Rural Update: Unlock countryside investment
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
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Viewpoint
Aside from destroying Labour’s claims that it understands the challenges facing the farming industry, the most disappointing aspect of last week’s Budget was that it contained very little in the way of measures that could conceivably boost the UK’s economic productivity or deliver on the government’s ambitious environmental targets, including its 30by30 commitments discussed below.
Despite appeals from farming and environmental organisations for more funding to help rural businesses deliver a green transition, Defra’s budget was cut in real terms. Chancellor Rachel Reeves, however, says she is planning pension reforms that could unlock billions to invest in government-backed projects.
Ensuring some of this cash flows into the countryside could help add some impetus to the UK’s stuttering green finance market and perhaps restore some of Ms Reeves' lost credibility with the rural businesses that the government desperately needs to help deliver its environmental promises.
Commodity markets
Beef at record highs
Strong demand and tight global supplies are helping to push beef prices to new record highs. Average deadweight values for all carcass grades broke the 500p/kg barrier for the first time recently. Prices are now 8% higher than they were 12 months ago. Analysts say the trend could continue into 2025.
Rapeseed geopolitics risk
Grain trader Frontier is predicting that oilseed rape prices, currently on an upward trend, could come under pressure next year if China retaliates for the imposition of tariffs on Chinese goods, particularly electric vehicles, exported to Canada and the US. Oilseed rape (canola) could be one of the targets meaning more of the North American crop is pushed onto European markets.
The headlines
NFU and CLA fight APR raid
Chancellor Rachel Reeves’ decision to slash the rate at which Agricultural Property Relief (APR) and Business Property Relief (BPR) are available on inherited land and farms in last week’s Budget has sparked a furious backlash from the rural community.
Victoria Vyvyan, President of the CLA, said: “Far from setting out an ambitious agenda for economic growth for the entire country, the Chancellor instead chose to announce measures she must surely know would inflict permanent damage on the rural economy.
“Despite saying that she is protecting small family farms, the inheritance tax burden will affect hard-working family farms up and down the country. This a catastrophic drain on business resources.”
Both the CLA and NFU have launched petitions to allow those who disagree with the changes to share their opinion with Ms Reeves. As of yesterday morning (4 November), the NFU’s petition had garnered almost 130,000 signatories, with thousands more being added every hour.
NFU President Tom Bradshaw said: “There is still time for the government to accept they’ve got this wrong, and my message to ministers is that they should do the right thing and reverse this awful ‘family farm’ tax.”
For advice on dealing with the ramifications of the Budget on your business, please get in touch.
Conservation NGO buys Rothbury
The Wildlife Trusts and Northumberland Wildlife Trust have just bought the largest single block of agricultural property to be put up for sale in England in recent decades. The 9,486-acre Rothbury Estate was sold by our Farms & Estates team on behalf of Lord Max Percy.
“Throughout a considered sales campaign targeting our network of environmentally conscious potential buyers, we received far-reaching interest in this exceptionally rare opportunity, highlighting the appeal of its beautiful, nature-rich landscape,” said Claire Whitfield.
Craig Bennett, Chief Executive of The Wildlife Trusts, said: “This is a thrilling moment for The Wildlife Trusts to create a national flagship for nature recovery for the very first time.” Lord Percy added: “I am confident that this acquisition will secure long-term and sustainable management for the future of everyone living and working on the Rothbury Estate, as well as for the local community.”
Discover more about the sale of the estate
News in brief
Time to repent?
Defra Minister Steve Reed has the perfect opportunity to restore his credibility, which was badly dented by the Budget, and announce a change of heart regarding the government’s controversial APR raid discussed earlier. Mr Reed is due to be the keynote speaker at the upcoming CLA Rural Business Conference on 21 November at the QEII Centre in London. Knight Frank is sponsoring the conference, which this year has the theme Growing Profitable Partnerships.
Pension overhaul opportunity?
Having delivered a budget heavy on taxation and spending but offering little to help Labour deliver its aspiration to supercharge economic growth, Chancellor Rachel Reeves is promising better news lies around the corner. It is expected that her Mansion House speech on 14 November could include plans to merge local authority pension schemes into one “super fund” unlocking billions to invest in government-backed projects. Given the UK’s ambitious nature-recovery targets this could be the boost that the country’s green finance industry desperately needs.
Big pharma to fund nature
The COP16 Convention on Biodiversity in Colombia has just wrapped up with wealthy nations failing to agree on how to deliver the $20 billion of nature finance that was promised to the Global South each year at the previous COP meeting. However, an agreement was reached on a groundbreaking deal that will see chemical and pharmaceutical companies provide funding for nature restoration projects. The Digital Sequence Information fund will be based around a levy on products made with the use of genetic data from nature and will require firms to hand over 0.1% of their revenues.
Reed releases 30/30 details
To coincide with COP16 Defra Minister Steve Reed has just released more details of how England plans to achieve its 30by30 target. At the previous COP summit two years ago, delegate countries committed to ensuring 30% of their land was protected for nature by 2030. But, given England’s current protected areas, such as National Parks, account for significantly less than 30% of the country, new areas will have to be added. Mr Reed said: “…..encouraging and supporting buy-in from landowners and land managers will be crucial to achieving this target. We will do this by integrating and streamlining 30by30 into existing mechanisms, such as Environmental Land Management schemes and Biodiversity Net Gain. We will also explore possible new mechanisms and incentives.” Participation would be voluntary, he noted.
Bluetongue update
Following the identification of a case in cattle on the Leicestershire and Warwickshire border last week the bluetongue restricted zone was extended by Defra on 1 November 2024 to include parts of Warwickshire. The English Winter Fair, which was due to take place on 16-17 November at the Staffordshire County Showground, has also been cancelled. Read the latest updates and advice from Defra.
The Rural Report – Out now
The latest edition of The Rural Report, our flagship publication for farm and estate owners, looks at the numerous opportunities and challenges arising in the countryside following the election of a new government. Find out more or request a copy
Property markets
Country houses Q3 – Market waits
Discretionary buyers held back from a new country house purchase pending Labour’s first budget on 30 October. Offers from potential buyers were down 10% in the three months to August, according to the latest results from the Knight Frank Prime Country House Index. However, the slide in average values has slowed with prices dropping by just 1.2% in the 12 months to the end of September - the lowest annual fall since Q1 2023 - points out Head of UK Residential Research Tom Bill. He predicts a total average price slide of 2% this year, dependent on the outcome of the Budget.
Farmland Q3 – Prices flatline
The farmland market in England and Wales was also on budget alert, judging by the latest results from the Knight Frank Farmland Index. Average values for bare land nudged up by just 0.2% in the third quarter of the year to £9,351/acre. This was the smallest increase for several years. For more insight and data please download the full report.
Development land Q3 – Greenfield sites up
The average value of greenfield land values in England rose 3% in the third quarter of 2024, according to the latest instalment of our Residential Development Land Index. However, brownfield and prime central London prices stayed flat due to thin activity, with some market participants taking a “wait-and-see” approach ahead of the Budget, says the report’s author, Anna Ward. Housebuilders are also sceptical that it will be possible to deliver the 1.5 million new homes pledged by Labour over the next five years. Download the full report for more insight and data.
Property of the week
Iconic NZ vineyard opportunity
Georgie Veale of our Farms & Estates team is spending a month in New Zealand getting to know the team at our real estate partner, Bayleys. Over the next few weeks, Georgie will be sharing details of some of the stunning properties Bayleys has for sale. Her first pick is a real corker. The Destiny Bay Vineyard on Waiheke Island, which is currently available with a tender date of 20th November, is a 35-acre vineyard set in a magical position in its own amphitheatre-like valley, creating perfect conditions for the production of world-class wine. “Destiny Bay is New Zealand's highest-rated and most expensive iconic wine brand, benefiting from excellent management by the current owners who are willing to continue with the management responsibilities for the next custodians of the brand,” says Georgie. Read more from Georgie on the opportunities available for UK buyers in New Zealand.