Our aim is to help you make the best of your business assets. Traditional areas of surveys and valuations are skills you may well have called upon in the past but there are now many other ways to unlock the potential of your holding, our partners respected in their fields can help advise you on the best way forward.
If you have let residential property on your estate, you need to ensure that the terms of the tenancy are in-line with the latest legal developments. Here, we outline six top tips to help you stay compliant.
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Social trends are demanding more rural housing, however, as Tim Breitmeyer explains, the planning system is failing to deliver.
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In a time where headlines are dominated by climate change, politicians debate strategies in parliament and businesses are impacted by an aging electricity network, the topic of energy has never been more hotly discussed, especially with increased pressure from environmental movements.
With this changing socio-political climate, businesses have come under increasing scrutiny over where they place their investments. Just this July it was announced that the National Trust is to divest its £1bn investment portfolio from fossil fuels. With the burgeoning emphasis on social responsibility, many funds look to renewable energy assets as investment opportunities.
As a result of the current market, the appetite for investments associated with clean energy is formidable. However it is not just the mounting social pressure that drives development and acquisition. Operational assets benefiting from government backed support mechanisms together with the development sites that they occupy offer investors the prospect of a secure income stream for the remainder of the subsidy term – typically 20 years. This, combined with the option of extending the original planning consents beyond their initial 25 year terms and the rising wholesale price of exported electricity, make operational energy assets such as wind and solar very attractive investments.
So if the investments are so lucrative and attractive, why would a landowner who may have risked their hard earned capital developing a project consider disposing?
One key reason is that the value of these operational assets with 3-4 years of performance data are worth significantly more than the initial capital input. These values have also strengthened due to increasing competition from the city for alternative investments as their appreciation of the risks involved have evolved and to the extent that such investments are now competing against traditional real estate opportunities where yields are at an all-time low.
We have also witnessed the emergence of specialist infrastructure funds looking to assemble portfolios of sites where the sum of the component parts will be considerably more valuable when they come to refinance than the individual assets alone.
Landowners and businesses have also typically struggled to borrow against the full value of energy generating assets or the income stream from sites leased to developers as traditional banks and lenders tend to take a more cautious approach to such assets than the wider market may.
Whilst investors have traditionally targeted larger scale developments, the growth in demand is pushing investors to consider smaller standalone assets (50kW and above). Landowners should therefore be prepared for letter drop approaches from new investors but to be aware that this is still a sellers’ market and to take advice.
For further information, contact Tom Allen, Energy Specialist (tom.allen@carterjonas.co.uk / 0113 426 9874), or your local Carter Jonas office.
Whilst winter is often a time of hibernation we recommend those looking to sell their farm in 2020 to start preparations early to avoid disappointment. As the farmland market tightens and becomes increasingly competitive, it is critical to set your farm apart from the competition, and attention to detail can make all the difference to not just achieving a successful sale, but also maximising value.
Get the timing right
Timing is key to any successful farm or estate sale. Whilst the market has become much less seasonal, the opportune time to market most farms is from spring to mid-summer, when crops are flourishing and stock farms and sporting estates look their best.
Identifying when you wish to sell and working back will enable you to formulate a plan and determine all the hurdles you need to overcome before a sale can happen.
Don’t let tax planning be an afterthought
Tax is a critical consideration and Capital Gains Tax is likely to be the biggest issue. The sale of land in a farming business will attract the standard rate of 20% but, if the vendor qualifies for Entrepreneurs’ Relief, this is reduced to 10%. Whilst you don’t need to be a mathematician to work out the benefits, you will need a tax expert to ensure eligibility.
Presentation matters
It is key to showcase a farm in its best light. You will want to ensure that prospective purchasers see your farm at its best and, as such, a ‘spring clean’ prior to marketing will benefit. It is often good to put yourself in the purchaser’s wellies, and ask yourself ‘would I buy this?’
Pick your team
It is critical to build a professional team who can move quickly. Putting this team together at the earliest opportunity will ensure that your sale is considered from every angle.
Inspection of the Land Registry Title and Deeds at an early stage is crucial, and addressing any restrictions on title or title defects and resolving them prior to launch will reduce the risk of a sale falling through. A comprehensive information pack made available to prospective purchaser’s lawyers will help expedite the conveyance.
Look to the future
Whilst farmers and landowners are usually aware of planning potential on their land, they are not always aware of the latest regulations, and highlighting untapped potential such as proximity to grid connection for developing renewable technologies could unlock significant latent value. Careful use of development clawbacks can also protect your interests long term, however there is a fine balance to strike to ensure that it doesn’t have a negative impact on a purchaser’s appetite.
For further information, contact Sam Johnson, Associate (sam.johnson@carterjonas.co.uk. / 01423 707801), or your local Carter Jonas office.
