Equestrian property: legal issues
Backing the right horse
15 August 2014
Guy Hurst looks at the legal issues around purchasing an equestrian property and change of use
The equestrian industry is big business in the UK with around 988,000 horses and ponies costing their owners an average of £3,105 per animal per year. The industry is important to the economy, with around 5.58 million people attending race meetings and 1.2 million attending the top 10 showjumping events annually. The sector employs around 220,000 to 270,000 people and is also a major exporter.
Britain's success in the London 2012 Olympic Games made a great impact, with hobby riding now one of the most popular outdoor pursuits in the UK. With a new generation of young riders inspired, it is no wonder that finding the 'right' equestrian property attracts a premium price tag. In many areas, especially where the value of land is high, securing a property with any decent acreage will set you back a significant sum.
When it comes to equestrian property, there is clearly a large gap between a professional yard with tens of horses and a country cottage with a pony paddock for the owner's enthusiastic rider son or daughter. Buying the right property, whatever your need, is very important, but some of those needs will be the same, albeit differing in scale.
High on the wish list of professional buyers is somewhere that will provide not just a home, but also the premises from which to run their business and providing the opportunity to expand over time. It is therefore important to look at the property with planning potential in mind, because difficulties with local planning departments could easily rule the property out.
The equestrian industry is big business in the UK with around 988,000 horses and ponies costing their owners an average of £3,105 per animal per year
Over time, it is likely you may want to increase, replace or upgrade stabling facilities, build or improve indoor and outdoor schooling and exercise facilities, as well as grooming and farriery areas. You might want to add large areas of hard standing for parking and transport vehicles and for moving about the site, all-weather arenas and gallops, staff and guest accommodation, office space and, of course, lots of secure storage for tack. If you plan to host events and competitions or hire out amenities at your equestrian centre, you may need visitor facilities. You will also need to be able to store and have removed large quantities of muck each month. Access to the site for horse boxes, vehicles delivering feed and bedding and removing waste material is also really important, so consider road restrictions, including vehicle heights.
Planning, hazards, location
Security of the site as a whole is a key consideration, so having everything set around a large central yard with controlled access and all buildings close by is a high priority for many. The site may soon start looking industrial in scale and planning authorities may be wary about giving consent or allowing the change of use from a traditional farming operation. You will therefore need to work closely with them. When buying an existing set-up, ensure that all planning applications are up to date.
The quality of the land for year-round turnout is also important. As a general rule, allow half to one hectare per horse, with a clean water supply to all fields, which should be well fenced with post and rail fencing. Free-draining land on a slight slope is better than heavy clay soil, which is likely to be too wet in winterand can become rock hard in summer, causing injuries to the animals.
If you are taking over an already established equestrian business, look closely at what is included in the sale, and at contracts that may already be in place regarding liveries or animals on loan
Natural hazards can include trees and hedging that are unsuitable for horses to eat, for example oak trees and acorns. Deep ditches, ponds and rivers that are not fenced appropriately can pose danger, while ragwort in pasture land can also be fatal to horses.
Not only should this plant be treated and disposed of according to Department for Environment, Food and Rural Affairs guidelines, but it may affect plans to provide hay or hayledge for your animals. Ragwort may be a sign that pasture land has been neglected and this should be taken into account when considering suitability, because it can take years to eradicate.
In addition to the long list of property requirements, success as an equestrian business lies in being able to ride or race, so proximity to race courses and major competition venues is important. Access to off-site hacking, bridleways, common land or beaches will suit those providing livery services, riding lessons or holidays.
It is no wonder that good equestrian properties rarely come up for sale or, if they do, attract a premium. Looking therefore at the purchase of such a property, what should you consider?
Firstly, are you buying an existing business? If you are taking over an already established equestrian business, look closely at what is included in the sale, and at contracts that may already be in place regarding liveries or animals on loan. Also consider the staff employed by the business and what stock (i.e. horses) will be included in the sale. You will need a good team of professional advisers, so choose experts experienced in equine-related business sales and purchases. Accounting and VAT rules, and in particular those relating to the equestrian industry, can be difficult to navigate.
If you are planning to build a business from scratch or have simpler equestrian requirements, then what other factors should you consider? You may be planning to strike a balance between a hobby and a business. Whether you are planning to buy a property with outbuildings that can be converted or reinstated for equestrian use, or will be building everything from new, you will need to consider many of the points as a professional.
Bear in mind that the land itself may require planning permission for change of use to equestrian, if it has not been used to keep horses in the past. This is different to land that is presently designated for agricultural use and often causes severe difficulties for the unwary.
The problem hinges around the definition of 'agricultural' in relation to horses, which is not as clear cut as one might think. The rearing of horses for meat is agriculture, as is keeping horses that work on the land. The act of grazing by livestock (cattle, sheep or horses) is also considered to be agricultural, but the moment you do anything else with a horse, such as saddling it and riding it on the land or stabling it, this is classed as equestrian use, which requires planning consent. So, beware of buying a few acres of pasture land from the neighbouring farmer and assuming that your children can ride their ponies on it with impunity.
Finally, there is no particular time of year that good equestrian properties may come to the market. Do your homework and narrow down an area to suit your requirements and your budget so that you can act quickly if one does. If it is good, it will not be for sale for long.
This article is not intended to be a full summary of the law and advise should be sought on all issues.
Guy Hurst is a Partner at Adams & Remers LLP