“Many can’t find the ideal house in the countryside, or have been priced out of it, which means they are open to considering a project.”
A perfect storm of house-buyers seeking rural ideals, rising property prices and a new wave of self-builders is boosting the value of disused agricultural barns and buildings.
Self-builders with Grand Designs ambitions are helping to drive demand for agricultural buildings with permission for conversion – and now could be a good time to sell those assets with potential.
Redundant barns and livestock buildings for conversion are being snapped up in competitive bidding processes across England and Wales.
Preparing for a sale
Barnstorming demand from buyers seeking
The trend is being driven by several factors including a movement from cities to the countryside, rising property prices, and a pursuit for space.
“There is a shortage of supply in the rural property market at the moment, which means buyers are being forced to be more open-minded in terms of what they’re looking for and they’re prepared to pay more than they would have 18 months ago,” said Jack Mitchell, Associate Partner at Carter Jonas.
“Many can’t find the ideal house in the countryside, or have been priced out of it, which means they are open to considering a project.”
Key to extracting the most value out of barns and sheds is preparing the sale well in advance and, where possible, securing Class Q planning permission.
A stream of successful online auction sales has reinforced the demand for property with potential.
In July, one barn with a four-acre paddock received nearly 50 bids and sold for £125,000 over its guide price.
The Barn at Parshalls Farm in Ilminster, Somerset, reached £355,000 at online auction, complete with permission for conversion to a four-bedroom dwelling.
The strong bidding mirrored two similar auctions of barns with land and planning permission held earlier this year. Two lots at Skillgate Lane at Stoke-Sub-Hamdon, Somerset, sold for a total of £405,000 against a combined guide price of £350,000.
In Yorkshire, a barn with Class Q permission on land on Wetherby Road, near Leeds, saw strong demand from 12 self-builders who outbid professional developers to secure the property at £50,000 over its £300,000 guide price.
“Changes to permitted development rights for agricultural buildings have opened up opportunities for such developments,” Jack said. “However, there are still buildings out there that could potentially be converted, and their owners may not be aware of the lucrative opportunities.”
Although buyers are searching for a private plot, the majority are only looking to purchase a small area of land, with many preferring to spend that money on the building work instead. “An acre or two is often the ultimate in added value,” Jack added.
Sam Johnson, Associate Partner in the firm’s Harrogate office, says demand for this type of property is good in the north of England, particularly in rural locations which are commutable to towns and cities.
The land on Wetherby Road had a general purpose steel portal frame Class Q development secured and came with nearly an acre of land.
“Barns for conversion are in good demand here,” said Sam. “The option to do the Grand Designs project is appealing for a lot of people.
“This sale was an interesting one because it initially attracted developers but, by the time all the self-builders came along, they had pushed the developers out. Those looking to develop require more of a profit margin, so they need to buy at a lower price to make a profit.
“Single units tend to sell the best; we sometimes see groups of barns. These tend to be bought up by developers, built on and then sold off.”
For Sam, location is key, and a significant rise in house prices in the region, coupled with money from those selling up in the city, has helped to realise stronger values for self-builders.
He said: “People are seeking the rural ideal and are moving out of the urban conurbations and cities. If they are selling a house in a city, they usually have the funds to buy the site and spend the £300,000 to £500,000 it typically costs to build the house. This usually means they have an asset at the end of the process, which is worth at least what they have invested in it.”
Before selling a building for development, owners are advised to seek professional advice at the beginning of the process to ensure they’re aware of the practicalities.
“Class Q has opened up opportunities for modern buildings that historically would never have secured consent to be converted into a residential dwelling,” said Nicola Quick, Rural Planning Expert at Carter Jonas.
“However, there are a number of details to be considered before applying for permission to convert a building; some agricultural buildings cannot be converted because they are not structurally capable of conversion. The location is also important – for example, you cannot obtain Class Q consent for buildings located in national parks or areas of outstanding natural beauty.
“The proposal also needs to retain as much of the existing fabric of the original building as possible and not extend it in any way.”
As well as ensuring the building in question is structurally suitable, Nicola has stressed that there are other considerations, including whether the building was in agricultural use on 20 March 2013, and whether you have used agricultural permitted development rights on the holding since that date.
“You also have to think about access, highways, contamination, noise, flood risk and whether it is practical and desirable where it is.”
Engaging an expert to secure Class Q can significantly streamline the process. Thanks to Carter Jonas expertise, Parshalls Farm received the necessary permissions in just 56 days.
“It was then sold at auction, with completion due within 28 days of the auction,” Nicola said. “It’s a very efficient way of selling off an asset and releasing funds for other projects.”
What about sale method?
Barns for conversion are sold in a number of ways, but Jack has found increasing popularity in online auctions.
Auctions offer certainty – once a reserve price is met or exceeded, contracts for the sale are deemed to have exchanged and completion normally takes place within four weeks.
During the past 20 months, online sales have been bolstered by difficulties holding in-person auctions.
“Buying online is quite new to a lot of people, but is proving popular as buyers and sellers don’t want to put all plans on hold indefinitely,” Jack said.
Earlier in 2021, Jack sold a development, which comprised several farm buildings with permission to replace them with two dwellings, for £175,000 at an online auction. A traditional barn with permission for conversion to a detached dwelling, which was offered at a guide price of £175,000, far exceeded it, selling for £230,000.
He said: “The auction method of sale is an excellent way of establishing the market value of more unique properties, including development sites such as these. Both properties have sold successfully, with one selling at the guide price and another significantly above – a classic auction trait.”
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