Agricultural Tie Mortgages: Section 106 and Occupancy Conditions

An agricultural tie — formally known as an Agricultural Occupancy Condition or AOC — is one of the most restrictive planning conditions that can be attached to a rural property. It limits who can live in the property to people who work (or have recently worked) in agriculture or forestry. If the property you are looking at has one of these conditions, it will affect both the pool of people who can legally occupy it and your ability to get a mainstream mortgage.

What Is an Agricultural Tie?

Agricultural ties originated from planning policy designed to allow essential rural workers to live close to where they work. Planning permission for a house in open countryside is normally refused in the UK — the planning system presumes against development outside settlement boundaries. The exception is when a dwelling is genuinely needed for an agricultural or forestry worker.

When planning permission is granted for such a dwelling, it almost always comes with an occupancy condition — the agricultural tie. This condition is attached to the land, not the person, meaning it runs with the property regardless of how many times it changes hands.

Typical Wording

The exact wording varies but is usually along these lines:

"The occupation of the dwelling shall be limited to a person solely or mainly employed, or last employed, in the locality in agriculture or in forestry, or a widow or widower of such a person, and to any resident dependants."

Some older conditions use slightly different language, and some are worded more broadly — for example, extending to rural businesses beyond strictly agricultural use. The exact wording matters enormously when assessing eligibility and the prospects of removal.

Section 106 Agreements

A Section 106 agreement (under the Town and Country Planning Act 1990) is a legal agreement between a developer and a local planning authority, secured against the land. Agricultural occupancy conditions are sometimes implemented through Section 106 agreements rather than as a condition on a planning permission — the legal effect is similar, but the process for removal differs.

Other types of Section 106 obligations that affect property include:

• Affordable housing requirements: requiring units to be sold or let below market value to eligible households
• First homes scheme obligations: restricting sale to first-time buyers with income caps
• Key worker restrictions: limiting occupation to certain public sector workers

Any of these can affect mortgageability for the same fundamental reason as agricultural ties — they restrict the pool of eligible buyers and therefore the lender's security.

How Agricultural Ties Limit the Buyer Pool

The practical effect of an agricultural tie is that it dramatically reduces the number of people who can legally occupy the property. At any given time, the eligible pool of buyers in a given locality includes:

• People currently employed in agriculture, horticulture, or forestry in the area
• People who were last employed in those industries (the tie typically covers "last employed")
• Widows and widowers of qualifying workers
• Resident dependants of the above

In practice, this can mean a very small number of eligible buyers. In areas where farming is declining, the pool may be even thinner. Estate agents often find that properties with agricultural ties sit on the market for extended periods because so few buyers qualify.

Impact on Value

The restricted buyer pool has a direct effect on value. Properties with agricultural ties typically sell at a significant discount compared to equivalent unrestricted properties — the discount varies but is commonly:

• 25–50% below open market value for properties in genuinely rural locations
• Potentially less in areas where agricultural employment is relatively common
• More in areas where the tie is effectively impossible to satisfy honestly

This discount is the market's way of pricing the restriction. It is not just theoretical — if a property is marketed at full open market value, buyers who are not eligible cannot legally purchase it, and those who are eligible have a limited number of competing buyers to bid against.

Getting a Mortgage on a Property with an Agricultural Tie

The Mainstream Lender Position

Most mainstream mortgage lenders will not lend on a property subject to an active agricultural tie. Their concerns are:

• Restricted resale market: If they need to repossess and sell, they can only sell to eligible occupants
• Depressed value: The tied value is lower than open market value, giving less security
• Compliance risk: Lending to a non-qualifying occupant is financing a potential planning breach

Specialist Lenders

Some specialist lenders and rural building societies will consider lending on properties with agricultural ties, but only where:

• The borrower clearly qualifies under the tie (employed or recently employed in agriculture or forestry)
• The income from farming or rural employment is sufficient to service the mortgage
• The valuation is based on the tied value, not the open market value

The number of lenders willing to consider this is small. Rates will typically be higher than standard residential products, and the loan-to-value available may be more restrictive.

The Agricultural Borrower's Position

If you are a farmer, farm worker, forester, or rural industry worker who genuinely qualifies under the tie, your situation is more manageable. You can approach specialist lenders who understand the agricultural sector, and some rural building societies have specific experience with these properties. The challenge is that you may still face a restricted LTV and the tied value will affect how much you can borrow.

Applying to Remove an Agricultural Tie

The most significant option for owners or prospective buyers of tied properties is to apply to the local planning authority to remove or relax the agricultural tie. If successful, this converts the property to an unrestricted dwelling — typically producing a substantial uplift in value and full mortgageability.

The Test for Removal

Local planning authorities assess removal applications against one primary question: is there still a genuine agricultural need for the dwelling in the locality?

This is tested by examining:

• Current agricultural employment in the area: How many people are employed in agriculture and forestry locally? Is the number declining?
• Evidence of marketing: Has the property been genuinely marketed to agricultural workers? If so, for how long, and what response was received?
• Vacancy history: Has the property sat empty or been occupied by non-qualifying people for an extended period without enforcement action?
• Change in agricultural character: Has the nature of farming in the area changed such that the original need no longer exists?

The Marketing Exercise

In most cases, the planning authority will require the applicant to demonstrate that the property has been genuinely marketed at a price reflecting the tied value, specifically to people who would qualify under the condition, for a period of time (typically 12–24 months) without finding a qualifying buyer.

This marketing exercise is important. It is not simply placing the property on Rightmove at full price — it means:

• Advertising in farming press and on agricultural property platforms
• Setting a price that reflects the tied value (not open market value)
• Accepting that the marketing period will be long
• Documenting all viewings and offers received (or lack thereof)

Professional Representation

Applications to remove agricultural ties should be handled by a planning consultant with experience in rural planning policy. The application requires:

• A planning statement setting out the case for removal
• Evidence of the marketing exercise
• Evidence of the agricultural context (employment data, farm size changes, etc.)
• Often, a supporting letter from an agricultural consultant confirming the absence of need

Costs for a removal application typically include:

• Planning application fee: around £234 (2026 rates)
• Planning consultant fees: £2,000–8,000 depending on complexity
• Agricultural consultant fees: £500–2,000
• Solicitor costs: if there are title complications

Success Rates

Success rates vary significantly by area and application quality. In areas where agriculture is genuinely declining and the marketing exercise shows no qualifying interest, removal applications have a reasonable prospect of success. In areas with active farming communities, local authorities are more likely to resist removal.

Overall, removal applications where there has been a genuine 12+ month marketing exercise at the tied value, with little or no qualifying interest, have historically had relatively good prospects. Where the marketing is brief or the price has not been genuinely pitched at tied value, applications tend to fail.

Appeals to the Planning Inspectorate are available if the local authority refuses, and inspectors have sometimes overturned refusals where the evidence of lack of need is compelling.

Timelines

• Planning authority decision: 8 weeks for straightforward applications, often longer for complex rural cases
• Marketing exercise: 12–24 months before applying, in most cases
• Appeal (if required): 6–18 months additional
• Total from start to unrestricted property: commonly 2–4 years

Value Uplift from Removal

The financial upside of successfully removing an agricultural tie can be very significant. As noted, tied properties typically sell at 25–50% below equivalent unrestricted values. Removal effectively unlocks that discount.

For example, if an equivalent unrestricted rural cottage would sell for £400,000, the same property with an agricultural tie might sell for £220,000–300,000. Removal of the tie could increase the value to near full open market levels, producing an uplift of £100,000–180,000 on this example.

This uplift is why some buyers deliberately seek out tied properties with a view to applying for removal — the discount on purchase can exceed the costs of the removal process if successful. However, this approach carries risk: removal is not guaranteed, and the property remains restricted (and harder to mortgage) until the tie is formally removed.

Section 106 Agreements: A Note on Removal

Removing obligations under a Section 106 agreement is possible but follows a different legal process from removing a planning condition. After five years from the date of the agreement, an applicant can apply to the local planning authority to modify or discharge the obligation if it is no longer necessary or relevant. This is under Section 106A of the Town and Country Planning Act 1990.

The test is whether the obligation continues to serve a planning purpose. For agricultural occupancy conditions implemented through Section 106, the same arguments about lack of agricultural need apply. The process requires legal advice and is typically handled by a solicitor alongside a planning consultant.

The Bottom Line

Properties with agricultural ties or restrictive Section 106 conditions are among the most complex in the UK property market. They are not necessarily bad investments — the discount can be substantial, and removal is achievable in the right circumstances — but they require careful legal and planning advice from the outset.

If you are a qualifying agricultural worker, the options are broader than for a buyer who does not qualify. If you are considering buying with a view to removing the tie, take planning advice before you commit.

This is educational content, not financial or planning advice. Your situation is unique — speak to a qualified mortgage broker, planning consultant, and solicitor before making any decisions.