Agricultural Land Purchases

There are significant differences between commercial and agricultural land, which explains why securing a competitive agricultural mortgage is more challenging than a standard land purchase mortgage. In general, Land Purchase Finance is the most common method to fund new land purchases - but the specialised nature of the farming business means many lenders are unable to help. 

At Rangewell, we can help you buy agricultural land by finding lenders who specialist in farm mortgages and agricultural loans. 

Before you apply for a farm land mortgage, you should aim to put yourself in the most favourable financing structure possible. To do this, you may be able to consolidate an existing loan or mortgage, or buy out a relative or partner about to retire. Rangewell can help you streamline your finances and position yourself to attract better rates on agricultural land mortgages. Speak to our team today to get started. 

Why agricultural land is more expensive than ever

The agricultural sector plays a key role in the UK economy. The potential of the sector continues to grow as Britain seeks to re-establish domestic food production. According to the UK Government, farmers manage over 70% of all land in the UK. Only arable land is viable for growing crops, which naturally leads to competitive pricing due to limited availability.  

By the end of 2023, UK farmland values hit the highest prices on record - which means farmers looking to expand their current holdings face significant costs of up to £9000/acre. In many cases, farmers who have previously sold land off for development are now trying to re-invest in farmland only to find prices have soared.

As costs rise, so too does the need for better financing agreements that help you acquire land without emptying all of your existing capital or demanding too many personal assets. Only by speaking to a specialised farm mortgage lender can you expect to receive the best rates. 

Your funding options for agriculture mortgages

We can provide a number of solutions for the purchase of agricultural land. These include:

• Agricultural Mortgages
• Commercial Mortgages
• Commercial Remortgages
• Tenant Farmers Loans

What is an agricultural mortgage?

An agricultural mortgage is designed to help farmers buy farmland, farm buildings or improve their existing farm properties. They are a specialised agriculture loan product, with the loan secured by the land itself. They are used to finance the purchasing of a farm, a farm building or a farming enterprise of some kind.

A farm mortgage can also fund improvements or extensions to existing farm properties or associated land.

How do agricultural mortgages work?

If you're looking to finance farmland, you can usually borrow up to 80% of the value of farm buildings or land, Choose repayment terms between five and 30 years and interest rates that can be fixed or variable. Repayments can be arranged to fit your business cash flow, either monthly, quarterly or annually. If your business plans change, you can extend the term of your loan, subject to approval.

Loans can even pass from generation to generation – helping you build a farming business not just for yourself, but for your family in the years to come.

There will be valuation, arrangement and legal fees to consider. There can also be additional costs for the services of professional advisors – but you have a commercially sound proposition, we may be able to help you arrange the Agricultural Mortgage you need.

Contact us to find out more about Agricultural Mortgages.

How much can I borrow on an agricultural mortgage?

Agricultural mortgages can offer a vast range of flexibility with minimum lending amounts starting from as little as £25,000. In addition, most lenders can provide maximum loans that are uncapped should you need significant borrowing. 

Due to the unique nature of agricultural history, each mortgage application will be addressed on its own merits. 

The amount you'll be able to borrow will vary and usually depends on the following factors:

• The value of the land
• Your business plan and projected income
• Your experience in the industry
• Income and expenditure 
• The size of the deposit
• Your credit history 

For professional advice about how your circumstances can impact your mortgage application, speak with an experienced commercial mortgage expert today. 

Raising funds with a Commercial Mortgage

If you already own your farm premises, a Commercial Mortgage might be a cost-effective way to raise funds to buy additional land. By taking out a loan on property and land you already own, you can raise considerable funds.  A farm mortgage can also be arranged to consolidate an existing loan or mortgage, or buy out a relative or partner about to retire, in order to attain a more favourable financing structure.

Get our help in finding the most competitive lender.

Buying agricultural property with a Commercial Mortgage

A Commercial Mortgage is often used for buying business premises – but it is possible to set up a Commercial Mortgage for agricultural land with associated buildings. These operate much like a residential mortgage, with a large loan secured on the property itself.

Generally, Commercial Mortgages are for 15 years or more, and, as with a residential mortgage, the premises will be at risk if you are unable to keep up your repayments

Unlike a residential mortgage, the rates for a Commercial Mortgage are arranged on an individual basis. Lenders will look at your business, your accounts and projections to ensure that it has a future and set interest rates based on the level of risk they believe it presents.

Because of the legal and administrative costs, it is uneconomic to borrow less than £50,000 with a commercial mortgage, and some lenders have a minimum of £75,000 or more, but there is no set upper limit.

Find out more about Commercial Mortgages and agricultural finance today!

Alternative lending options

If you need more flexibility about how much you pay back and when, we can provide a wide range of running options, including loans from alternative lenders with a flexible approach to you your funding needs.

Speak to Rangewell today to see how we have helped other agricultural businesses grow. 

Tenant Farmers Loans

Buying your farm tenancy can be a sound business idea and one that some landlords are increasingly becoming receptive to.

It can be easier than you think, thanks to a growing difference between the value of tenanted and freehold land – which can save you money when you come to buy out your tenancy.

You can borrow up to 60% of the full value of freehold land, which your tenanted farm will become on completion of the sale. By taking into account other assets such as your equipment and your house, you may well be eligible for a mortgage.

We can help you set up a mortgage with fixed or variable rates of interest, and interest only or repayment options repaid monthly, quarterly or half-yearly on dates which suit the cash flow of your business.

Loans can last for up to 30 years and can pass from generation to generation, so don’t need to be repaid if the borrower dies.

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

Agricultural lending with poor credit history

We work harder to find you the finance you need. 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 help you grow your farming business.

How can I get the best agricultural mortgage interest rates?

If you're looking for a mortgage for your farm, there will be plenty of mainstream lenders available to offer this type of borrowing. 

Each mortgage will be reviewed on a case-by-case basis, so the interest rates on offer will be based on how the lender will perceive the strength of the application. For example, if your application has a high deposit, a strong credit record and a wealth of experience, the lender may be prepared to offer their most competitive rates. 

How we help you capitalise your farming business

At Rangewell we work across the entire lending industry, and we have finance experts have personal experience in the needs of the agricultural sector.

That means we can provide a unique service. We will help you to find the most appropriate funding from lenders across the market – from established high street banks to alternative funding suppliers.

Our specialist teams, experienced staff and land agents can give you all the help you need to develop a proposal and choose the right loan. We can even help with rural land purchase at short notice or even the finance to diversify your farming business.

Call us to arrange a confidential, no-obligation, a no-cost discussion that could set you on the path to owning your own farm.