Selling a Smallholding

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There are many smallholdings located throughout the UK, and these are typically residential properties that are situated on land that is larger than an average garden but smaller than a regular farm yet still used for certain types of farming. This guide details the issues involved with selling a smallholding, and provides tips on how to get a fast and fair offer from a buyer.

1. What type of property is a smallholding?
2. The different categories of smallholding property
3. Factors why a buyer could be interested in owning your smallholding
4. Reasons why a smallholding may be difficult to sell
5. Can a buyer obtain a mortgage to purchase your smallholding?
6. Four methods for trying to sell your smallholding
7. Selling a smallholding: frequently asked questions

What type of property is a smallholding?

In many locations throughout the UK you can find smallholdings, which tend to be privately owned properties where the owner lives and uses the land for a farming activity.
Smallholdings are typically country or rural properties that have a house or other type of home built on land which is smaller than the typical farm but larger than a regular garden. The land is used for different categories of farming, as defined further in the next section of this guide.
For definitional purposes in the UK, a smallholding is land that is used for either horticultural or agricultural activities and is sized anywhere from 1 acre minimum to 50 acres maximum, as explained on the website Smallholdings for Sale.
The properties stem from a law enacted in 1908 known as the Smallholdings and Allotments Act, which permitted local authorities to claim certain farmland. But budget crunches at councils during the 1970s prompted many of them to sell this land, resulting in a number of smallholdings that were purchased by private buyers and then used as their primary place of residence.

The different categories of smallholding property

No two smallholdings are the same and each property will be unique based on its location, the type of residential dwelling that’s on the land, and what the land is primarily used for.
There are several different categories of smallholding that can exist throughout the UK, as the website Bootstrap Bee explains. Qualifying types of smallholding properties can include:

• Raising livestock such as cattle, sheep, pigs and chicken for various purposes
• Egg and dairy production to sell those items in the local community
• Growing and selling crops such as fruits, herbs and vegetables
• Harvesting aquatic animals, for example having a fish farm
• Certain types of woodland management and forestry
• Keeping bees and using them to produce honey for sale
• And several other examples although they are less common

Factors why a buyer could be interested in owning your smallholding

Part of planning the sale of your smallholding is understanding the reasons why somebody might have an interest in making an offer on your property.
Knowing the appealing factors associated with the smallholding can help you to focus on them in talks with buyers, and some may even help with overcoming concerns they could have. Below are a few of the main explanations for why a buyer might want to own your property:
Country life: Some prospective buyers may have always wanted to own a farm but considered that to be too much responsibility given their size and the daily work involved. A smallholding could be seen by these buyers as a manageable alternative to owning a full farm, and that may lead to them making an offer.
Making money: Whether a potential buyer is looking to use your land for raising livestock, growing crops or some other purpose, they might like the idea of making money from the land where they live. In this case, it can help if you have documentation to show someone who is interested in your smallholding that the property can be profitable for its intended use.
Family tradition: Farms are often passed down between generations, and even though smallholdings are by definition smaller than a conventional farm, the same can be true for this type of property. You might discover that there a handful of buyers who would like to purchase your smallholding to have it as something that will stay with their family for many years.

Reasons why a smallholding may be difficult to sell

Although there can be many appealing aspects of owning a smallholding that could make it easier to attract buyers, you may also find that other people have doubts about making an offer.
Having a grasp on these potential concerns is important when selling your smallholding as it can help you understand why the sale may be going slowly. These worries can include:
High workload: Given that smallholdings are meant to be used for a number of small-scale agricultural or horticultural activities, the work involved might simply be too much for some buyers, particularly elder buyers or those with physical disabilities. They may see the effort required for the farming practices as being a dealbreaker and opt against making an offer.
Minimal profit: There’s always the possibility that your smallholding farming practices are not generating much of a profit and never have, or that you’re even operating the property at a loss. Buyers will likely ask this question when assessing whether to make an offer on your smallholding, and they’re unlikely to look favourably on a property that is unprofitable.
Undesirable location: Even though the often country or rural location of a smallholding can be a major attraction for some buyers, you could find that other buyers may not want to make an offer on your property because of where it’s located – the land could be too far from shops, public transportation or other amenities or be in an undesirable area like a flooding zone.

Can a buyer obtain a mortgage to purchase your smallholding?

Beyond the usual reasons why a potential buyer could be reluctant to make an offer on your smallholding outlined in the prior section of this guide, another factors that can complicate the sale of this type of property is when someone will need a mortgage to purchase it.
Many conventional lenders that offer home loans to help people fund buying freehold or leasehold houses, flats and other residential properties can be wary of granting mortgages for purchasing smallholdings, as the website for mortgage company Fox Davidson notes. Potential land use restrictions, your plans for the property and more can create enough concerns to get rejected by these lenders.
If a particular buyer will need a mortgage in order to buy your smallholding, you may be worried that their inability to get a loan will make it impossible to ever sell the property.
Thankfully, you still have some options available, including contacting a quick property buying company such as LDN Properties. These businesses are well known for making competitive and fast offers to purchase almost any category of property, and that includes smallholdings.
And if you sell your smallholding to an honest company like LDN Properties that commits to charging zero commission, you will be assured of receiving the full eventual sale proceeds. That’s preferable to selling your property through an auctioneer or an estate agent, which are two methods that will charge you commission which will be taken out of the sale proceeds.
The next section expands on the benefits of selling any type of property this way, including that you will not have to pay any commission with legitimate quick buyers and the timeline for selling should only be a few weeks, which includes exchanging contracts and paying you the proceeds.

Four methods for trying to sell your smallholding

Once you have made the choice to sell your smallholding, another important decision you’ll need to make is about which method to use in order to try and get offers – whether that’s selling to a quick buyer, selling at an auction, selling without any help or selling with an estate agent.
You’ll see from the details below about all four approaches that some of them have notable drawbacks, including the fact that selling on your own make take more than a full year. Yet other selling strategies have clear bonuses, like not paying any fees when selling to a quick buyer.
The best approach is to write down your top priorities with the sale of your smallholding, including your goal selling price, whether you can accept paying any fees, and how long you are prepared to wait before getting a serious offer. Then just compare these factors against the details of the four choices below to find out which one is the closest match to your needs.

Selling to a quick buyer

LDN Properties and other quick property buying companies have the funds upfront to purchase almost any category of property right away, with no waiting first for many weeks or even months to get approval for a mortgage that would cover the price of the transaction. That helps them shorten the usual timeline for buying a smallholding to just a handful of weeks, and this includes the final steps of paying the seller their full proceeds and exchanging contracts.
That’s on average much faster than the other three approaches for selling detailed in this section, which can all take at least several months and sometimes more than a full year. For owners looking to sell on a speedy schedule, a quick buyer may often be the best choice.
Quick buyers are experts are making fast and competitive offers to buy almost property regardless of its age, condition, location, shape, size or type – and that includes smallholdings. And you’ll still get a fair offer even if your property is considered to have a major problem, for example if invasive weeds like Himalayan balsam or Japanese knotweed are present.
Beyond smallholdings, LDN Properties’ long list of varied purchases and offers made across the UK also includes houses on a hill, barns, holiday lets, guest houses, half-finished properties, mundic houses, blocks of flats, prefab homes, uninhabitable properties, rental homes, penthouse flats, properties that do have a Fenestration Self-Assessment Scheme certificate, homes with an infestation and more.
A top advantage of selling your smallholding to a quick buyer is that you won’t have to pay any commission, which will assist you in reducing your selling expenses. That’s preferable to having to pay fees to an estate agent or auctioneer for their work in finding a buyer for your property, because this commission will be taken out of the sale proceeds and add to your net costs.

Selling at an auction

With an auction, you’ll choose a reserve price – the lowest price that you’re willing to sell your smallholding – and then people can place bids starting at that value or higher. Just note that if your property does not receive any bids then it is considered unsold, and you’ll to begin again with trying to find a buyer, which can add a lot more time to the overall schedule.
And if you only get a single bid at the reserve price, this is viewed as a binding legal agreement for you to sell your property, and the winning top bidder can sue to enforce it, should you try to abandon the sale after the auction. For that reason you must calculate a reserve price that should generate a profit from the sale, even after you pay the auctioneer their commission.
The auctioneer handles the majority of the effort in selling your smallholding, which begins when they draft a listing that features photographs and a description of the property. They’ll advertise this listing to make potential buyers aware of it, and they’ll host the auction. If your property manages to sell, the auctioneer will also oversee the completion of that transaction.
This isn’t the swiftest way to sell a smallholding because you’ll have several waiting periods, including many weeks at least between the day that you decide to sell your property and the day that the auction is held. And then if your smallholding does sell at the auction, the top winning bidder will have about a month to sign their mandatory paperwork and various other tasks. If you’re looking to sell as fast as feasible, you might want to consider another method.
Some auctioneers could be willing to negotiate a shorter deadline for the buyer to finish their required steps, so it’s worth asking, but others may give them even more than a month.
You will also need to pay commission to the auctioneer if they succeed in selling your smallholding, and this will likely be charged at 2.5 percent of the final auction sale price. This will be subtracted immediately from the proceeds, which will raise your overall selling costs. For those smallholding owners who are primarily interested in lowering their expenses when selling, look at some of the no-fee options including selling solo or selling to a quick property buyer.
It is always a good idea to ask auctioneers if they might be willing to have the winning top bidder pay some of your fees, or if the auctioneer can set a lower rate of commission for you to pay. Just note that other auctioneers might charge fees at a rate even higher than 2.5 percent, which would result in even more the eventual sale proceeds being deducted for this charge.

Selling without any help

Or you could try selling a smallholding on your own, but this will require that you do all the work involved, from preparing and advertising a listing through to organising viewings and hearing offers. It’s a significant amount of time-consuming work and can be very stressful.
That’s why you should only seriously consider this method of selling if you have previously sold a smallholding or you have a suitably qualified friend or family member that is willing to help for free with selling the property. If not, it may be more than a full year before you’re able to sell.
And a buyer could always make an offer but then cancel it – this would make the sale collapse and extend the selling timeline much longer because you’d have to start over looking for buyers.
One of the few obvious benefits associated with selling this way is that you would not have to pay any commission to a third party such as an auctioneer or an estate agent for selling your smallholding, which would reduce your costs. But that saving could be cancelled out by the money that you will need to spend on advertising your listing and various other steps.
If one of your top aims with selling is not having to pay any commission, you could achieve this goal but also get a much more rapid sale of your smallholding by getting in touch with a quick buyer. These companies, like LDN Properties, make fair and fast offers to buy almost any type of property, and never charge owners any fees – and they’re also able to complete the process of buying a smallholding within weeks, and that includes the major step of exchanging contracts.

Selling with an estate agent

Your workload when selling a smallholding with an estate agent will be minimal, because it will be their duty to handle most of the steps required to find a buyer. An estate agent will prepare and advertise a listing for your property, advertise this in their offices, in local newspapers and online, schedule viewings and hear offers, ideally guiding one through to completion.
This can be a lengthy process that may take many months and even more than a full year. And remember that someone could make a legitimate offer to purchase your smallholding but then withdraw it and make the sale collapse, and they won’t face any penalties so long as the contracts are not yet exchanged. This unfortunate outcome would also extend the selling timeline significantly because you’d have to start again with trying to generate offers.
If you’re looking to reduce your expenses when selling your smallholding then you may want to review other options, because estate agents will increase your costs by charging you fees for the successful sale of your property, typically in a range between 1.15 percent to 1.40 percent of the smallholding’s final selling price, but the exact commission could be higher or lower.
It’s important to consider that some estate agents might never have sold a smallholding before, and this could imply that they might not know how to best generate interest from potential buyers in your property. For that reason, you should ask individual estate agents whether that have such experience and do not sell your property to any that do not have it.
You might also experience a situation where an estate agent quotes an attractively large price for selling your smallholding, despite them understanding that you’ll only be able to attract buyers’ interest at a lower value. Estate agents do this so that you agree to sell using their services, because they can charge commission if they’re able to sell your property.
One way to get around falling for this trick is by asking multiple estate agents to give you free quotes for what they estimate will be the sale price of your smallholding. And then you can browse Rightmove, Zoopla and other property sales websites to look up the past and present sale prices of smallholdings that are similar to yours. Finally, calculate the average of all these values to get a more accurate sale price estimate.

Top queries and answers about selling a smallholding

If you are considering selling your property quickly, you may have a few questions for us, ranging from the repairs required before you sell through to selling in bad condition. Here are some of the key questions we’ve been asked about selling a smallholding: