There is no statutory right for tenants to buy their farm in most parts of the UK - although the position is different in Scotland. However, with uncertainty over agricultural land prices, and worries about concerns over threatened changes to Agricultural Property Relief, many landowners are coming to the conclusion that agricultural property does not give the returns they want. Some landlords are seeking to sell their farms, and buying your tenancy can be a sound business move.

Buying your land can:

• Reduce costs overall
• Remove the pressure from quarterly payments
• Secure the future of your business
• Provide a legacy for your descendants
• Remove the risk of rent reviews

You might expect a substantial discount as a sitting tenant, anything up to 40% of market vacant possession value, but this will be open to negotiation.

What’s more, raising the funding you need to buy can be easier than you think, thanks to a growing difference between the value of tenanted and freehold land.

Buying your tenancy has an important advantage as a property deal. As freehold, your farm is worth more than tenanted property. You can borrow up to 60% of the full value of your land as freehold, which your tenanted farm will become on completion of the sale - although you may only be required to pay the cost for the land at a discount, thanks to it being tenanted.

You can, therefore, cover a large proportion of your purchase price with your loan. By taking into account other assets such as your equipment and your house, the chances are that you will be able to raise the security for an Agricultural Mortgage which will require a relatively small cash deposit from your own resources. In certain circumstances, 100% funding may be available.

The help you need

At Rangewell, we understand the challenges you face as a tenant farmer - and the financial benefits that can come from buying your own land. 

We can work with you to find the finance you need. We understand the challenges of farming - so even if you have a poor credit history, no proof of income, or have defaults, CCJs or bankruptcy we can still help you find the answers you need to buy your farm, and safeguard the future of your family’s farming business.

We can help you set up the mortgage you need on an interest-only or repayment basis. We recognise the income patterns of agricultural businesses and can help set up repayments on a monthly, quarterly or half-yearly basis, on dates which suit your cashflow.

Loans can last for up to 30 years and can pass from generation to generation. This means that they don’t need to be repaid if the borrower dies - the new owner, your beneficiaries can simply take over the arrangement.

Contact us to find out more about lending to help tenant farmers buy their farms.

Other types of funding for agriculture include:

• Funding for agricultural equipment
• Agricultural land purchase
• Diversifying your farming business
• Restructuring your farm
• Change of agricultural use

Plus many more. If you need help to find the most appropriate funding for your agricultural business needs, simply call our team.