Covid-19 – Rural estates update
Georgie Veale of Knight Frank’s Rural Asset Management team looks at the implications of the latest Covid-19 restrictions and economic support measures for rural businesses
7 minutes to read
As the UK once again succumbs to the unwelcome grip of Covid-19 with a second national lockdown, restrictions are back in place for individuals and businesses resulting in updated government support.
Covid-19 is another hurdle to tackle on top of Brexit and climate concerns, but with constant changes and new regulations, rural business owners have an increasing amount to navigate. However, increased demand in the countryside over lockdown has created huge opportunities for farmers and landowners to strengthen their businesses and with the government introducing various support mechanisms, rural businesses and estates can benefit.
We explore the latest measures and how they impact rural estates for landowners and farmers.
Let Properties
The Coronavirus Act 2020 provides protection to social and private tenants through the ban on evictions and the delay in time for landlords to start proceedings to evict tenants. This has now been extended through legislation until 31 March 2021. Landlords are unable to start possession proceedings unless they have served six months’ notice on the tenants of the property. This rule does not apply for cases such as domestic abuse, anti-social behaviour, and where a tenant has accrued rent arrears to the value of over six months’ rent.
With regards to mortgages, lenders have agreed to offer payment holidays where needed due to the coronavirus-related hardship, of up to six months. This also includes buy-to-let mortgages. The window for new applicants has been extended to 31 January 2021.
Business
Chancellor Rishi Sunak has announced that the Coronavirus Job Retention Scheme, which will pay 80% of salaries up to £2,500 a month, has been extended until 31 March 2021.
The Furlough Scheme has been reintroduced after the short-lived Job Support Scheme (JSS) which provided support to businesses in the tier system with JSS Open and JSS Closed supporting those in ‘local lockdowns’.
“Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.” Chancellor Rishi Sunak.
The Self-Employment Income Support Scheme (SEISS) has been extended for six months from November, offering support to those who are actively trading but face reduced demand over the winter months. Grants will be paid in two lump sum instalments, November to January and February through to April each covering a three-month period worth of profit and will be worth 80% of average monthly trading profits, capped at £7,500 in total.
Under Rishi Sunak’s Winter Economy Plan, the government is giving all businesses that borrowed under the Bounce Back Loans Scheme more flexibility to repay, through the ‘Pay as you Grow’ scheme. The scheme offers greater flexibility and more time, with loan repayments being extended from six to 10 years, nearly halving the average monthly repayments.
As mentioned, BBLS offers more flexibility to repay and has had significant take-up with loans being offered between £2,000 and £50,000, capped at 25% of turnover. Repayments aren’t due for the first 12 months and the government cover interest payments for that period. The deadline for applying for a bounce-back loan has been extended until 31 January 2021.
Furthermore, Self-Assessed Income Taxpayers are being given an extension on payments. Those deferred from July 2020 and those with bills due in January 2021 will now be able to pay over 12 months until January 2022.
On a festive note, The British Poultry Council (BPC) is concerned for poultry farmers who are facing a shortage of birds or higher prices this Christmas if the government does not lift travel restrictions to allow seasonal agricultural workers from the EU.
Around nine million British turkeys are reared for Christmas each year, but the sector cannot survive without non-UK labour. Not only are farmers struggling to predict consumer demand this Christmas due to changing lockdown restrictions, but many poultry factories have fallen victim to serious outbreaks of Covid-19 this year.
The current rules on self-isolation for seasonal agricultural workers differ for those travelling for other purposes. When arriving at the farm from a non-exempt country, for the first 14 days you can work as long as you live on the farm, avoid contact with others, follow social distancing rules, and do not leave the farm. If you do not live on the farm, you will not be able to work and must self-isolate on arrival in the UK for 14 days.
Rural Estates
During this second lockdown in England, shooting has been put on hold again as leaving one’s home for the purpose of recreation outdoors with a larger group of people from different households is against English law.
Since 2 November, Scotland has adopted a new 5 tier approach to coronavirus restrictions. The Scottish government has listed outdoor shooting sports as being exempt from socialising restrictions outdoors.
As Wales come out of a firebreak lockdown, new restrictions were put in place from Monday 9 November including staying out of each other’s homes, limiting the number of times you leave your home and the distance you travel, and maintaining social distancing outdoors. Up to 30 people can meet for an ‘organised activity’ outside, as long as social-distancing and other hygiene measures are put in place.
In Northern Ireland, a circuit-breaker lockdown has been extended from the planned four weeks until Friday 20 November when there will be a partial reopening of some sectors. Outdoor recreational activities such as shooting are allowed to take place, however, unnecessary travel is not encouraged.
Gatherings of more than 15 people are not permitted and only employees can gather indoors (beaters and pickers-up) and only where essential for work purposes.
Rural businesses are looking to adapt, and more and more farms are considering diversification to hospitality and tourism. The staycation trend was on the rise in 2019 and has been ever more so increased with camping and glamping being a popular attraction for UK residents.
However, this industry has been put under immense pressure this year with lockdowns and travel restrictions in place. Going forward, the travel trends for 2021 see ‘staycations as the new vacations’ as people look to explore more on their doorstep and avoid the hassle of travel restrictions and quarantine regulations.
Rural property owners with hospitality and tourism businesses will benefit from an extension of the cut in VAT from 20% to 5% until 31 March 2021. This extension was part of Chancellor Rishi Sunak’s economic package to mitigate the impact of the virus on businesses and will give the tourism and hospitality sectors confidence to continue trading and adapt to an ever-changing working environment.
With an increased demand for remote working environments, farms are also diversifying residential and agricultural to commercial in a bid to ensure a sustainable future for their businesses. Covid-19 is another obstacle when scenario planning that landowners and farmers are having to adjust to and overcome.
Covid-19 Secure Workplaces
With England going into a second national lockdown, the pressure is on businesses to ensure that they are following the government's guidelines when it comes to providing a Covid-19 secure workplace for employees. Part of this includes a thorough risk assessment addressing the risks of Covid-19 and implementing social distancing and control measures. This means that landowners need to update their Health & Safety policies accordingly.
According to government guidelines, rural business risk assessments should include the following;
- Assessing the risk – Employers have a legal responsibility to protect workers and ensure their health and safety is not compromised, especially from Covid-19
- Who can work – Particular attention should be paid to the vulnerable and guidelines surrounding their employment
- Implementing social distancing – Guidelines on 2m distancing, frequent hand washing, screens, side-to-side working if 2m distancing can’t be achieved
- Managing common areas – Reconfiguring seating in break out areas and where possible, using outdoor areas
- Managing external visitors – Maintaining a record of visitors on-site and limiting the number of visitors at any one time
- Provide signage – Guidelines to employees on social distancing, the use of PPE, and other measures implemented to limit the transmission
- Implementing frequent cleaning – Clearing of workspaces at the end of shifts, sanitisation stations, and frequent cleaning of work areas and shared equipment and vehicles
- Use of PPE and mask coverings – Continue to do so where PPE is already used in the workplace
- Managing goods arriving and leaving the farm – Encouraging drivers to stay in vehicles, limiting the number of workers loading/unloading vehicles, and revising pick up/drop off times to limit the number of visitors on site
If you have any enquiries regarding the above or any other issues please contact georgie.veale@knightfrank.com