Staffordshire farmers are capitalising on the national shortage of housing by offering their land up for development.
The National Planning Policy Framework (NPPF) requires Councils to have a five year supply of deliverable housing sites at any one time, and in Staffordshire this has led to a steady increase in farmers offering plots of land for potential development as the county tries to meet its quota.
Catherine Whittles, a partner here at Bowcock & Pursaill who have offices across Staffordshire, said the quota offered a ‘window of opportunity’ for their farming clients to raise vital capital for their business.
She said: “I’m dealing with a dozen cases myself on behalf of clients who are marketing their land for development, either through the use of a land promoter or directly following consultation with a professional planning consultant.
“That’s certainly more cases of this type than usual, although we’ve seen a steady rise in work like this over the past two years as there’s a window of opportunity at the moment as council’s struggle to meet their quotas.
“Within our area, Staffordshire Moorlands and High Peak council for example, are trying to meet their quota, so if someone comes forward with a potential plot then they have to look at it.
“In addition, as it’s a national planning policy then even development on Green Belt land can be considered.
“Obviously not all sites are suitable for housing development, but for those farmers with a ribbon of land close to a village with good road access then clearly it’s an attractive option.
“We can end up acting for the farmer or the land promoter, as we will draw up the agreement between them and ensure it’s fair to both parties, and in the case of the farmer we can also offer advice on the tax implications of such a sale.
“Sound tax planning is essential as there are reliefs they are entitled to help them keep as much of the capital they receive as possible.”
Once a council has identified enough sites to meet their housing supply this is finalised in their local plan.
The amount farmers can receive for their land is dependent on several factors, namely the costs there will be to deliver the site, for example if there are issues with drainage, contamination or unstable ground known which reduce the value of the land.
Ian Naylor, a tax planning and wealth management specialist, also at Bowcock & Pursaill, said: “I am dealing with a number of farms who are entering into agreement with developers on sites in North Staffordshire and Cheshire.
“The length of these agreements can be anything from three to 10 years, and one I’m working on at the moment has planning permission for 180 houses so these are quite big plots and there is a lot of money involved.
“By reinvesting the capital they receive the farmer can postpone capital gains tax, and some farmers are using it to relocate to a better farm which they couldn’t otherwise afford to do.
“It certainly appears both developers and builders are now more active in seeking out sites and are approaching farmers direct, as there is currently such a lot of competition for sites.”
Any farming business interested in legal advice on this issue or tax planning support can contact us at our offices in Leek, Uttoxeter, Hanley and Eccleshall or via email at firstname.lastname@example.org