There are some good deals to be had on farm finance
We all keep asking ourselves how much longer will it last?
That is, the Bank of England base rate which is at an unprecedented low. In 2007 at half a per cent it was believed to be a temporary feature which might last a year or two. Here we are ten years on at one quarter of a per cent, with expectations that it could last another year, a brave man might give 12 months more.
This actually means that fixed rate 30 year loans are exceptionally good value as well – even for those who borrowed five or more years ago, the deals now available do present a pleasant surprise. This is because, despite base rate remaining low, five years ago major lending banks were having difficulty sourcing funds, as a result margins were higher, and typically some loans were four per cent over base rate.
Today the Agricultural Mortgage Corporation can considerably improve on that. This is because we have seen stabilisation and settling in the market allowing more competitive deals to be offered for strong cases.
The one barrier to borrowing at present is the increasing red tape bureaucracy over Anti Money Laundering – AML - regulations, which require a much stricter approach to identity documents and clarifying the purpose of borrowing. AML is a minefield which we are leading clients through. This is particularly the case where the borrower is a trust or limited company, both of which are caught heavily by the new AML regulations.
Despite this I am pleased to say as agents for AMC at Balfours we have had a busy year and our best on record, resulting in being the top performing agent in the region. This is because our experience enables us to give quick and clear advice on AMC lending criteria.
So far this year we have already submitted a large number of applications, so there’s good reason to believe that we shall be breaking our record again for 2017, while interest rates hold at a near historic low.
As always there’s a wide range of lending purposes but we are seeing more poultry enterprises coming forward. One of the drivers for the upsurge in applications is the availability of low fixed rates for up to 30 years.
Rory Galliers MRICS FAAV is a partner with Balfours
