Offers on property with agricultural occupancy conditions

Lucky12

We are currently in the process of trying to buy a property. It is a detached 3 bedroomed bungalow with just under 1/4 acre of garden. The property is subject to agricultural occupancy conditions. We meet this criteria and have managed to secure funding to purchase the property.
The property is currently on for £175,000. Our first offer of £156,000 has been refused, stating the owner believes she will get the asking price.
Taking in to consideration the following factors how do you think that should affect/reflect what we offer for the property.

• Difficulty to get a mortgage on a property with an agricultural tie.
• We are not in any chain and can proceed immediately.
• There is a tenant in the property currently who has a three month notice period (not yet given notice).
• We know the property was purchased 4 years ago for £150,000.

Any advice gratefully received. Thank you

Richard_Webster

What are similar properties in the area without an agricultural occupancy condition going for?

Lucky12

We have not been able to find anything else that helps us get an idea of just how accurate the asking price is. There are very few properties with agricultural ties on available and the ones we have found on the internet often are larger or have much more land with them.

Richard_Webster

I think a rule of thumb could be that a property with an ag-tie would be worth around 30% less than a similar property without an ag-tie. Therefore if you can find prices for some similar properties without ag-ties you have a point to start from.

For instance, therefore if you find similar properties being sold for around £250K you would think £175K was about right for this one and that's why the seller would not accept your offer.

If, on the other hand, the figure for non ag-tie properties is around £200K then I would walk away because the seller wants too much for it.

dizzydonkeys

we were looking at Ag clause properties as were OH's parents. There is some loophole where by if the vendors activly market the property for X amount of time they can then get the clause removed so chances are they are holding out for that.
Ag properties are meant to be marketed at a percentage less than market value to make them accessible to mr farmer and his shepherds.
Can't remember exact facts and figures but easily available on google (as far as you can trust google that is)
So don't be suprised if everything you offer gets knocked back, limited market - limited value to property - long time on market = remove ag clause - wide market - much more money.

Although IIRC vendors are meant to try find out why people are not offering on the property before clause can be lifted, so if offers have been made and knocked back they may end up with a shock when the request to have it lifted and are told no.

Lucky12

We were aware that ag-tie properties are worth about 30% less than without a tie but just trying to work out what is a fair offer taking in to account our strong position really,
Also theres always a possibility that the vendor is trying to get the tie lifted as obviously they could then sell the property for more. However it is our understanding that any interest in the property goes against the vendors case for getting the tie lifted as they have to demonstrate that they are unable to sell the property with the tie.
Due to our interest and offer it is very unlikely the council would grant an application for removal of the tie as it demonstrates there still is a need for the tie to be in place.

Richard_Webster

Due to our interest and offer it is very unlikely the council would grant an application for removal of the tie as it demonstrates there still is a need for the tie to be in place.

They may not have been serious anyway and only wanting to get the ag-tie removed. They will presumably try to say that the figure offered was unreasonably low but whether the Council will believe them is another matter.