With forecasters anticipating that interest rates will remain at their current low rate for at least several months, this is a good time for country-house owners to add value to their properties by buying adjoining land.
The process involved in acquiring extra land is unusual in that there is no recognised science for calculating the value. According to Knight Frank’s latest rural research, the average value of farmland in England has all but rebuffed any hint of recession, and now stands at just under £5,000 an acre; they anticipate that the value will double in the next five years. However, although this figure gives a good starting point, it’s not the only measure incorporated in a valuation.
‘Although the negotiations usually begin with the agricultural value of the land, the marriage value of the land (the potential uplift generated by acquiring the land) comes into play early on,’ explains Angus Harley from Knight Frank’s country-house consultancy in Hungerford. ‘One method of establishing this is by dividing the potential uplift in the value of the buyer’s property and adding that to the cost of the agricultural value of the land. Ultimately, it depends on how desperately the land is desired and how hard the landowner is willing to negotiate it’s a horse trade.’
Mr Harley acted for a client recently who wanted to buy an extra 50 acres to create an envelope of privacy around his house: it eventually changed hands at £20,000 an acre. But that’s by no means a ceiling price: one piece of land in a Wiltshire village sold for a staggering £120,000 an acre last year, and in the City-boy favourite of Weybridge in Surrey, it can be far more.
Motivating factors for country-house owners wishing to buy more land include the desire to protect views, increase privacy or simply house more animals, or, in some cases, to remove nuisances from neighbours, who’ve been known to engage in anti-social activities such as motorbike scrambling.
Frank Speir of buying agents Prime Purchase says: ‘This is something we’re seeing more frequently, where clients are picking off adjoining land to create what they want. It’s largely due to a lack of good-quality stock on the market, but it also makes financial sense. Moving from a £2 million edge-of-village house to a £4 million country house could incur costs of £300,000 when you include sale fees, lawyers, Stamp Duty and moving costs. In our eyes, this is dead money buying the extra land will save time and money.’
However, Simon Lock from Property Vision’s office in Oxford warns against buying land whose size doesn’t equate to the property in question. ‘A two-bedroom cottage will most likely have reached its maximum value with a couple of acres of garden, so adding 100 acres of agricultural land is not likely to add value above the price of the land itself. However, a substantial house with all the trappings of a country estate but without the land to match will swallow up a few hundred acres with glee.’
* For more property features like this, subscribe and save
Plan of attack
The best approach to buying extra land is to agree a future strategy when you acquire the property. ‘One of the things we always do for our clients when they’re getting set up in a new country house is to do a Land Registry search of all the surrounding fields,’ explains Mr Harley. ‘We build up a jigsaw puzzle of who owns what and we grade certain fields as to which are must-haves and which aren’t.’
Next, cast a fly to the landowner expressing interest, and, if appropriate, mention a price. ‘Judge carefully here: if you go too low, you risk offending the owner,’ advises Mr Harley. ‘If there’s no immediate glimmer, put a marker down by following up with a letter saying that you respect their decision, but, should the situation change, you’d be interested.’
In the end, you can always wait for the inevitable. The landowner knows that they’ll only be able to release the value by entering into negotiations with the owner of the ‘big house’, so the best attack is to wait. Mr Harley adds: ‘Don’t forget that some land-that which has covenants on it that prevent development and are nigh impossible to lift-isn’t worth worrying about.’
* For more property features like this, subscribe and save
Contacts
Knight Frank country-house consultancy (01488 688511)
Prime Purchase (01608 810662)
Property Vision (01865 479130)
