Farm Vendor Finance

[unlacedgecko]

Isnt this how share milking worked in NZ ? , but I cant see how one could do it here with lack of an economic relationship between farm income and land/property values as the general picture ?

No. Share milking is different, and unrelated to vendor finance.

 

[Doing it for the kids]

Comes with a damn big house by the look of it!

 

[maen]

The problem in the U.K. is being able to roll money into farmland from sales of farm land for building. This has rigged the market and made land impossibly expensive. I am surprised Government has not seized soon the benefit of higher tax revenue by wanting the tax paid. The reasons grandfathers had the ‘opportunity’ in the 1930’s was partly Death Duties on large Estates. This had the effect of giving opportunity to those that would not normally have had a chance. It could be seen at a slightly socialist view, alternatively in the 30’s it lead to a revival and stimulation to what then was a very staid industry. Arguably our current industry has been mainlining subsidy for too many years and now is the time to ‘Refresh’.

 

[digger64]

I am both landowner's agent and a tenant grazier so can see it from both points of view. From many land investors point of view, improvements such as drainage and fencing etc., hasn't really paid off in recent years, because the land value rises anyway, so they don't see the point. Equally, graziers on a seasonal lease have no incentive to invest in the land they graze which they may well lose next year. So it sometimes turns into a rape and pillage exercise from both parties. The best solution from both perspectives was for the land to be let on a 5 year FBT, that way both parties had a bit of security to invest under a very simple and transparent tenancy agreement.

I rent ground from my employer under this arrangement, new fencing & water infrastructure is covered by the landowner and I cover the maintenance, lime & fertiliser. No one makes a fortune, but the land is kept in good heart.

If you cant afford to fence it then you need to sell a little bit surely or come to another arrangement- quite frankly the situation is ridiculous

 

[David.]

Sorry but I find that offensive ,we rent /graze loads different types of land off lots of different types of people (we do our best within the circumstances we are confronted with ) and TBH landowners have got neglect and delapidation down to a fine art and are consistantly good at it IMO . This I find rather illogical as most( but not all) seem to spend their whole lives aiming and pay loads of fees for advice on avoiding or reducing their tax liabilty etc but dont seem to be able to understand the need for fences,gates and drainage etc even when there is a 40% grant towards the cost sometimes availiable to them .

It was not intended to be, and if you are one of the good ones, I apologise to you.
However, almost anywhere in the country you can find a place that has the characteristics I mentioned, lookered once a week, dead sheep, sheep with maggots. Enquiries with local stockmen always confirm the types to whom they belong, and their contempt for them.

 

[Pieces_of_Eight]

To make such agreement attractive to the vendor the purchaser would have to offer better terms than a bank.

You mean why sell it to an ambitious chancer over ten years when you can sell it through an agent next week and have all the cash safe in your pocket within 3 months?

 

[Pieces_of_Eight]

'There's no such thing as luck, you just have to make the most of any opportunities that present themselves to you'.

I don't buy that.

In all walks of life there is the luck element of being in the right place on the right day to say the right thing to the right person.

I just think of the chance encounters I've had with people that have developed into more.

I accept that there is a skill to noticing/realising/seeing when an average situation has an element of opportunity to it.

 

[toquark]

If you cant afford to fence it then you need to sell a little bit surely or come to another arrangement- quite frankly the situation is ridiculous

It's not that they can't afford to fence it, its that it simply doesn't make sense to. Why spend tens of thousands on fencing when the value of the land goes up anyway with or without the fencing?

I know its not how most farmers would look at it but many landowners are simply investors looking to park money and watch it appreciate, which land usually does, regardless of its agricultural condition. This type of land will just be a slice of a much bigger portfolio of assets. They don't know or care how it is farmed, they don't need to.

 

[digger64]

It's not that they can't afford to fence it, its that it simply doesn't make sense to. Why spend tens of thousands on fencing when the value of the land goes up anyway with or without the fencing?

I know its not how most farmers would look at it but many landowners are simply investors looking to park money and watch it appreciate, which land usually does, regardless of its agricultural condition. This type of land will just be a slice of a much bigger portfolio of assets. They don't know or care how it is farmed, they don't need to.

Perhaps I should take the same attitude with my dogs -just turn them out at night to find their dinner then , if its your lambs or poultry they might eat as a- land owner you wont mind or care then either -probably insured anyway so it doesnt matter does it ?
- Posh pikeys springs to mind

 

[toquark]

Perhaps I should take the same attitude with my dogs -just turn them out at night to find their dinner then , if its your lambs or poultry they might eat as a- land owner you wont mind or care then either -probably insured anyway so it doesnt matter does it ?
- Posh pikeys springs to mind

It's not my land. I'm the tenant. I work for a landowner who I rent land from, I own land where I live which is not farmed like that. The FBT works on the rented ground as both me and the landowner have an incentive to put something back into it. Its seasonal leases which are where many of the problems arise.

I'm not defending the position at all, I'm just saying that's how it is.

 

[Humble Village Farmer]

From what I've heard, it is more of a giver receiver idea. They are forever on Facebook wanting something for nothing and showing off their "flock" of half a dozen bottle lambs. I think the business plan is more advertising via a big following on social media than making any money off the farm.

They were on farming today a few weeks ago. At the time they had about 20 sheep and some cattle. I heard they were given the sheep. So they might get a bit more respect from me if they actually invested some of their own money and got on with some proper farming.

 

[Humble Village Farmer]

I agree, but he possibly started when you could get a start by taking a tenancy for keeping the place tidy..
And fair play to him.

And those times might be coming again...

 

[delilah]

Not directly related to the OP but may be of interest to some on here:

https://ecologicalland.coop/

 

[delilah]

The gold standard in how to get started with the help of friends you haven't yet met:

https://www.fordhallfarm.com/

 

[unlacedgecko]

From what I've heard, it is more of a giver receiver idea. They are forever on Facebook wanting something for nothing and showing off their "flock" of half a dozen bottle lambs. I think the business plan is more advertising via a big following on social media than making any money off the farm.

They were on farming today a few weeks ago. At the time they had about 20 sheep and some cattle. I heard they were given the sheep. So they might get a bit more respect from me if they actually invested some of their own money and got on with some proper farming.

They both reckon to be farming full times, having recently given up their off farm jobs.

 

[deleted user 837354]

Seems to be there is a small but growing number of people looking to farm.

But also a small but growing number of people looking for labour to work on farms.

Could the two parties benefit from some kind of union do you think?

Also, why the insistence on young folk trying to farm in the UK? Go abroad where land is a lot easier to come by.

 

[glasshouse]

You would have to have a detailed, legally binding contract, just the same as for any other financial arrangement, unless the landowner is a complete numpty.

If mainstream lenders won’t touch you to buy land, then why would a landowner, who often has that as the principal capital asset, take the risk either? Maybe for a close family member who you wanted to slowly hand the farm over to, but for anyone else would be foolhardy I would think.

Its quite simple
The owner sells the farm to the new farmer.
He then grants a mortgage to the new man secured against the property.
Its not risky at all.
The real win is that old farmer gets more interest than at the bank, and the young farmer pays less interest
Just cuts out the middleman

 

[glasshouse]

Sorry but I find that offensive ,we rent /graze loads different types of land off lots of different types of people (we do our best within the circumstances we are confronted with ) and TBH landowners have got neglect and delapidation down to a fine art and are consistantly good at it IMO . This I find rather illogical as most( but not all) seem to spend their whole lives aiming and pay loads of fees for advice on avoiding or reducing their tax liabilty etc but dont seem to be able to understand the need for fences,gates and drainage etc even when there is a 40% grant towards the cost sometimes availiable to them .

Thats cos they are brain dead

 

[S J H]

They both reckon to be farming full times, having recently given up their off farm jobs.

That’s probably where they’ve gone wrong. Need to be doing a lot of farming for a young couple to give up 2 jobs.

 

[Bracklandbarn]

I don’t blame them for asking- however to be farming livestock in East Anglia as a new entrant/ first gen (or whatever buzz word you want to use) then the sooner they realise they will need to farm without a “farm” the better. Landownership in this area is predominantly estates/ horse studs and smaller arable farms. Fitting in with these to build stock numbers is key so if they haven’t the experience of large numbers of stock I’d be looking for work with an existing outfit/ store lamb finisher PDQ even if it just to learn how fence using a Rappa!

There are already plenty of stock farmers without a farm in this area so competition for permanent grassland is strong- let alone the need/ want for a farm. Any smaller farms or small holdings in my area are sold as goodlife properties or equestrian setups so they are available but at a price. I would of thought the best way to own their own property is for them to keep their full time jobs since they will need a secure income to pay the mortgage