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Ask the expert by Charlotte White, Balfours Associate Land Agent

We are considering borrowing expand the farm business. Do I need to get the farm professionally valued first?

You probably have a rough idea of the farm’s value, sufficient to open discussions with the bank but they won’t consider significant finance without a current valuation of business assets. Such a valuation can be the basis on which to make major strategic planning decisions and provide a format and structure from which the foundations of a business plan can be accurately drafted.

Formal valuations for the bank, are usually prepared by an RICS Registered Valuer working to RICS rules and regulations - known generally as the ‘Red Book.’  As a RICS valuer we are methodical and structured in our approach to ensure your valuation is a fully informed, current and accurate reflection of your assets. Red book valuations are also needed for probate and taxation, or whenever you look to pass on an asset.

The question doesn’t indicate the size of the farm, but as an example, the average 300 acre equipped arable farm will demand some 8-10 hours of professional time spent inspecting the property, undertaking desktop research and gaining market evidence; add to this desk top research and administration.  Such expense could help to avoid significant later problems should the valuation be challenged.

Our report which is likely to run to some 30 pages, is justified and supported with sound evidence, all of which must be recorded and itself represents a weighty file.

Never underestimate the value of a valuation. Future generations are likely to thank you for taking time to take stock of your business, rather than just “running” it. Charlotte White BSc (Hons) MRICS FAAV, This email address is being protected from spambots. You need JavaScript enabled to view it.


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