Equestrian occupancy restrictions: your guide to tied properties

By Carla Passino on |

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The house looks perfect: swish yard, professional manège and a decent price. But then you look at the small print and you read that it is subject to an equestrian occupancy restriction. Should you buy it? Or will it be a costly mistake?

Occupancy conditions restrict the occupation of a house to people “wholly, mainly or last employed” in a specific industry, usually agriculture or forestry, or their widowed spouse and dependants. Placed by the local council when granting permission for a new build, these ties were first introduced in 1948, when planners sought to limit development in the open countryside while still allowing farmers to build themselves a home on their land. Since then, many restrictions have been widened or changed to include equestrian activities, which don’t fall under the definition of agriculture.

Unfortunately, the wording of equestrian occupancy ties can vary wildly from area to area. “Every council words differently and polices differently,” says William Grant of Fox Grant, a specialist equestrian agent who often sells tied properties such as Kingfisher Equestrian (pictured), a 35-acre home with American barn stabling, indoor school and international size arena that is subject to an agricultural, forestry or equestrian occupancy tie (£1.4 million through Fox Grant).

Some clauses, explains Grant, “only require the keeping of horses or be retired from an equestrian business,” while others can be incredibly specific. Generally, though, people who work full time in the industry, whether as trainers, breeders or livery yard owners, should meet the criteria for most ties. It can sometimes be trickier when a household has more than one source of income—for example if someone runs a livery business but the main breadwinner is employed in another sector. As a rule of thumb, Grant explains, “most parties will qualify as long as they can make a profit of £15,00-£20,000 per annum from their equine business.”

Nonetheless, it is always best to get solid advice from an experienced solicitor or planning consultant, who can help unravel the exact meaning of the restriction and check whether you comply. If in doubt, it’s also worth trying to speak to the local planners themselves prior to committing to buy the tied property.

The good news is that, if you do comply with an equestrian occupancy restriction, you will pay less for your property than you would have done for a similar one with no tie. Occupancy conditions tend to reduce values by 10% to 15%, depending on a house’s location and quality, and on the state of the market. The flipside of this, however, is that, when you go and re-sell your tied property, you too will have to settle for a lower asking price because your house will appeal to a smaller pool of buyers. The key to selling well, Grant advises, is to “get an experienced and knowledgeable agent to value and price realistically at, say, 85%-90% of the open market value, depending on how restrictive the tie’s wording is.”

Unless you manage to get the occupancy clause lifted before reselling, that is. Having a restriction removed is no easy feat and requires proving to the council that there is a lack of need for a tied property in the area. “It depends on how old the tie is and, again, on the wording,” says Grant. “It will take 12 months and cost £2-£5,000 but will add 5-10% to your property’s value.” The process often requires putting the property on the market for a period of time and showing that no one has come forward to buy it.

A more common, but dicier method is to try and obtain a certificate of lawful use. This happens when someone who does not comply with the tie has been living at the property for an uninterrupted period of ten years and can demonstrate this to the local authority. The burden of proof is on the applicant so good records are crucial. However, don’t be tempted to buy a tied house in the hope you may live there in breach of the condition for ten years—local authorities can and do enforce restrictions on a regular basis.

That said, it’s important to note that an equestrian occupancy restriction only applies to occupation, not ownership.  You can still purchase a tied house even if you work in another industry, so long as the people who occupy it are employed in the equestrian sector—for example, you could let it to a stud or a riding school.

Complying with a tie, however, is only half the problem. Often, says Grant, the biggest hurdle is funding the purchase of a tied home. “Only about three to five finance houses will lend money,” he cautions. You should always talk to specialist lenders, who are more familiar with—and less scared by—restrictions. Plus, adds Grant, you should ensure your loan-to-value ratio—the amount you are borrowing compared to the total value of the property—is low: “It should not be more than 50-60% of purchase price.”

 

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