Riding schools and livery stables
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
Background
Although they are currently covered by one Special Category (SCAT) Code, strictly speaking there is a distinction between riding schools and livery stables. In practice however there is often an overlap or mix of use.
1.1 Livery Stables
A livery stable as a business concern offers facilities for owners to stable their horses, often offering the following options:
- full livery - the horse is stabled, fed, watered, groomed, mucked out and exercised by the proprietor of the livery yard.
- part livery - the horse is provided with stabling, but the owner might undertake to exercise, groom, or muck out and feed, in any combination.
- stabling only (often referred to as DIY livery) - the horse is stabled, but the owner is responsible for doing everything else.
Additionally, a livery stable proprietor might keep hirelings (horses hired out to clients for hunting or hacking); may offer hay or straw for sale; offer horse transport for hire or may provide schooling or tuition. It is in this latter aspect where the use of a livery stable and that of a riding school begin to overlap. Where there is a mixture of these two functions in large establishments, they are often called “equestrian centres”.
1.2 Riding schools
A riding school generally operates on the basis of hiring out horses or ponies on a pay per hour basis typically:
- Clients go out together on a ride accompanied by a member of staff.
- More experienced riders may go out in groups or alone.
- Clients receive tuition, either individually or in groups, from a member of staff, either in an indoor school or outdoor arena (menège).
The types of hereditament are diverse: ranging from small establishments in converted farm buildings occupied together with small areas of land, to much larger premises with purpose-built stables, indoor or outdoor schools and, sometimes, cross-country courses.
Some riding school enterprises may possibly have begun as a paying hobby, using formerly exempt agricultural buildings. With the passage of time, the more successful ones could develop into more extensive enterprises and might only be at this stage that they come to the attention of VOs and the resulting assessment entered into the rating list.
The Riding Establishments Acts 1964 & 1970 require a licence to be issued by the Local Authority (Environmental Health Officer) before an establishment where horses are kept for hire or reward can be operated. The Acts apply to riding schools, equestrian centres and trekking centres, but do not apply to livery stables.
The Acts are primarily concerned with horse welfare and have particular regard to the suitability and qualifications of the proprietor in this respect. However, both Acts also have regard to the provision of adequate pasture and accommodation.
Section 2(b)(iii) of the 1970 Act requires:
“that there will be available at all times, accommodation for horses suitable as respects construction, size, number of occupants, ventilation, drainage and cleanliness and that these requirements be complied with not only in the case of new buildings but also in the case of buildings converted for use as stabling”.
3.1 Buildings
It was confirmed in the appeals of Hemens (VO) v Whitsbury Farm and Stud Ltd (1988 RA277HL) that horses and ponies, other than those used for farming the land or reared for food, are not “livestock” within the definition in Section 1(3) Rating Act 1971, now paragraph 8(5) of Schedule 5 to the Local Government Finance Act 1988 (LGFA ‘88).
This means that loose boxes stabling horses used for riding and ancillary buildings, such as tack rooms, feed stores etc, are not “agricultural buildings” (as defined in Schedule 5) and are therefore rateable.
However, there may be parts of the property which are used for an exempt purpose, an example being a hay barn used either to store a hay crop taken from the land occupied by the riding school proprietor or to store hay solely for livestock (other than the riding school horses) which are also kept by the proprietor of the riding school enterprise. Conversely, a hay barn will be rateable if it is used to store hay to feed the riding school horses. Exemption will not just apply to a whole building but also to a separate part of a building that is solely used for an exempt purpose.
If there is property which is used wholly for exempt agricultural purposes at certain times of the year and wholly for non-exempt purposes at other times, provided all the parties are agreeable, there is no objection to VOs agreeing a level of assessment which reflects the proportion of time used for exempt purposes to non-exempt purposes throughout the year, although the technically correct approach must be to alter the list each time the circumstances change.
3.2 Land
“Agricultural land” is defined in paragraph 2 of Schedule 5 to LGFA ’88. This definition includes:
“Land used as arable, meadow or pasture ground only.”
However, paragraph 2(2)(d) of Schedule 5 goes on to state that agricultural land does not include:
“Land used mainly or exclusively for purposes of sport or recreation.”
The tension between these two requirements is explored more fully in Rating Manual Section 6: Part 6; Part D.
In short, land used only for the grazing of horses should be treated as “agricultural land” within the meaning of paragraph 2(1)(a) of Schedule 5.
There may be varying degrees of use in addition to grazing use that will not always lead to rateability. Where grazing land is used for the temporary erection of jumps for occasional casual recreational use, this should not affect exemption, but land used as a permanent outdoor exercise area does not fulfil the definition of use as “arable, meadow or pasture ground only” and will be rateable.
3.3 “Disabled Persons” Exemption
Some riding schools are used in connection with Riding for the Disabled Association (RDA), providing an opportunity for disabled people to either ride or drive horse-drawn vehicles.
Whilst it is considered that the provision of riding facilities for disabled persons could qualify premises for exemption under provisions of paragraph 16 of Schedule 5 to LGFA ‘88, this will only apply to property used wholly for the exempt purpose. This will require there to be clearly identifiable parts of the hereditament which are wholly so used. The technical issues surrounding exemption under paragraph 16 are explored more fully in Rating Manual section 6: part 6 - part A.
If property is used for both qualifying and non-qualifying purposes on the same day then such areas will not be exempt.
3.4 Stud relief
Where a riding school or livery yard is also used for breeding and/or rearing of horses and/or ponies, the rate relief for stud farms may be appropriate, providing the statutory conditions are fulfilled in regard to those parts used for this purpose.
Guidance on the application this stud farm relief is given in Rating Manual section 6: part 3 - section 1005 - stud farms.
The relief will only apply to the buildings directly related to the stud use such as the appropriate number of stables or loose boxes, foaling boxes and stallion boxes.
Where such buildings are used at certain times of the year for stud purposes and at other times for riding school purposes the entitlement to relief will vary accordingly. To avoid frequent rating list alterations, and providing all parties are agreeable, there is no objection to VOs apportioning the relief to reflect the times of the year for which the building is used for stud purposes.
3.5 Domestic/Non-Domestic borderline
Property can be considered to be domestic if, inter alia, it fulfils the conditions of section 66(1)(b) of LGFA 1988, ie “it is a yard, garden, outhouse or other appurtenance belonging to or enjoyed with living accommodation”. The technical application of this requirement is explored in more detail in Rating Manual Section 3: Part 1 Occupation & The Hereditament: Part B. Paragraph 5.7 is a useful starting point. Equestrian facilities occupied together with a dwelling, and which are used only for horses of the residents of that dwelling, may be treated as domestic provided that they are appurtenances belonging to or enjoyed with the living accommodation.
In this context, an appurtenance should be within the curtilage of the dwelling and also be expected to pass, together with the living accommodation, under the same conveyance without further mention. See the decision of the President of Lands Tribunal in Martin & Others v Hewitt (VO) 2003 RA 275, (the Windermere boathouse cases), for a further exploration of this point.
Regard must also be had to the relative size of the living accommodation and the to the stables and not vice versa.
That said, riding schools and/or livery stables occupied together with living accommodation should not be regarded as appurtenances belonging to, or enjoyed with, the living accommodation. They are not domestic premises and should be treated as composite non-domestic hereditaments in the same way that a shop and flat would be.
Similarly private stable yards and facilities where horses/ponies are regularly bought and sold, or broken in, schooled, or trained, for reward or profit, and/or are used in the course of a business by a professional rider, will be non-domestic property.
A consideration of the planning permission may be of assistance in deciding whether or not the stables or ancillary facilities may be treated as appurtenant to the domestic property.
Buildings should be measured to GIA, in accordance with the Valuation Office Agency Code of Measuring Practice for Rating Purposes.
Land used for non-exempt purposes (see paragraph 3.2 above) must also be measured and its specific use recorded.
To aid the referencing and valuation of this class, an aide memoir to assist the inspection process has been attached as Appendix 1 to this Section.
It is expected that sufficient rental evidence will exist in the area of a Group (or cluster of Groups) to enable valuations to be carried out on a rental basis.
Where this is not the case, some assistance may be gained from a consideration of the income generating potential of the premises. However it is not considered appropriate to adopt the Receipts & Expenditure valuation method for this class.
Riding schools/livery stables will generally comprise loose boxes of varying types of construction - brick, block or timber, tack rooms, stores, barns and other ancillary buildings. Some properties will have an outdoor riding arena (menège) and/or paddocks with jumps etc. In the larger establishments there will often be an indoor riding arena.
The recommended approach to rental analysis and valuation is to derive a value per loose box as a starting point. The price per “standard” loose box has regard to the fact that the loose box is part of a larger hereditament. The rent achievable for loose boxes which are let out individually by the proprietors is likely to be higher, this payment often being in effect a fee for livery services and/or for the use of the ancillary facilities.
Also care must be taken to establish the effect, if any, on overall rents achievable due to factors such as:-
- Planning restrictions.
- Whether the facilities are adequate to meet the requirements of the Riding Establishment Acts - see para 2 (above).
- Suitability for use of the ancillary facilities for competitions or for shows.
See also the appropriate revaluation Practice Note.
The contents of this Section have been discussed with the British Horse Society and the Association of British Riding Schools, together with their respective rating advisers.
1. Market Appraisal
1.1 Since the last Antecedent Valuation Date (AVD), there has been a marked decline in the number of regular riders. This impact is less acute amongst the horse owning fraternity, where whilst figures for horse ownership are down, the numbers riding remains at a constant level. It therefore follows that facilities hiring out horses for hacking, such as riding schools have been hit the hardest. To mitigate this impact, many riding schools have shifted towards offering stables for livery services, as this is considered more financially viable. Loss of access to a horse, combined with expense are cited as the main reasons for giving up the pastime
1.2 Research shows that riders in the South East, South West and Wales make up approximately half of all regular riders across the entire country. The Midlands, North East and North West have reported significant falls in rider numbers with London showing the steepest decline.
1.3 Statistics reveal that riding for pleasure, non-affiliated competitions and riding lessons have remained relatively static since the last AVD although in recent years have clearly been impacted by Covid restrictions.
1.4 In addition to rider numbers declining, the market demand for recreational horses has reduced, impacting on average prices paid. Generally, owners are now keeping horses longer, with a notable increase in numbers being kept outside all year. The average cost of horse ownership has increased from £3,105 per annum at the last AVD to current levels of around £3,600
1.5 Riding schools in particular face challenges, with increased insurance premiums and staffing costs; set against an environment where increased fees would deter customers. The recent Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018 impacts on riding schools. In that from 01 Oct 2018, all commercial operations hiring out horses for tuition or recreation must provide isolation boxes for recently acquired or sick animals. In effect, this means either the utilization of existing stables (where layout/ capacity allows) or incurred erection costs for new structures.
1.6 It should be noted, yards used solely for livery are not governed by the above legislation, as the horses are privately owned – not belonging to the commercial operation.
2. Changes since the last practice note
2.1 There are no significant changes in approach, although to aid consistency across the network and comparison with other equine classes, a decision has been made to reflect certain ‘other additions’ within box prices. Namely ancillary buildings to the stabling such as tack rooms, feed stores and mess rooms. Facilities such as indoor arenas, horse walkers and surfaced exercise areas will continue to be shown as separate items within summary valuations. Where rents include an amount for such items, analysis of box prices may show a modest pro rata increase, this will however not impact on rateable values. Any increases on 2017 Rating List levels will be restricted to locations where it can be proven rental levels have risen.
3. Ratepayer discussions
3.1 Discussions have been held with the British Horse Society.
4. Valuation Scheme
4.1 There is no agreed scheme for this class as box values are determined by prevailing rental levels within any locality. It is acknowledged that in some regions, rental evidence may be limited or require such significant adjustment to hold little weight. It is therefore vital that analysis and adjustment be been undertaken by the Class Coordination Team.
4.2 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. Information should be sought on any planning restrictions, the type/ style of dwelling and its proximity to the equine facilities in question.
4.3 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
4.4 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.
4.5 Class Coordination Team members should be approached when dealing with both Check, Challenge & Appeal and maintenance work on this class.
1. Market Appraisal
The economic downturn has had an adverse impacted on horse ownership and riding for pleasure within the UK. Approximately 19% less individuals now participate in the sport than in 2006, with the main reason given for the decline being expense.
It is still an extremely popular pastime however with approximately 900,000 horses owned by 451,000 private individuals in Britain. In addition, a further 88,000 horses are owned by the professional sector. It is now estimated that direct expenditure for the care and upkeep of horses stands nationally at £2.8 billion, or an average equivalent of £3,105 per horse/ per annum.
The range and quality of facilities is extremely diverse, from large scale competition/ training venues, to modest livery operations offering occasional lessons.
The market for ‘county level’ eventing centres, often forming part of pony club affiliated competition circuits remains strong. Such facilities continue to attract significant investment and demand for competition places often outweighs supply. Conversely, the smaller rural operations where transport links are poor do not seem to be thriving to the same extent.
It should be noted that profitability is often not the primary motivator with equine operations. Many individuals use revenue from livery or riding lessons to fund their own hobby or interest, or are simply involved to fuel their passion for horses. The high overheads associated with running equine establishments, particularly in relation to third party insurance premiums is increasing onerous and many of the less popular stables are now struggling to remain commercially viable.
The rental value of stable hereditaments is influenced by a number of factors including:-
- location
- layout, nature and character of loose boxes
- facilities – manege, lunge rings, horse walkers, gallops
- turn-out paddocks and land
- strong hinterland of users
- good Out riding – bridleways, common land etc
- space of transporters/horse trailers
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
No discussions have been held with the industry.
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).
Other additions 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 interim measure until the higher decapitalistion rate for 2017 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 ie 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.
Inspection guide providing advice
a. preparation for inspection
b. inspection
c. post inspection
A link to this checklist is available.
Checklist of details required to complete survey, for use as an on site aide memoir.
A link to this checklist is available.
1. Co-Ordination Arrangements
Riding Schools & Livery Stables are a Group co-ordination class and, as such, responsibility for ensuring that the appropriate co-ordination takes place lies with individual Groups. As rental evidence for this class may be sparse or difficult to gauge, it is important that Groups co-ordinate across boundaries, using fully the procedures described in Rating Manual Section 6 - Part 1 and Practice Note 1 - Revaluation 2010.
The Special Category Code 236 should be used. As a Group Class the appropriate suffix letter should be G
2. Valuation approach
2.1 Loose boxes
The first step when establishing a local valuation scheme is to determine a rateable value for a standard loose box as part of a riding school or livery stables. This will vary, depending on location, the degree of competition and the demand for such facilities in a particular area. It is derived from an analysis of the available rental evidence.
When analysing rents, adjustments should be made to reflect factors relevant to the particular hereditament, such as the age and quality of the buildings, availability of services, availability of exercise paddocks, access, planning restrictions on use, etc.
Typically, a standard loose box will have a floor area of approximately 13.5m2, an internal height of at least 2.7m and be of brick or block construction and have adequate drainage and ventilation. Loose boxes within the range 10m2 to 20m2 should be valued at the same price per box, additions/allowances being made for boxes outside this range.
Loose boxes either open directly onto an external yard or may be arranged to open onto an internal corridor. The latter arrangement can be found in older stable buildings where stalls have been converted into loose boxes or where loose boxes have been provided within a former agricultural building. These are sometimes called caged boxes.
Many new, purpose-built, stables also follow this arrangement and are sometimes referred to as American barns. Such buildings should be valued on a price per loose box basis, rather than by applying a price per m2 to the gross area of the building.
2.2 Ancillary Buildings
Generally, these should be valued on a price per m2 basis. However, when inspection reveals that tack rooms or other storage areas are clearly akin to a standard loose box, then the overall loose box price can be adopted. Again following inspection, allowances for poor quality and/or quantum may be appropriate in some cases.
It must be borne in mind that the primary use of this category of property is the stabling of horses and that excessive ancillary facilities may not add to the income generating potential of the premises and hence would not be reflected in the hypothetical tenant’s rental bid. An example would be stables operating from former agricultural buildings, which may include an overabundance of barns or other storage buildings within the farmstead. Judgement must be used to ensure that the value applied to ancillary facilities is not disproportionate to the value of the stables. Similarly, care should be taken where there are an unusually small number of boxes with an indoor school as this might indicate minimal use of the schooling facility.
For the analysis of rents, the following pricings may typically be adopted [subject to local evidence]:
- purpose-built tack room: - in the range £10/m2 - £20/m2 [depending on size and quality]
- hay barn: - £ 3/m2- £7.50/m2 [depending on construction and size]
- purpose built offices, up to: - £10/m2 - £20/m2 [less if a converted stable]
- loft Storage - de minimis
- indoor / Outdoor Arenas - Check not tenant’s improvement [see para 2.3 for detail]
2.3 Outdoor and Indoor arenas
The useable area of an arena used for riding [which may also be referred to as an indoor or outdoor school, as appropriate, or a manège – the latter being often misspelt as menage or ménage] should be a minimum size of 20m x 40m. However, some arenas may not conform to this standard, especially where there are site constraints or an agricultural building has been converted to provide an indoor school. Larger establishments may have arenas in multiples of the standard size or provide separate warm up areas. These varying factors should be reflected in the value applied.
Whilst there may be some superficial similarities between some indoor arenas and industrial or warehouse buildings, the differences are such (eg planning permission, quality, finish, floors or insulation, in addition to location, access, etc.) that industrial or warehouse scales are not appropriate when valuing this type of property.
For the average indoor school a typical value is likely, in most cases, to be in the £4 - £6/m2 range – but be aware that this can vary, depending on the quality of the facilities [see later].
A standard size outdoor arenas should usually be valued within the range of 75p - £1.50/m2, taking the standard 800m2 at £1 /m2 as a norm. Flooding lighting substantially increases the availability of an outdoor arena for use and 25% should be added to these pricings to reflect this.
Typically, a 40m x 20m is likely to cost in the region of £25,000 to build, although this can vary significantly depending on the riding surface used.
There are three basic all-weather surfaces:
- Wax-coated - which provides a more sympathetic surface for the horse all year round.
Total cost £33650, plus VAT 2. Fibre mix - unlike a wax-coated product, it tends not to perform as well in colder weather.
Total cost £25200, plus VAT 3. Dry sand and rubber - this requires regular maintenance and can ride deep in dry weather.
Total cost £19500, plus VAT
NB All costs are as at 1 April 2008, the R2010 AVD.
The construction and drainage, riding surface used and associated ancillary features, such as lighting and the provision of kick boards [fixed to the perimeter to the arena to protect rider, horse and building] are all factors that should be taken into account within this range of values.
Arenas that are of a non standard size should be treated on their own merit, bearing in mind that these will probably be of limited use and wholly unsuitable for competitions or advanced level teaching. Conversely, where the arena is purpose-built to competition standard (with spectator galleries, commentary box etc.), then a higher price per m2 may be appropriate. The accounts may be helpful when considering the potential income generating capacity from competitions and equine demonstrations. This will be particularly so where regular events are held which attract large numbers of the public. Valuers will need to be aware of the interface with regional and national arenas [such as Hickstead] and liaise with the specialist within the SRU dealing with this class.
If a Valuer is satisfied that the size of the arena is excessive in relation to the use of the whole property and/or of poor quality [as may be the case where the arena is a converted agricultural building or where the level of demand is such that the value of the indoor area is disproportionate to main use of the hereditament as livery stables], then a suitable value judgement will need to be made. In this regard, co-ordination within an individual Group and between Groups will be particularly important. Again, the accounts of the occupier, or a consideration of the livery charges relative to other local establishments, may be helpful in determining the income earning potential of the indoor arena in such circumstances, but bear in mind the advice contained in paragraph 5 of the main Section regarding the use of accounts in the valuation process for this class.
It may well be that the value of an indoor school is greater for a riding school than for a livery yard. However, bearing in mind that both users are in the same planning use class, vacant and to let this differential may prove difficult to establish and justify in rateable value terms for any particular property.
2.4 Other ancillaries
Hard Surfaced Yards
Valuers should make further adjustments considered necessary to reflect concrete [or similar hard surface] yards where these are clearly in excess of the normal surface finish expected and where they are satisfied this could be reflected in any rental bid.
Parking
Parking or other facilities should be dealt with similarly. A consideration of the accounts, or any charges made for storage of lorries, trailers, etc, should provide clarification on whether an addition should be made in the valuation for this facility.
Usually, more general parking and the provision of toilets will be reflected in the basic pricing applied to the buildings.
Paddocks
Where rateable, an appropriate price per acre should be adopted in accordance with local office values.
For the analysis of rents, the following pricings may typically be adopted:
- As an average, say £100/acre per annum.
- However the full range could well be £75-£200/acre per annum.
2.5 General
The figures referred to above are for general guidance only and are subject to comparable evidence, information on market rents, individual circumstances and other relevant valuation criteria.
[The contents of this practice note have been shared with the British Horse Society and the Association of British Riding Schools, together with their respective rating advisers.]