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Farm Business
Agricultural Matters
Effect of overage on land value/price
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<blockquote data-quote="holwellcourtfarm" data-source="post: 6085474" data-attributes="member: 42914"><p>What are the terms of the overage?</p><p></p><p>We bought this farm as sitting tenants subject to a 25 year 50% overage which transfers with the land if sold and captures 50% of any development value uplift on grant of planning permission (but then extinguishes the overage on the area subject to PP). It halved the value (so we paid around 1/4 of freehold unencumbered value). We had no problem with a 30% mortgage.</p><p></p><p>The impact of the overage on value remains until quite close to its expiry after which it tails off rapidly.</p><p></p><p>I would expect the overage you mention to have a lower impact being a smaller %age and shorter period.</p><p></p><p>If they accepted your offer and THEN imposed the overage I would be revising the offer downwards to take account of the overage.</p></blockquote><p></p>
[QUOTE="holwellcourtfarm, post: 6085474, member: 42914"] What are the terms of the overage? We bought this farm as sitting tenants subject to a 25 year 50% overage which transfers with the land if sold and captures 50% of any development value uplift on grant of planning permission (but then extinguishes the overage on the area subject to PP). It halved the value (so we paid around 1/4 of freehold unencumbered value). We had no problem with a 30% mortgage. The impact of the overage on value remains until quite close to its expiry after which it tails off rapidly. I would expect the overage you mention to have a lower impact being a smaller %age and shorter period. If they accepted your offer and THEN imposed the overage I would be revising the offer downwards to take account of the overage. [/QUOTE]
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Effect of overage on land value/price
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