Covid 19 – Rural property and business update

Commodity prices
Markets remain generally steady, although beef prices are moving up. My local butcher certainly can’t offer the great deals on prime beef cuts like sirloin steaks that were available during the depths of the Covid-19 lockdown. Demand from the slowly re-opening food service sector has put paid to such bargains, he told me last week.

The pandemic has increased demand for locally produced-and-sold meat. According to the results of The Rural Report Sentiment Survey published last week, farms and estates that have diversified into butcheries and farm shops are most bullish about their profitability this year.

The Rural Report is out now
Our flagship publication for anybody who owns or has an interest in rural property is out now. To request a copy of The Rural Report, which is packed full of insight, thought-provoking opinions and advice, please head to www.knightfrank.co.uk/ruralreport

DEFRA seeks your views on tree planting
The government has launched a consultation to get people’s views on how significantly more trees can be planted and existing woodland protected across the country to deliver environmental and economic benefits and help the UK hit its 2050 Net Zero target. The results of the consultation will inform a new England Tree Strategy due to be published later this year.

The Rural Report, out now, includes a contribution from Lord Goldsmith, Minister for Forests. According to the report’s Rural Sentiment Survey almost 50% of rural property owners plan to plant more trees over the next few years, so that should help the government a bit.

If you need any advice on tree-planting strategies on your property get in touch with my colleague Edward Holloway of our forestry investment team 

Government issues advice for commercial tenant issues
Many rural estates have commercial properties that they rent out. According to my colleague Alastair Paul, backed up by results from our Rural Sentiment Survey, a number of his clients are having to work with tenants who cannot afford to pay their rents due to the Covid-19 pandemic. To help those affected, the government issued a new code of conduct on Friday (19 June).

said Simon Clarke MP, Minister for Regional Growth and Local Government.

Get in touch with Alastair if you need help.

Scottish farmland market return delayed
Our team of rural property specialists in Scotland was all primed to get back to work this week, but the reopening of the Scottish property market has been delayed until Monday 29 June. Tom Stewart-Moore, Head of Farms & Estates, is champing at the bit to get selling again and has an exciting portfolio of farms, estates, islands, castles, forestry and sporting opportunities ready to launch.

Meanwhile, south of the border more farms are coming to the market, but according to the Farmers Weekly Land Tracker the amount of land advertised so far this year is still 80% down on 2019. In terms of demand, our Head of Farms & Estates Clive Hopkins says buyers are exceptionally keen, although he says it is too early to say what influence this will have on average land values.

Trade and food standards
The food standards debate rumbles on with over one million people having now signed the NFU’s petition urging the government to ensure imported food matches the same welfare, environmental and safety standards demanded of UK producers. Car-critic-turned-farmer Jeremy Clarkson has also lent his weight to the campaign, but my advice would be to get the footballer Marcus Rashford on board following his role in the government U turn on school lunch vouchers.

In terms of a post-Brexit trade deal with the EU, the UK has officially notified Brussels that it won’t request an extension to the transition period that expires at the end of the year. If no deal is agreed by then we will trade on WTO terms with tariffs applied to goods flowing each way across the English Channel. Boris Johnson, has however, reaffirmed his commitment to striking a deal with hopes for meaningful progress by the end of July. The EU meanwhile has set 31 October as its cut-off date for getting an agreement it can put to its member states for ratification.

One of the stumbling blocks hindering a free trade agreement has been the EU demand for a “level playing field” to continue, something the UK has said it will not countenance. However, one face-saving proposal that seems to be finding favour would be for a deal that acknowledges that the UK has the sovereign right to move away from the EU’s level playing field should it so choose. But if it did, the EU would have the right to impose tariffs on UK goods.

Meanwhile, the US announced this week that it is looking to renegotiate its WTO tariff rates. This could increase the pressure on those countries, like the UK, with which it is currently trying to strike free trade agreements.

Me in the media
As the world goes podcast and webinar crazy I’ve been invited to contribute to a couple. You can hear my wise words on the farmland market and the outlook for rural landowners in the latest edition of the Pinstone Agri-Foods Comm Cast and this week’s Farmers Weekly podcast. If you’d like to hear more you can join our very own Rural Report webinar this Wednesday (24 June). Just register here and ask us a question about any burning rural property issues you may have and we’ll our do our best to answer.