UK rural property: A land of many functions
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
10 minutes to read
Opinion
The range of stories in this week's update just re-emphasises the many functions that farmland and estates provide to help meet the needs of society. Whether that is amenity value, renewable energy, nature restoration or food. The value of our countryside has increased tremendously, especially in recent years. Not only in absolute terms, as shown by analysis of the Farmland Index in The Rural Report, but also in less obvious ways, such as how it can help people overcome health issues and save taxpayers money (see NHS story). We are still awaiting the much-touted Land Use Framework pledged by the government to help guide the competing demands – it should be released later this year. They have promised it won't take a communist approach to land. Let us hope that it will bring clarity to the direction in which rural Britain is being asked to take MT
The Rural Update will take a holiday break and return on 14 August.
Do get in touch if we can help you navigate through these interesting times. You can sign up to receive this weekly update direct to your email here
Andrew Shirley, Head of Rural Research; Mark Topliff, Rural Research Associate
In this week's update:
• Commodity markets – Grain markets heat up
• Barn conversions – Gove announces red tape cut
• Nature – Projects could save NHS millions
• Nutrient neutrality – Offset farmland size of London needed
• Regen ag – Farming helps carbon-negative beer
• Countryside Stewardship – Mid tier applications to close soon
• Public footpaths – New signs to educate the public
• Land registry – Prepare for a long wait
• International news – Significantly more land needed for clean energy
• Sandford Orcas Manor – Magnificent manor house
• The Rural Report – 23/24 edition is out now
• Land values – Price growth slows
• House prices – Country homes take a dip
Commodity markets
Grain markets heat up
The deadline to renew the Black Sea grain deal passed without an exchange of signatures, with Putin standing firm on his demands and targeting Ukraine's export infrastructure. Extreme temperatures across the European continent have also been demanding, and yields are forecasted to have suffered, forcing the EU to reduce its crop estimates. This added support to spot prices, particularly forward prices, which rose £20/t for wheat. Together with the news that crops in the USA could still do with more rain, oilseed rape prices were also significantly up on the week MT
Talking points
Barn conversions – Gove announces red tape cut
The Government has proposed to relax limits around converting barns and agricultural buildings in an announcement today (24 July). Michael Gove, Secretary of State for Levelling Up, Housing and Communities unveiled the plan as part of a suite of changes to national permitted development rights, which are intended to boost the delivery of new homes.
Roland Brass in Knight Frank’s Planning team says: “These changes are unlikely to make a real impact on the UK’s significant housing shortage. However, they are expected to provide rural landowners much greater scope and a more straightforward process to redevelop their assets, including for residential use” MT
Nature – Projects could save NHS millions
Green prescribing could save the NHS around £635 million, according to a report from The Wildlife Trusts. Landowners and land managers have always known that spending time in the countryside or surrounded by nature is positive for health and wellbeing. With many providing facilities, activities and, of course, the space to allow members of the public to enjoy their natural capital. This research highlights that the costs of running programmes that involve referring individuals to have access and time in nature, so-called green prescribing, was outweighed by the potential saving in healthcare costs. The multi-million-pound saving is based on offering these nature-based projects to 1.2 million NHS patients MT
Nutrient neutrality – Offset farmland size of London needed
An area the size of London is needed to offset a block on the development of 120,000 homes in areas affected by river pollution, reports The Times. The newspaper cites an analysis by Lichfields, who suggest that 400,000 acres of farmland would be required to meet the nutrient neutrality rules in Kent, the Solent and the Tees. In catchment-sensitive areas, Natural England stipulates that any potential nutrient discharges from new developments must be offset to ensure that river pollution does not increase.
The analysis shows that 3.3 acres of land per house is needed to mitigate nutrient loads. However, Natural England disagrees and says 0.3 acres per home may be necessary and is working with "developers and planning authorities to create compensatory measures, including new wetlands, to mitigate the nutrient load caused by sewage from new developments and allowing housebuilding to go ahead" MT
Regen ag – Farming helps carbon-negative beer
Discerning drinkers who are also environmentally conscious will be pleased to hear of two beers that claim to be carbon-negative without using any offsets. Gipsy Hill Brewery is sourcing barley from Wildfarmed, which employs regenerative agriculture approaches. The barley is combined with recaptured hops – hops that have already been used to brew an earlier batch of beer. This reduces emissions related to waste. The beers are only available on tap, so there are minimal packaging-related emissions to address. The resulting beers have CO2e footprints of -30g and -40g per pint. A typical pint has a footprint of at least 350g MT
Need to know
Countryside Stewardship – Mid Tier applications to close soon
Mid Tier and Wildlife Offer agreements are still open for applications until 18 August 2023. Sally Britton of the Agri-consultancy team says that "A number of three-year capital grants are also open to help achieve specific environmental benefits, including a new Higher Tier Capital grant, woodland tree health grants and Woodland Management Plans". Click on this link for more details MT
Public footpaths – New signs to educate the public
New signs have been launched to educate the public on the dangers of cattle. The signs, which are available for farms across the UK, urge walkers to move quietly and predictably to avoid alarming the animals. They also remind people to give cows space if they are on or near a footpath, and to release their dogs if they are chased. The signs are produced by NFU Mutual, the UK's farming unions, and farm safety charity Yellow Wellies. They were launched in time for Farm Safety Week, an annual event that aims to raise awareness of the risks associated with working on farms.
The new signs come after several fatal incidents involving cattle. Nine people have been killed while walking near cattle in the past three years. This year's Health and Safety Executive (HSE) report has highlighted that animals are the biggest cause of deaths on farms, accounting for eight of the 27 fatal injuries. A survey by NFU Mutual found that 50% of dog owners would keep their dog on the lead if chased by cattle, while 18% would pick the dog up. The vast majority (88%) of respondents welcomed the idea of signage about walking in fields with livestock. Signs will be available from local NFU Mutual agency offices in the coming weeks MT
Land registry – Prepare for a long wait
If you are registering land or property for the first time, then you could be in for a long wait. Statistics released by the Land Registry reveal that first registrations could take 13 to 14 months to be processed. The agency receives 34,000 of these types of applications every month. Regarding applications to divide existing registered titles (transfers of part), the Land Registry completes half these applications in just over 12 months and almost all by 20 months – and that's if there has been preparatory work. Where no such work has been done, half are processed in about 17 months and almost all in 23 months.
To help improve processing times, the Land Registry are employing more specialist staff and looking to automate systems. In the meantime, if the delays are causing legal, financial, or personal problems, applications may be fast-tracked by requesting an expedite MT
International news – Significantly more land needed for clean energy
Clean energy systems will require twice as much land and 10% more water than the existing fossil fuel systems, according to a new report from the Energy Transitions Commission (ETC). However, the report's authors also say that these needs could be met many times over by 'fixing' the agricultural system. The analysis points out that a transition to a clean energy system would have less impact on nature and water than intensive agriculture.
Globally, 0.4 million square kilometres of habitable land is currently used for fossil fuel extraction and power generation. But this could increase to 1.1 million square kilometres if replaced with an onshore wind and solar roll-out. In comparison, agriculture accounts for 51 million square kilometres. ETC also argue that clean energy systems require 2% of total annual water consumption by humanity, 10% more compared with fossil fuel systems, while in agriculture, the consumption share is 70% MT
On the market
Sandford Orcas Manor – Magnificent manor house
The charming Sandford Orcas Manor House, Dorset, is on the market for the first time since 1736. The Grade 1 listed property comprises the manor house, Manor Farm and 366.74 acres in total. All are available as a whole or in three lots. The manor comes with ancillary accommodation, majestic gardens and 72.61 acres. Manor Farm is tenanted and comes with a four bedroom farmhouse and land extending to 259.21 acres. There is an additional 34.92 acres of agricultural land.
Sandford Orcas Manor has a guide price of £6.5 million. For more information, contact Luke Pender-Cudlip, Hamish Humfrey or Will Matthews MT
Knight Frank Research
The Rural Report – 23/24 edition is out now
The Rural Report 23/24 explores the opportunities for businesses, people and this year's theme 'Planet'. With insight and case studies on natural capital, biodiversity net gain and environmental legislation, it's a guide to the ever-changing rural landscape and how Knight Frank's rural teams are supporting their clients make the most of the opportunities on offer.
Whether you are a rural business owner or a commercial business wanting to make the most of your land, read a selection of articles online and download the full report here MT
Land values – Price growth slows
According to the latest instalment of the Knight Frank Farmland Index, the average value of bare agricultural land in England and Wales rose during the second quarter of the year at the slowest rate since March 2021. Prices increased by just over 1% to £8,845/acre. Annual growth at 8% also slipped into single figures for the first time since the final three months of 2021.
Farmland, however, has outperformed the FTSE 100 equities index, gold, prime central London houses and mainstream house prices over three and 12-month periods. Over five years, only gold has seen stronger capital appreciation.
For more data and insight, please read the full report AS
House prices – Country homes take a dip
The average value of country houses fell by 0.5% in the first quarter of the year as the cost of borrowing continued to rise, according to the latest findings from the Knight Frank Prime Country House Index. On an annual basis, prices have dropped by 0.8%. Demand is still strong, but transaction numbers fell in the aftermath of Liz Truss's mini-budget last autumn. "Ultimately, despite resilient demand, we expect the reduction in spending power caused by the increase in the cost of borrowing and improved supply to see prime regional prices decline by a few percentage points in 2023," predicts my colleague, Chris Druce AS
Main image by Mark Topliff