Opportunities and challenges facing rural landowners

Greening homes, the right way

Climate change has become a significant concern for all of our clients and it continues to be a confusing area for homeowners. Regulation can be fluid and there is an abundance of conflicting ideas and opinions.

If you’re considering a renovation or refurbishment, make sure you speak to your project manager or building consultant at the earliest opportunity to establish what systems you can incorporate. The effectiveness of sustainable solutions will depend on what is right for your property and lifestyle.

Solar PV panels, for example, are becoming increasingly popular, but they aren’t right for all homes. Some sustainable systems won’t cope with the usage of a busy family household and can end up being more costly for owners and the environment.

Listed and heritage homes present a particularly interesting opportunity and, contrary to popular belief, there’s still plenty owners can do to ease their carbon footprint. For larger country homes, electric charging bays for landscaping, farm and maintenance vehicles is increasingly commonplace. Producing energy for all this presents challenges for the National Grid, so we also advise on the development of alternative forms of electricity generation.

The government’s Heat and Building Strategy should be published in the near future and is expected to lay out a timeline for the removal of fossil fuels from the rural heat fuel mix within the next ten years. While that is a short timeframe, it will give us something to plan towards.

—James Carter-Brown, Head of Building Consultancy, and Robert Blake, Head of Private Residential Consultancy

HS2 and the battle for land

Relations between landowners and the controversial High Speed 2 (HS2) project are reaching new lows as the infrastructure project gears up to increase the pace at which it acquires land.

When the High Speed Rail Phase 1 Bill was being scrutinised by parliament, a key concession negotiated by the NFU and the CLA was an undertaking that the minimum amount of land needed for the scheme would be acquired. Anything else would be occupied only on a temporary basis.

Despite project organisers in some cases taking significant areas, landowners have known that possession of the land would soon be returned once HS2 has finished with it. That is about to change with the arrival of the End of Powers project.

The HS2 design process is not yet complete, so it is not clear exactly how much land will be needed, but its powers to acquire land permanently will soon expire. The solution is to act defensively and take a great deal of land, and resolve what it is not needed later.

The effects on some landowners may be devastating. While we understand that any areas not needed in the long term will be offered back, there is no indication as to when that will be. Some plans include the permanent acquisition of land where only easements or right of ways are needed, and taking these could create huge landlocked areas.

Compensation negotiations are set to be interesting.

—Jonathan Scott-Smith, Compulsory Purchase & Compensation

Welsh water risk

New water quality regulations seeking to minimise nitrate pollution from agricultural activities were introduced across Wales on 1 April this year, despite fierce criticism from the farming industry.

The proposals, which will be phased in over three-and-a-half years, make the whole of Wales a Nitrate Vulnerable Zone (NVZ) – effectively an environmental “at risk” zone.

The resulting rules limit the use of slurry and fertiliser on farmland in an attempt to tackle river pollution and NFU Cymru has launched a legal challenge, warning that the regulations are “heavy and disproportionate”.

There are practical and financial implications for farmers to consider. If farmers don’t have a manure store that is likely to comply within three-and-a-half years then they will need to invest, and the capital outlay can be significant.

From a practical view, if you can no longer spread manure in the way you currently do, you may need to change
your system of farming, or even reduce stock levels to comply. It’s also worth noting that responsibility lies with the individual doing the farming, so landlords are not obliged to engage in the overhauls.

—Edward Holloway, Rural Asset Management

The value of community farms 

The direction of travel has been clear since the Agriculture Bill became law last year – we are moving away from direct subsidy support to be aligned with “public money for public goods”. This will put community at its heart, and there are few better ways of engaging with the public than community farming.

The public good in community farming is clear, and that will secure vital funding. However, the benefits of the movement go beyond funding. By engaging with a local farm, communities get a better understanding of important concepts, such as where their food really comes from. It solidifies a better understanding of food miles and carbon offsetting, and encourages people to engage with British food.

Crucially, people are able to enjoy the countryside. Our village runs its own organisation called the Wye Community Farm. There are 500 people involved out of a village of 2,500. The level of engagement is interesting and encouraging. We also have a community Facebook page where local farmers often post comments and photos, so people feel a connection with the surrounding farmland – they can see where their next loaves of bread will come from.

The more people understand the food production on their doorstep, the better chance we have of people wanting to buy British, while understanding the impact of buying meat produced 3,000 miles away.

——James Thompson, Head of Consultancy

Tightening rules on workers' accommodation 

Farmworkers who live in accommodation provided by their employers have faced extra tax charges since April 2021, after HMRC tightened the rules on exemptions.
These changes allow employees to be taxed as a benefit in kind if the accommodation isn’t absolutely central to their role. It can be tempting for busy farmers and landowners to let these issues slide down the list of priorities, however HMRC is giving much greater scrutiny to these issues and will need a solid, evidence-based argument as to why exemptions from the tax have been granted.

The wider impact is likely to be a shift in how compensation packages are structured, particularly for chief executives, resident agents and other workers that would usually live on the estate, but wouldn’t be considered essential by HMRC.

——Christopher Terrett, Rural Asset Management

Car parking as a revenue stream 

With incomes across the industry under pressure, the push for diversification is more important than ever. Farms and estates often include areas that are uitilised for free parking that could be converted into a revenue stream.

It’s common and understandable that local people may push back against paying for parking they are used to getting for free. However, with the right stakeholder engagement it’s possible to communicate the benefits everybody gets from investing, to ensure land is well kept, particularly due to the growing number of people visiting the countryside as a result of the Covid-19 pandemic.

Knight Frank works with third-party consultants that install digital systems to run and manage car parks at their own cost, with the landowner keeping all of the earnings from those paying to use the car park. The third-party companies ensure relevant signage is in place, ensure the surface is correct and boundaries are properly identified.

——John Williams, Rural Asset Management

Changing spaces for changing needs 

The government has recognised that regulations need to enable a repurposing of buildings on high streets, town centres and rural locations if their vibrancy is to be retained. Officials have sought to do that by consolidating a number of use classes into a single class – Class E.
The class allows a building to be used flexibly by having a number of uses taking place concurrently or at different times of the day. Crucially, changes of use within this use class do not need planning permission.

The move comes at a critical time for the rural economy. Landowners are increasingly seeking to diversify revenue streams, and they can now react to changing demands for space. Farm shops, for example, could be converted into flexible working space, tapping into requirements from consumers that wish to work closer to home without the distractions of being at home.

——Tom Stanley, Land & Planning