agency ADDING VALUE...changing the perception of Estate Agents one sale at a time

In the course of my day-to-day job I often visit properties which have opportunities for development and/or division which offer the potential to add value. It is, therefore essential for us agents to be firstly able to recognise the potential and secondly to have the option of turning to our in-house professional specialists for advice. A recent example of this working in practice was a property in South Devon which had languished on the market for two years with several other agents at, shall we say, an ‘optimistic’ price. The house, which had an agricultural occupancy condition (AOC) on it, was set in 10 acres and included a farm building. On being invited out by the owner, the Stags valuer immediately spotted two opportunities to add value: attempt to get the AOC lifted and investigate whether the barn would qualify under the permitted development

right (PDR) rules to allow the change of use to a residential dwelling. With the help of the Stags Professional Services team, PDR consent was applied for and subsequently granted, and the Totnes office of Stags was later instructed to sell both properties individually, in so doing vastly exceeding the initial asking price. Another client who reaped the benefits of the close working relationship between our Estate Agency team and the Professional Services Department is a dairy farmer in Ivybridge. Having been milking a modest number of cows for many years, he was keen to upsize to a larger farm but lacked the necessary investment to fund such a move. The estate agents and professionals within Stags advised on a strategy to maximise the value of the current farm, which included gaining planning consent to develop some traditional farm buildings and subdividing the large farmhouse into two dwellings. Whilst the project is ongoing, a conservative estimate suggests that the value of the farm has been increased by 30%, a figure which will make his dreams of a larger farm achievable.

Peter Symons FRICS FAAV 01803 865454

It was obvious from the start that you were all

professional, friendly and proactive. We would have no hesitation in

Some Estate Agents have a certain reputation and, unfortunately, it is often one that is not wholly positive. As a lifelong Estate Agent, I like to think that staff at each of our 21 offices lead the way in changing this perception. As a company, Stags prides itself in attracting and retaining the best staff, training them and encouraging their professional development so that we can offer clients the best possible service.

recommending Stags to anyone who wants to sell their property.

Mrs. B, Vendor

Stags has over

17,000 registered property buyers on its database

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