The Rural Update: Affordable energy for all
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
7 minutes to read
Viewpoint
The announcement, detailed below, that homeowners living near new electricity pylons will get a discount on their energy bills may go some way to appeasing affected communities, but more urgent action is needed to help rural businesses struggling with energy costs that are set to rise again in April.
Drying grain or chilling produce has become exorbitantly expensive, while investment in controlled cropping systems like glasshouses or vertical farming has stalled due to spiralling electricity and gas prices.
When it comes to self-sufficiency, the UK’s horticultural industry lags far behind the meat, dairy and grain sectors. More affordable energy is key to the much-needed production of more home-grown fruit and veg.
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Commodity markets
China tariffs hit grain prices
China’s retaliatory tariffs on US farm goods, which kicked in earlier this week, have added to the downwards pressure on grain and oilseed values. In response to Donald Trump’s new 20% levy on most Chinese imports, Beijing has targeted US farmers, who tend to live in Republican-voting states, by adding 15% tariffs to chicken, wheat and maize and 10% to soybeans, pork, beef and fruit.
Oil prices slip
Jitters about the impact of Donald Trump’s trade war also saw oil prices weaken further. Brent Crude and West Texas Intermediate (WTI), the key market benchmarks, have lost ground for three and seven weeks, respectively. WTI’s losing streak is the longest since November 2023. China’s sluggish economy, and potential US and OPEC output hikes, are also dampening market sentiment.
Emergency Japanese rice auction
The Japanese government has just held an emergency auction of 150,000 tonnes of the country’s strategic rice reserves to help combat soaring prices. Rising temperatures have hit output, while panic buying over typhoon and earthquake threats has boosted demand. It is the first time the one-million tonne stockpile has been used in response to market movements since it was created in 1995.
The headline
Rural energy discounts promised
From 2026, households within 500 metres of new or upgraded electricity transmission infrastructure will get annual electricity bill discounts of up to £250 for 10 years. The announcement is part of the government’s Planning and Infrastructure Bill, due to be launched today (11 March).
New guidance will also detail how developers can ensure communities hosting transmission infrastructure can benefit by funding projects like sports clubs, educational programmes or leisure facilities.
To help deliver its clean-energy aspirations, the government says around twice as much new transmission network infrastructure will be needed by 2030 as has been built over the past decade.
Deputy Prime Minister and Housing Secretary Angela Rayner said: “This government’s Planning and Infrastructure Bill will slash energy bills for local people living near new projects, so they benefit as we drive forward in our mission to achieve a more prosperous and energy secure future for the next generation.”
The government says it is continuing to look at how similar benefits can be offered to communities near onshore wind farms and other energy technologies.
News in brief
Rural funding boost
Defra has said £33 million of extra funding will be available as part of the Rural England Prosperity Fund. The money is earmarked for projects such as the creation of rural business hubs that provide shared workspace and networking opportunities for rural businesses, and the development of new products, facilities or building conversions to help rural businesses diversify outside of agriculture. For help accessing this and other grant funding, please get in touch with our grants guru Henry Clemons.
Lab-grown meat coming soon
“Meat” products cultured in vats using animal cells could be on supermarket shelves within two years after the Food Standards Agency said it wanted to speed up the approvals process for the controversial foodstuffs. Although UK researchers have set the pace in developing cultured meat, the government fears onerous regulations could see investment flow elsewhere, hitting economic growth and job creation.
Global vineyard prices
Wine consumption is falling, but how is that affecting the value of vineyards around the world? The newly launched 2025 edition of The Wealth Report features a global round-up including the thoughts of Will Banham, a member of our specialist Viticulture team, on the UK’s vineyard market. Read the article and download a copy of the report.
Timber roadmap released
The government has published details of how more home-grown timber could be used in the UK’s construction industry, in particular helping to deliver the 1.5 million new homes it has committed to building over the life of this parliament. Only 9% of houses built in England in 2019 were timber-framed, compared with 92% in Scotland. Building more, it says, would help reduce embodied carbon in the built environment and drive investment into tree planting, forest management and domestic supply chains.
Peru climate change court battle
A Peruvian farmer is set to appear in court in Germany next week as a 10-year battle against the country’s energy giant RWE, which could have potential trillion-dollar consequences, reaches its climax. Saul Lliyua claims that climate change has caused a glacier above his village to melt, swelling Lake Palcacocha to dangerous levels. Based on a calculation that RWE has been responsible for 0.5% of the post-industrialisation effects of climate change, Lliyua is asking the firm to contribute 0.5% of the cost (€17,000) of protecting his village from the flood risk, even though it has never operated in Peru. If judges rule the farmer’s evidence is admissible, it could open the door to a floodgate of claims against energy companies.
KF ESG expert joins Oxygen podcast
A new Oxygen Conservation Shoot Room Session, featuring Flora Harley, our Head of ESG Research, has just been released. Flora talks to Oxygen CEO Rich Stockdale about how climate risk, regulation, and investment trends are reshaping global real estate markets. Find out more and listen to the podcast.
Win wine with salary survey
The 2025 Knight Frank Estate Staff Salary Survey provides an invaluable benchmark for estate owners on current staff salaries. Please note that the survey is anonymous, but participants can choose to opt into a prize draw for the chance to win two cases of Chapel Down English wine. To take part and find out more, please click here.
Property of the week
New Zealand upland gem
Te Rangi Station, near Hawke’s Bay on New Zealand’s North Island, has just been launched by Knight Frank’s local partner Bayleys. The 2,343-acre property is set up for hunting and breeding deer, as well as raising beef and sheep. There are also tourism opportunities. The property includes three houses, shearer accommodation and ample deer and livestock buildings and handling yards. The deadline for tenders is 17 April. No guide price has been published but please contact Georgie Veale for more information.
Discover more of the farms and estates on the market with Knight Frank
Property markets
Development land Q4 2024 – Housing delivery down
Only 2% of the 50 housebuilders recently surveyed by Knight Frank believe that the sector will deliver the 300,000 new homes that the government is targeting for 2025. The gloomy prognosis is contained in the latest instalment of our Residential Development Land Index report, compiled by researcher Anna Ward, which reveals that the price of green and brownfield development land remained flat in the final quarter of the year, despite Labour’s ambitious housebuilding targets and planning reforms. Download the full report for more insight and data.
Country houses Q4 2024 – Market weakens
The price of houses in rural areas slipped by 0.3% in the final quarter of 2024, according to the latest results from the Knight Frank Prime Country House Index. Overall, values fell by 0.9% during the year. Demand for homes in the countryside has continued to fall since the Covid-19 pandemic, points out Head of UK Residential Research Tom Bill. Exchanges in 2024 were down 20% on the five-year average, he says. However, prices are expected to rebound by almost 18% over the next five years, Tom predicts.
Farmland Q4 2024 – Prices resilient
The farmland market edged up slightly during 2024, according to the latest results from the Knight Frank Farmland Index, which tracks the value of bare agricultural land in England and Wales. Average values started the year at £9,152/acre and, heading into 2025, stood at £9,164/acre, a slight rise of 0.1%. Given the challenges that the farming industry has faced over the past 12 months, this shows the inherent resilience of agricultural land as a multi-functional asset class. Prices, however, did dip in Q4 after Inheritance Tax reforms on farmland were announced as part of the Autumn Budget. For more insight and data please download the full report.