Mortgage Glossary: Agricultural Restriction

Agricultural Restriction

Also known as an Agricultural Planning Restriction. This a freehold covenant that restricts the occupancy of a property to those engaged in agriculture. In order to comply with this restriction the owner should fulfil one of the following criteria:

be employed in horticulture or agriculture in a 30 mile radius of the property.
be retired from horticulture or agriculture within a 30 mile radius of the property.
be using the land at the property intensively to provide your main source of income.

Many properties built on farmland in the immediate aftermath of the Second World War were given planning permission subject to an agricultural restriction. This can mean problems when the occupants come to sell the property. The farming population has shrunk dramatically in the last five decades and it can be difficult to find buyers. However, in some cases the covenanted restriction may be lifted or modified by application to the courts or the local council's planning authorities.

An agricultural restriction may run in tandem with a Section 106 obligation. Under section 106 of the Town and Country Planning Act 1990, as amended by the Planning and Compensation Act 1991, any person interested in land in the area of a local planning authority may, by agreement or unilaterally, enter into an obligation (commonly known as a section 106 planning obligation):

restricting the development or use of land in any specified way;
requiring specified operations or activities to be carried out on the land;
requiring the land to be used in any specific way;

Agricultural restrictions may have inheritance tax planning implications given the agricultural property reliefs that are available under the IHT regime.

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