AHA and land purchase/sale

Discussion in 'Tenant Farming, Subsidies, BPS & Legal Issues' started by Against_the_grain, Oct 11, 2018.

  1. Against_the_grain

    A smallish part of our farm is owned by relations who want to sell the land to us. We have an AHA tenancy on the property which is for 3 generations(?) of which im the third. I have hopefully over 40 years farming left.
    What is the value of this land? As we are AHA tenants the value must be decreased by at least 25%?
    Should we buy it or sweat it out as I cant see many other people wanting to buy it. The land will never be as cheap as now though?
    What can they do to remove us from the AHA?
    Still Farming likes this.
  2. glasshouse

    glasshouse Member

    Against_the_grain likes this.
  3. Hampton

    Hampton Member

    I would buy it. The land will be heavily discounted due to AHA, so will be more affordable.
    Also, is it really correct to hold the family who want to sell to ransom. It would not only cause big tensions, morally they are entitled to sell it as it is theirs
  4. Even if you buy it at a smaller discount than you would wish if it avoids a fall out and you can afford it, you can always turn it over if you want.
    Against_the_grain likes this.
  5. Against_the_grain

    Obviously we will take legal advice but wanted to get some thoughts from other members.
    What discount is typically applied to land with AHA tenancy?

    The land in question would be worth £800,000+ perhaps on the open market with no tenancy so not a small sum.
  6. There is no set discount, they are relatives I assume amicible ones, its their idea to sell.
    but your 3rd generation so discount would be reduced, have you got an eligible successor who may have applied for a succession?

    watch they dont charge vat on the land, it reclaimable but after stamp duty has been paid on the net.

    farmers on our estate argued about whether the crown was offering us enough discount, but at the end of the day the discount % was on the crowns own valuation, so rate is meaningless
  7. glasshouse

    glasshouse Member

    egbert likes this.
  8. glasshouse

    glasshouse Member

    Friends of my father bought a couple of fields where he was tenant.
    After they bought, they tried to end the tenancy, which he resisted obviously.
    They took the huff big time.
    Nearly likes this.
  9. Poncherello1976

    Bought out our AHA a couple of years ago. Already had 1 succession so a couple more to go, and we paid about 2/3rds of the open market value. I would guess that with you having 40ish years left you would still pick it up for about 20-25% of open market value. Still worth doing I would say.
    Against_the_grain and Hampton like this.
  10. Billboy1

    Billboy1 Member

    If your in England it needn’t necessarily be you buying it if you can’t agree price then you’ll end up with a different landlord
  11. Still Farming

    Still Farming Member

    Glamorgan Wales
    Any development or claw back on or possibly with it or could be one day?
    If Relations own does it mean you could be left it or your Mum or Dad's share in Future ?
    Who do you pay rent too?
    If "sitting tenant ", on old AHA then you could be "sitting pretty ".?
  12. Frank-the-Wool

    East Sussex
    Just go to a good local Land Agent, NOT one of the big ones and get a valuation on the land.
    You might be surprised as to how low they now value it at.

    Bare land with no buildings and no future hope of drawing Gove's environmental shilling is proving difficult to sell unless there is a neighbour with bucket fulls of roll over money!
    If you have a valuation from a reputable local business then no one can gripe afterwards.
    The amount of rent you are paying on this land will have some bearing on the value.
    egbert likes this.
  13. egbert

    egbert Member

    We don't know the family dynamics,
    but be careful you don't put rellies in a place where they have to sell elsewhere.
    You could end up with a different landlord, and if a new landlord decides to put the screws on you, your AHA will become worth rather less.

    Values have oft been quoted at 30-40% below open market. So it'll be the cheapest land you'll buy.
    Balance that against the current high value and the almost inevitable slip if the sub tap is turned off, and interest rates creep up.
    Be realistic, do what you can afford, and keep as friendly with family as you can.
    Brisel and Formatted like this.

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