Farmers borrowing to buy land

FARMERS ARE starting to borrow more to finance their core businesses as the implications of CAP reform become clearer, according to Abbey‘s banking and mortgage manager Andrew Stanley.

“During the first part of the year we were doing a lot of lending for diversification and things on the fringes of agriculture, like equine and fishing projects,” he said.

“But certainly in the last two months we have seen more lending for pure farming activities.”

However, Mr Stanley said the limited availability of farmland meant most of the lending was not for large farm purchases but small parcels of extra land.

“The 25% decline in the amount of land being sold this year obviously impacts on us as lenders.”

A further expected hike in interest rates probably would not dampen enthusiasm, said Mr Stanley who was more concerned about falling cereal prices.

The Country Finance department of Abbey is to be rebranded as Rural Mortgages following the sale of its asset finance and leasing businesses in June.

Mr Stanley said it would be business as usual for the bank‘s existing customers.