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An Agricultural Restriction, which is also known as an Agricultural Planning Restriction, is a freehold covenant that restricts occupancy to those whose main occupation is in some form of agriculture, for instance forestry or farming.
Here we explain in more detail what Agricultural Restriction is, how it works, Section 106, how much you might be able to borrow on a property with an Agricultural Restriction, and how we may be able to assist you with an Agricultural Restriction Mortgage.
Table of Contents:
So, as mentioned previously, an Agricultural Restriction or Agricultural Planning Restriction is a freehold covenant that limits ownership to people whose primary occupation is in some form of agriculture such as farming or forestry. This can be on an employed or self-employed basis, or the owner can have previously been employed in agriculture.
In order to comply with the Agricultural Restriction, the owner must generally satisfy certain criteria, and should either be employed in, or retired from the agricultural or horticultural industry within a thirty mile radius of the property; or be using the land at the property to provide the owner's main source of income.
The social and economic changes following the Second World War saw an increase in homeownership, and properties built on farmland were granted local authority planning permission, subject to an agricultural restriction.
Over half a century later, the agricultural industry has substantially declined, and as a result it can be difficult for owners whose properties are subject to an Agricultural Restriction to find buyers who nowadays qualify to occupy the property.
The lifting or modification to the covenanted restriction has to an extent in some cases, resolved this difficulty. However, these changes can only be made by application to the courts, or the local council's planning authority.
Nowadays an Agricultural Restriction is often linked to a Section 106 obligation.
Section 106 (of the Town & Country Planning Act 1990, as amended by the Planning & Compensation Act 1991) provides that persons interested in land in the area of a local planning authority are able to enter into an agreement, known as a Section 106 planning obligation.
In summary, the Section 106 obligation restricts the development or use of the land in any specified way, and may require specific operations or activities to be carried out, or require the land to be used in a specific way.
One of the benefits of an agricultural restriction on a property relates to Inheritance Tax (IHT) planning, because agricultural property relief may be available under the IHT rules.
Firstly, yes Shire Direct may well be able to assist you! Regrettably, few lenders are prepared to provide mortgages for properties having an agricultural occupancy restriction. However, here at Shire Direct Mortgages, our lending panels do cater for this type of property, although generally the maximum loan to value that the lenders are usually prepared to advance is 75% of the property value (taking into account the agricultural occupancy restriction).
Hopefully we've managed to answer any initial questions you may have had with regards to Agricultural Restriction and mortgages. If you think we can be of further assistance, why not talk to one of our professionally qualified Mortgage Advisors here at Shire Direct. Our Freephone telephone lines 08000 282 281 are available seven days a week from 8am until 10pm. Or, why not enquire online at any time. In either instance we'll be delighted to provide you with an in-principle decision - whatever your circumstances.
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
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