Planning and Financing Your Smallholding

A problem can occur when an unsuitable property is found at what appears to be a bargain price (though this is a rare occurrence with today’s inflated prices). However, there has to be a reason for the depressed price and it will probably be that if it is unsuitable for you it will also be unsuitable for many other people. You may convince yourself that it only needs modernisation and an extension to make the house acceptable and the old rusty iron barn would be serviceable if re-roofed and the floor concreted. The land, of course, could be brought into a very good state by drainage and re-seeding. Such a bargain would almost certainly prove a disaster. The amount of time and money required to put things right, so that you could start to earn a living, could be enough to drain not only your resources but your enthusiasm as well. It is better to pay more cash ‘up front’ and part earning sooner than end up paying at least as much and Inning time on your paying projects. Of course, there are real bargains, but most of these are bought by builders or professional developers who have cash available to make fast closures tin the deal. If you are in a position to compete with these people, for it. Cash talks, especially when the bank manager is I threatening to foreclose.

When considering the property valuation against its condition, there needs to be some allowance made for all shortcomings so that, if you moved in and rectified them, the value of it would live been increased to cover your time and money and also give it profit on top. Many of the asking prices do not allow this margin.

A smallholding is basically a house, some out-buildings and land. From this description one could expect to be able to calculate the price by the simple addition of respective values. This, however, never reaches the actual value because a premium is required for the three items coming together. Land also tends to be more expensive in small plots than in large areas, the reason being supply and demand. There are more people with the ability and inclination to buy one or two acres than there are those wishing to buy 100 or 200 acres. Out-buildings add to the desirability of a holding for without them many ventures, both agricultural and otherwise, become difficult or impossible to undertake. The individual value of the dwelling house and the land can be easily estimated by comparison with other properties and accommodation land advertised in the area, whereas the value attached to the buildings depends not only on their quality and condition, but also on how versatile they are. The final decision has to be made by asking ‘Is this what we want and does it fulfil our needs?

If the answer is yes then, finances allowing, you may be right to pay a premium to get the property that suits your needs.

Combining the drainage cost and the re-seeding cost gives about £500 per acre which compares favourably with the purchase of extra land. Consider a five-acre holding of average pasture: to treble output by land purchase would cost in the region of £10,000. However, by land improvement this would be closer to £2500. Remember that the land has to be stocked and the extra stock managed whichever way is used. Points to note are that there is no guarantee of the re-seed taking first time; as with all agricultural pursuits you are at the mercy of the weather. Take local advice on the best time to re-seed. Also a re-seed does not last forever and you will still have to maintain the land by having it mole ploughed every three years or so and keep ditches free.

The expense involved in improving the land which you already own depends on its present condition. If it is covered in scrub and brush wood, there is extensive work involved in clearing and removing stumps before a plough could come anywhere near it. But let us assume the land is not that bad. Wet land with rushes, mosses and weed grases can be ploughed directly, but unless the drains are in good order ploughing and re-seeding will not give full benefit. If the land is already drained but still holds water it is possible that the situation can be improved by mole ploughing. This draws a special plough through the soil leaving holes (similar to mole runs) behind it. To do this a powerful tractor and, of course, the mole plough itself are needed, but an indication of cost could be obtained from an agricultural contractor. The problem may lie in the state of the land drains themselves. If they were laid years ago the chances are that they иге not laid at a very great depth and the trench was not back filled with stones. Also they were designed to take the weight of horses and horse-drawn equipment; as time has gone by agricultural equipment has become progressively heavier, compacting the soil and possibly cracking the old clay pipes. A broken or blocked drain can show itself as a darker green patch in a field or u boggy patch or strip aligned with the run of the drain. Let us assume the land is poor pasture, but needs redraining.

To lay drains it will be necessary to employ the services of a contractor as he will have all the machinery required, but it may he possible to save money by labouring yourself.

Here we have a total cost of £1.76 per metre for laying drains. An acre field 70 yards square would need drains every 20 yards if it was either very wet to begin with or needed to be well drained for some other reason. This would give three runs 20 yards apart giving a total of 210 yards of drains for one acre costing £368; if a lower standard of drainage was required only two runs could be laid at a cost of £245.

The ploughing and re-seeding should also be done by a contractor who has experience to back his judgement of what is required and when it is best to do it.

This is a list of costs per acre for re-seeding.

The potential of the land associated with your chosen smallholding will vary greatly with area, but however good it is there will always be room for improvement. If the pasture has been badly neglected a complete programme of drainage, ploughing and re-seeding may be in order. Often, however, this does not need to be done to improve the land sufficiently to make a useful improvement In its stock-carrying potential. It is natural and sensible to aim for the best return from your land, and this can be done by taking on a larger area of land or by improving a smaller acreage. The stock-carrying potential difference between old poorly drained pasture and well-drained newlay is in the region of 300 per cent. Another way of looking at this is that, for every acre of old pasture you have, a similar improvement in output could be achieved either by buying a further two acres of similar land or by draining and re-seeding what you already have.

Land prices vary greatly with area and time, but In general land will always be a good asset on our overcrowded island and at present average pasture is valued around £1000 per acre. (This could be as little as £500 per acre for very poor land in some areas or more than £3000 per acre for prime land in more fortunate areas.) Therefore it is possible to make the generalisation that to treble your output by purchasing land of a similar quality would involve some £2000 per acre already owned.

This is for properties built in 1919 and before. This covers more structural items such as roof, gutters and windows, and so is probably the most useful of the three. This is reflected in the fact that in many areas there are waiting lists running into years (three years in our area).

The improvement grant

This is to bring a basically sound property up to a higher standard; for example, fitting larger windows. Again there may be long waiting lists, so enquire from the local council involved before banking on getting any assistance.

There is a leaflet available from your local council housing department describing all these grants and how they apply to different cases.

It is also worth noting that, as with many things, changes are in the pipeline and these grants are no exception. The most important change is that their availability will be on a means tested basis.

It should be borne in mind that the property needs to be basically sound before you start improving it, and unless you know what to look for take professional advice. A simple crack may be just some old plaster or it could indicate that a wall is about to fall down. Serious structural work can prove very expensive and if you get involved with new roofsor underpinning walls, what looked like a bargain at first can soon cost you well over market value.

If you are looking for a property which is in need of considerable work you may find that it is eligible for certain grants towards this.

The grant system at present is divided into three types: the Intermediate, the repair and the improvement. All three are based on the value of the property.

The intermediate grant

This is for basic amenities such as bath, toilet and hot and cold running water in the house. It generally covers cases where the it was previously lacking, but can be for repair work under certain circumstances. Some roof repairs can come into this category, but consult with the local council. If the property does not have the basic amenities, the grant is automatic but may be subject to a waiting list. As with everything else there is only so much money to go round.

Another important point is the depth of soil. When the soil is very shallow with underlying rock the ground may be prone to water logging in winter and drying out in summer. The only way to satisfy yourself about soil depth is to take a garden fork or steel bar with you and probe the soil at numerous places around the holding. It would be polite to ask permission to do this, but if the owner or agent refuses you can only assume the worst: very little soil.

Look at the fencing; you would hope to see three-foot sheep fencing with one strand of barbed wire above supported on pickled stakes. The wire should be tight and the stakes firm in the ground. If the perimeter fence is like this you will have few problems, otherwise allow 70 pence per metre for new fencing excluding labour.

Consider general location. How exposed is it to the prevailing wind? Is there any shelter for stock? Is there a river likely to flood the land (or property)? Is there anything close by which may cause you problems in the future? This could be anything from an adjoining farm doing early milking to an abattoir and the various aromas they produce. Remember, such things are part of the district. If you move in next to them it’s no good complaining later. No one likes it when a newcomer to the district starts complaining about something that has been there for years, especially if it also provides local employment. Make sure you are satisfied with the property, the surrounding environment and all that goes with it before you make an offer.

The out-buildings need careful scrutiny. Look for drainage. Do they have concrete floors? Do they have any hard standing outside them? Which way does the water run when it rains? All these things can affect the usefulness of a barn. If, for example there is no hard standing in front of a barn any movement of livestock in and out in wet weather soon produces mud problems; the same is true for vehicles if you use the building for storage and want to load/unload at frequent intervals. Some hardcore is the minimum required – more expense if it is not already there. The general requirements for a barn are that it should be dry and airy without being cold and draughty, although anything causing dampness will be a problem. You are unlikely to find the perfect barn, so be prepared for some maintenance.

The land is far more difficult to assess than the buildings. Its appearance will depend upon its management over the last weeks, months or years. If it is full of rushes or there is a lot of moss in the grass, this indicates wet acid land. Look at the ditches: if they are badly blocked or non-existent you could have found at least some of the problem. If the ditches are there and are full of stagnant water, look to see what has caused the blockage. If the blockage is on someone else’s land, there could be a long-term problem with drainage. Also check the water supplies.

When you have your batch of chosen properties in a given area you need to go on a serious viewing trip. It is best to phone the estate agents in advance to ensure the properties are still on the market and to arrange appointments for viewing. Try to plan your day(s) to give maximum viewing with minimum driving, ie one district one day and another the next. Allow yourself plenty of time to look around and also to discuss the property afterwards. It is worth making a few notes to help you remember what you have seen where. To avoid being overwhelmed by various properties it is advisable to look at no more than four per day; this allows time to chat to the vendors and thus find out far more than the estate agents can tell you about the immediate surroundings, amenities, neighbours etc.

Winter is arguably the best time to look at smallholdings because any problems associated with water (leaking roof, rising damp or badly drained pasture) become more apparent at that time. Also properties don’t sell as fast then as in the summer. However, against that there are possibly not as many properties on the market in winter. When looking at the dwelling house pay special attention to the roof and floors, both of which can be expensive to replace. Take note of any damp patches on the walls and ceilings. If there are such things as a solid fuel range or kitchen units enquire if these are included in the price; even if they are not to your liking, every little helps when you first move in and you can always sell them later on.