Racing stables/racing yards
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
The purpose of this Section is to provide a guide to the valuation of this type of hereditament for rating purposes and to explain the technical aspects affecting the occupation and running of this racing stables and racing yards. The Section should be read in conjunction with the appropriate revaluation Practice Note.
This class should be distinguished from other equestrian users, for example - riding schools, livery stables, stud Farms, stables and loose boxes, which which are dealt with by their own respective sections of the Rating Manual.
2.1 Trainers qualifications
Trainers of racehorses vary from those with a permit to train a few horses for themselves and immediate family to fully licensed trainers who may have in excess of 200 horses in training on behalf of many owners. In all cases they must satisfy the Jockey Club’s strict requirements that they are suitably qualified to train racehorses and that their premises, known as a yard, meet the standards expected for the proper care of racehorses. There is a requirement for the trainer or one of his staff to be resident on site or very close to it at all times. Without a licence or permit, a trainer is unable to enter horses for races on any racecourse.
Raceform: Horses in Training, is a useful reference book that lists all licensed racing trainers. This gives full addresses, telephone and fax numbers. As this publication lists how many horses individual trainers are responsible for at the date of publication (early March), it gives a fairly accurate guide to the likely number of boxes in each yard.
2.2 Locations
The training of racehorses stretches back over 400 years and, as the sport developed, certain locations grew as centres for the activity. The choice of locations stemmed from two main factors; proximity to racecourses and the suitability of the area for the training of racehorses, in particular the availability of suitable grass gallops. With the advent of all-weather gallops, training has changed and the need for large acreages diminished.
Historically, the main centres for training are at Newmarket in Cambridgeshire, Lambourn in Berkshire and Malton and Middleham in Yorkshire. Other areas with numerous trainers include Epsom, Cheltenham, Oxfordshire, Sussex and Wiltshire.
3.1 Stables
The stable is a very important part of any training yard. During the racing season a racehorse will usually spend the vast majority of its time stabled, from which it is exercised daily
Construction and layout of stables will vary, often within a yard. The traditional boxes will be brick built with a pitched tile roof with an overhang to provide shelter from the weather and may form four sides around an open quadrangle. Some of the older yards have what are termed ‘caged boxes’ where a run of boxes and a ‘corridor’ are within the structure of the building providing full protection from the elements but often at the expense of access difficulties. A modern version of this is the ‘American barn’ arrangement where typically a large barn will be divided up by block partitions to have boxes running the length of both of the longest walls with back-to-back boxes down the middle of the barn. These barns will often be open ended to provide the proper ventilation necessary to prevent the spreading of infections.
3.2 Comparison with Stud farms
It is important to understand that the key element for the operation of a stud farm is the availability of paddocks, not stabling. Whilst a stallion may spend a longer period of time in its stable than a racehorse, mares and foals will, except in bad weather, spend all day in the paddocks in the spring and be out at night as well in the summer and autumn. Therefore, stables are less valuable for a stud farm and the analysis of evidence supports this view by showing that stables at stud farms are often half the value of those in a racing yard. Few paddocks are found in racing yards, as they were not thought necessary in the past. However, modern training ideas use paddocks for rest and recreation to a great extent and, as such, they are a useful asset.
3.3 Gallops
The training of racehorses requires availability of suitable gallops, although it is not necessary for the training yard to own or lease gallops. In most of the main centres, substantial gallops are owned by a single estate and trainers pay a fee per horse based on usage. Many trainers do however prefer the convenience and privacy of their own private gallops, where space and costs permit. Some horses may have to walk as much as a mile to reach the gallops, but this time is useful in itself as warm-up exercise and should not be seen as a value significant disadvantage.
To the uninitiated, gallops may seem nothing more than a strip of grass which may run for a mile or more along the side of a track or road and, possibly, adjoining arable or meadow land. Good grass gallops take from 8 to 15 years to create and involve the removal of all stones or similar sharp objects. The gallops are sown with a mixture of moss and special grasses, grown to a density not found in the average garden or meadow, to provide a thick ‘carpet’ on which it is safe to gallop a thoroughbred racehorse without it risking an injury which could end its career.
There is no dispute that a good grass gallop, such as the Golden Mile at Newmarket, is the best surface on which to train a racehorse. However grass gallops can vary considerably.
On the basis that a piece of ground is not worked on two days in succession, needing 2-3 weeks to recover, the groundsman lays out a strip for use each day. Because of this a large acreage is needed.
Land which slopes slightly up hill is the best because there is less concussion on the horses’ legs and it provides progressive loading. A downhill gallop is not acceptable.
Space to “marshall” the horses before starting and room to pull the horses up after completing the work are two highly important factors.
The soil and sub-soil are very important. Clay and sand are unacceptable, a drained loamy soil being ideal. However what makes a good winter/spring gallop does not make a summer gallop where moisture retention is important. Newmarket has numerous pieces that accommodate the various seasons.
Not surprisingly, then, grass gallops require considerable maintenance including rolling and cutting and the replacements of divots. As a result, they are costly to maintain.
3.4 All-weather gallops
All-weather gallops have been in use since the 19th century, but their popularity has surged in the last 30 years or so. Although some trainers still prefer to use traditional grass gallops, there has been a steady increase in the use of all-weather gallops in recent years. Having been constantly improved over the years, they are now frequently used by top trainers, either through choice or because they have restricted access to grass gallops.
Winter weather can result in grass gallops becoming muddy due to heavy rain or, even worse, hard, due to frost, ice or snow. Similarly, they cannot be used in the summer if they lose their “give” during prolonged spells of dry weather.
The key to a successful all-weather gallop is drainage – heavy rainfall must be able to soak through the top surface without ponding – and although top surfaces vary, the basic method of construction is the same. A trench of suitable width is dug to a depth of 18” to 20” and rainwater drains installed in the bottom. On top of the drainage system is compacted a 10” layer of hard stone, as this does not break down when the all-weather gallop is in use and cause the drains to clog. A porous membrane is laid on top of the stone to prevent the top layer from mixing with the chosen top surface layer.
There are four main types of all-weather gallop top surface:
1. Sand
The best sand all-weather gallops have a top layer, about 9” deep, of special sand often containing crushed seashells. This particular mixture does not compact. Deep sand makes horse work particularly hard and is good for building up stamina and muscle.
Compaction and wind-blow are the main problems with sand gallops.
2. Wood chip
This was one of the first all-weather gallop surfaces and is still very popular with trainers, as it is kind on horses legs. Woodchip is very free draining, but daily maintenance (harrowing and rolling) is most important.
3. Fibres and/Equitrack
These are enhancements of sand gallop using fibres/oil emulsion to reduce the problems associated with sand.
4. Polytrack
A plastic particle based track, said to be easy to maintain.
It must be remembered that gallops differ. The ideal is about a mile with a steady up hill incline, although most gallops will be between 5 furlongs (1000 metres) and a mile (1600 metres).
All-weather gallops will vary from trainer to trainer, depending upon the amount of land available and the nature of the terrain.
Some trainers may use a homespun arrangement of rotivated sandy land. This is generally unacceptable, often dangerous and of little modest value, when compared to better quality examples.
The valuation of all-weather gallops within the same hereditament as a racing yard, should be based on a percentage of prevailing box prices within the locality. Class coordination members must be approached for advice on appropriate levels of value.
3.5 Common ancillaries
All but the smallest of yards will have a range of ancillary buildings that will include a tack room, feed store and hay store.
A secure tack room is essential for the safe-keeping of saddles, related equipment and racing silks. In larger yards there may well be more than one tack room and separate rooms for rugs, blankets and silks. Similarly, there are usually laundry and drying rooms in larger yards.
Every yard will have a feed room for the storage and preparation of the special feedstuffs that are necessary for a racehorse’s well-being. The diet of each horse has to be strictly controlled to ensure that it does not consume any illegal substances that might cause it to fail a ‘dope’ test. Such tests are carried out on all winning racehorses (and on others randomly), so records and samples of feedstuffs must be kept securely.
Whilst in a small yard the training operation may be run from a room in the trainer’s residence, many yards have a separate office. There is an enormous amount of administration involved in running a racing yard including the making of entries, declarations to run, the booking of jockeys to ride the horse and the making of arrangements for the transportation of horses to courses which may be anywhere in Britain, Ireland, the rest of Europe, America or even Australia and the Far East.
Many yards will have CCTV or other security systems installed for monitoring the health and well being of the horses as well for security protection.
4.1 Horsewalkers
It is commonplace for yards to use automatic horse-walkers, allowing numerous horses to be exercised at the time whilst saving on labour costs. Generally these are circular enclosures between 10m-20m diameter and must have a stabilised base (often concrete) for the horse to walk on; they may have permanent walls and a roof, and ‘paddles’ on the rotating arms to ensure that the horse moves around the walker. They are built in various sizes and designs but all operate by means of an electric motor that is designed to cut-out in the event of the horse stopping. Horsewalkers with an earth base and rotating arm gear from a central electric motor will probably be modest in value terms, but those with a concrete base do have demonstrable value. The electric motor and turning frame are not rateable.
4.2 Barns – schools
Some trainers have utilised large old agricultural barns and turned them into ‘indoor schools’ in much the same way as riding school operators. They are used by trainers for ‘breaking-in’ young horses, familiarising them with starting stalls or light exercise following injury. As such, they are not likely to be used very often and their value is considerably less than a similar building used by a Riding School.
4.3 Purpose built indoor arenas
Generally about 800m2 in size, portal frame construction under an asbestos or profiled metal sheet roof, probably with slatted sides and kick boarding to 1.8m height. Most will have basic lighting and a sand or equitrack base. Some may have sprinkler or other watering facilities. Value varies depending on the quality of the building.
4.4 Covered rides or canterways
These provide a covered all-weather ‘gallop’ or canter of at least 300 metres and are usually circular or oval in shape. The length will govern the speed at which horses can be exercised so in most cases they will only be used for light canters. They are a useful facility for horses returning from injury, horses that have to be worked alone and when the weather is appalling.
Typically, a canterway would be 4m wide with a mono pitch canted roof, kick boarding to 1.8m both sides, and with a 2m Perspex type draught excluder to give protection from the wind. A basic standard track will be sand base, but the better tracks are now surfaced with Equitrack. Such covered rides will usually be illuminated, and some are watered with permanent sprinkler systems.
4.5 Equine swimming pools
As an addition to grass and all-weather gallops, swimming pools provide a valuable alternative means of getting horses fit. They are especially useful in the case of horses returning from leg injuries.
One type provides a simple underwater treadmill, which the horse is led into and allowed to walk on, thereby limiting the strain on its legs due to the reduced effective body weight. This will be no more than 10 metres long, including ramps at either end, so it can be housed in a relatively small building.
More substantial pool comprises a ramp down into either an circular or oval shaped pool, where the horse can swim assisted by stable hands on each side. Not surprisingly, these pools require a much larger building and will be more expensive to build.
It is expected that sufficient direct evidence exists in the main training areas to enable valuations to be carried out on a rentals basis.
Racing yards will generally comprise stables of varying types of construction - brick, block or timber - but analysis of evidence for recent Revaluations has failed to show any significant differences in value for construction types.
5.1 Analysis of Evidence
The analysis of evidence should be on an all inclusive basis, to reflect tack rooms, food stores, and hay barns within box prices. Where any non-standard features exist, such as disproportionate sized offices or hospitality suites, these must be stripped out before the adjusted rent is divided by the number of stables.
The two main problems in analysis are the approaches to stripping out or apportioning the rent/value relating to domestic accommodation and areas of land.
As mentioned above (2.1), the trainer or a member of his staff must reside on the premises, so it is not surprising that yards are often let including one or more dwellings. From the trainer’s point of view, the most important aspect is the number of stables which are available to him and, therefore, the size and quality of the residence is of secondary importance. Valuers should be aware that stripping out the full rental value of domestic accommodation (if based on other non-composite dwellings within the locality), may not be appropriate.
Apart from the land upon which the yard stands, it is rare to find any substantial areas of land with a racing yard, except in the case of some of the large historic training centres. These are usually freehold occupations so the problem is unlikely to arise. However, where there is land with a yard, Valuers should again resist attempts to strip out at alternative use values or full open-market values. As with the living accommodation, the rents should be apportioned on a fair and reasonable basis.
It is recommended that advice on analysis and adjustment is sought from the Class Coordination Team where rents include amounts for domestic accommodation or land.
1. Market appraisal
1.1 Horse racing continues to be popular, although within the UK the industry is impacted by a relatively small-scale prize fund when compared to other countries such as Ireland and France. New statute has gone some way to addressing this in that the Horserace Betting Levy Regulations 2017 (SI2017/589) introduced a revised levy system taking effect from 25 April 2017, which increased prize money in 2018 to £160 million, from £95 million in 2012. This legislation ensures previously lost revenue is now captured from bets placed online and offshore, which will benefit all those involved with the sport including trainers who typically receive a percentage of winnings. Increased returns are being targeted on the lower and middle tiers of the sport.
1.2. In recent years physical attendance at race meetings has been adversely impacted by imposed COVID restrictions. However, the popularity of online betting continues to increase with statistics showing continued growth since the last Antecedent Valuation Date.
1.3 The industry reports a gradual decline of the numbers of horses in training, stating a reduction of around 2.5% per annum over the last 5 years, which is in part due to competition from a highly competitive entertainment sector. This change in demand impacts both horse racing and breeding operations.
1.4 Approximately a third of Britain’s trainers are based in or around the major training centres of Newmarket, Lambourn, Epsom, Middleham and Malton. These locations are extremely reliant on the industry in terms of both direct and indirect employment. There is evidence of continued investment to improve facilities within these major centres. Significant foreign investment from the Middle East continues, particularly in and around Newmarket, with such facilities normally being large scale and of a high standard.
1.5 Yards located outside these centres are less likely to have benefitted from such improvements and have restricted access to communal facilities such as public gallops or on-site veterinary services. The additional cost of transportation and other disadvantages should also be considered when valuing remote sites.
2. Changes since the last practice note
2.1 There are no significant changes in approach, although to ensure consistency across the network, it is vital that advice is sought from CCT members when undertaking adjustment and analysis of rental information.
3. Ratepayer discussions
3.1 Ongoing discussions are taking place with industry representatives.
4. Valuation scheme
4.1 There is no agreed scheme for this class.
4.2 Box (or stable) values are determined by prevailing rental levels within any locality and are generally used as a ‘unit of comparison’ for yards where no direct rental evidence exists. It is acknowledged that in some regions outside the major training centres, rents may be limited or require such significant adjustment to hold little weight. It is therefore vital that initial analysis and adjustment is overseen by the Equine Class Coordination Team.
4.3 Box values reflects the presence of a number of other additions such as tack rooms, trainers offices, workshops, stores and hay barns as these are required for any yard to operate but do not generally tend to add to the value. Additional facilities that improve the yard as a training enterprise should however be valued, these will include horse walkers, gallops (all weather and grass), equine pools and buildings housing treadmills (not this is not an exhaustive list and guidance should be sought from the CCT in case of queries).
4.4 To ensure consistency, advice should be sought from the Class Coordination Team on appropriate deductions to be made when stripping out domestic accommodation for the purposes of rental analysis. In order for a trainer to be granted a license, there is a requirement for either them/ or a nominated responsible employee to either live on site or within close proximity of the racing yard. Information should be sought the type/ style of dwelling occupied as it could potentially range from a mobile home to a substantial dwelling. Details should also be sought as to other accommodation on site, such as groom’s quarters.
4.5 For analysis purposes, land rental values should be adopted within the range of £150 to £400 per acre. Regard should be had to local demand, size and quality (for example sloping site/ suitability for grazing). Conversely for valuation purposes, where such land is used as grazing/ pasture, it will be treated as exempt under Schedule 5 of the Local Government Finance Act 1988.
4.6 Values for private gallops (as opposed to public/ shared facilities) should have regard to prevailing box values, which reflect location differences as determined by the Upper Tribunal (Lands Chamber) in Hobbs v Gidman (VO) [2017]. Values are dependent on the type of surface, which ranges from grass to all-weather poly-track. Advice must be sought from Class Coordination Team members in this aspect.
4.7 National tables for ‘other additions’ not reflected within box prices, have been devised to ensure consistency. Values are based on replacement costs, then amortised to produce an annual equivalent. It is acknowledged however that in limited circumstances further adjustment may be required to reflect quality and other specific factors.
4.8 Class Coordination Team members should be approached when dealing with both Check, Challenge, Appeal and maintenance work on this class.
1. Market appraisal
As an industry horse racing has weathered the worst effects of the economic downturn. This is due in part to the loyal racing fraternity, in addition to the fact that British Racing has extended links with the betting industry, broadcasting and sought improved sponsorship deals. An increased use of media and ‘on line betting services’ has attracted new customers into the sport as an alternative to the more traditional betting shops or ‘race day meetings’.
Since 2008 the number of professional licensed trainers in Britain has decreased by approximately 6% to current levels of around 550. This number is supplemented by over 100 registered ‘permit holders’ who train on a more amateur basis, often for Point to Point or hunter chase contests.
The number of horses in training has declined from a peak of 15,349 in 2008 to present day levels of 13,716. This is accords with the reduced numbers of owners which has dropped 14% since 2008. As a result of the economic downturn, sole ownership of racehorses has dropped. The largest decline is of owners with one or two horses in training, research shows that owners at the upper end of the scale (with multiple horses in training) are more resilient to the economic downturn. Shared interests, or syndicates/ racing clubs now form 60% of all racehorse ownership - which has the benefits of sharing expenditure across a number of individuals.
These reduced numbers clearly have an adverse impact on the number of racing yards and the commercial viability of those remaining. Numbers of yards training more than 100 horses have remained relatively static and in many cases increased their number of horses. Conversely smaller operations which often rely on other forms of income to supplement revenue, such as agriculture are relatively unchanged. It is the mid-ranking yards which have suffered most from the effects of the recession. To reduce costs, many of these have now amalgamated and share facilities/ staff etc.
Approximately a third of Britain’s trainers are based in or around the major training centres of Newmarket, Lambourn, Epsom, Middleham and Malton. These centres are extremely reliant on the industry in terms of both direct and indirect employment. Significant investment has been made over the last decade to improve facilities within these major centres.
Yards located outside these centres are less likely to have benefitted from such improvements and have restricted access to communal facilities such as public gallops or on site veterinary services. The additional cost of transportation and other disadvantages should also be considered when valuing remote sites.
2. Changes since the last Practice note
There are no significant changes in approach, although to aid consistency across the network, advice on analysis and adjustment is reemphasised within Section 4 of this practice note.
3. Ratepayer discussions
Discussions are taking place with industry representatives and further advice will be issued if there are significant developments to report.
4. Valuation scheme
There is no agreed scheme for this class.
The purpose of this practice note is to provide costing information and other valuation material appropriate for this class of property in respect of the R2017 Revaluation. This PN should be read in conjunction with the main section.
For analysis purposes, land rental values should be adopted within the range of £120 to £200 per acre. Regard should be had to local demand, size and quality (for example sloping site/ suitability for grazing).
Recently acquired evidence in respect of gallops supports significant increases for this element of the valuation compared to levels of value typically applied in the 2010 Rating List. Gallops should be valued in accordance with the ‘2017 Cost Guide’. The resultant cost should then be amortised at 4.4% for England and 3.8% in Wales, as an interim measure until the higher decapitalisation rate for R2017 is known.
When stripping out residential accommodation for analysis purposes, it is incorrect to deduct the full ‘open market value’ of comparable dwellings. An adjustment is required to reflect that rent paid on the domestic part will be lower as it forms part of a larger commercial operation. Moreover, any comparable residential rent will not be arrived at on the same basis i.e. residential lettings require the landlord to carry out external and internal repairs, regular inspection of electrical and gas installations and higher landlord’s insurance costs.
In the absence of better evidence a judgement needs to be made on the facts of the amount to be deducted from the residential element, to reflect any disadvantage of being sited within a commercial operation, for example a 50% deduction may be appropriate. This should reflect these matters together with any planning restrictions in place or noise/ disruption from the adjacent commercial activity.
It is acknowledged that in some locations rental evidence may be limited or require significant adjustment for this class. To ensure a consistent approach across the network, analysis and adjustment has been undertaken by the Class Coordination Team.
The unit CCT member should be approached when dealing with both maintenance and settlement of this class.