The Rural Update: Equitable water regulation

Viewpoint

Nobody can deny that the UK’s water industry is in need of radical reform, nor that pollution of our rivers and seas is a serious problem. However, any new regulations imposed on rural businesses (see below) need to be proportionate, affordable, easy to understand and enforced equitably.

Over 500 illegal waste sites continue to operate across England despite the knowledge of the Environment Agency. This will only boost the perception among farmers struggling to turn a profit that they are easy targets for regulators, inspectors and prosecutors, while hundreds of thousands of tonnes of polluting waste are allowed to accumulate lucratively on dumps, often run by criminal gangs.

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Commodity markets

Dairy drop

Defra data has now confirmed the sharp slide in farm-gate milk prices. Figures for December show that the average price paid to dairy farmers across the UK fell by over 6% to 40.29p/litre, compared with November. Year on year, prices are down 13%. January’s figures are expected to show further drops. The Dairy Group, a consultancy, estimates prices need to be over 49.1p/litre for farmers to break even, including the cost of family labour.

The headline

Cattle farm permit call

Beef and dairy farms may need to apply for environmental permits to continue operating under proposals included in the government’s White Paper, A New Vision for Water, which was published last week.

The paper proposes a radical overhaul of Britain’s much-maligned water industry to help protect consumers, safeguard drinking water quality and reduce environmental pollution.

According to the government, 40% of river and groundwater pollution is due to agricultural practices. It also says the existing rules for farmers are unclear, complex to administer, and inconsistently applied.

Currently, the only farming businesses that have to apply for permits, which can cost thousands of pounds, are intensive poultry (+40,000 birds) and pork (+2,000 pigs) units.

Following concerns around the presence of multiple “forever” chemicals, a consultation due to be launched imminently will also investigate greater regulation of the use of sewage sludge as an agricultural fertiliser, including the potential requirement for environmental permits.

Rachel Hallos, vice-president of the NFU, said: “We welcome the commitment to streamline regulation. However, we are concerned about any expansion of permitting to include cattle. Such a change could have a direct impact on farm business growth at a time when increasing growth is a core mission of this government.”

News in brief

Warm homes plan

Rural estates with residential portfolios will probably be keen to read the government’s long-awaited Warm Homes Plan, which was published last week. Backed with £15 billion of public funding, including £5 billion targeted specifically at low-income households, the plan aims to accelerate the uptake of solar panels, heat pumps, batteries and insulation. A new low-interest and zero-interest loan scheme for rooftop PV panels will be available to all households, while the Boiler Upgrade Scheme will be simplified. The Welsh Government has also just announced almost £100 million of funding to improve the energy efficiency of thousands of social homes across the country.

Renewable highs and lows

The EU generated 30% of its electricity from wind and solar in 2025, overtaking fossil fuels as the chief energy source for the first time. Less positive were figures showing that the UK was unable to use 10 Terawatt-hours (TWh) of the renewable electricity it generated in 2025, enough to power all the homes in Greater London for a year. The bulk of the “curtailed” power was produced by wind turbines in Scotland, where demand is lower. Of the £363 million paid to operators of wind and solar farms last year to reduce output deliberately, almost £300 million went to schemes in Scotland.  

Food security warning

The UK should focus more on its food security, according to an assessment produced for the government. Although not acknowledged, it is believed that the country’s security services contributed to the report, which assesses the impact of environmental degradation and biodiversity loss in six key ecosystems around the world on the UK’s national security. In the event of ecosystem collapse, the UK would struggle to feed itself, the report claims.

No to chlorinated chicken

Meanwhile, a petition signed by over 123,000 people and organised by campaign group 38 Degrees is demanding that the government does not U-turn on its commitment to keep chlorine-washed chicken and hormone-treated beef off the UK’s shelves. US pressure is mounting to allow the import of such products in return for more tech investment into the UK. Retailers are also being urged to pledge to refuse to stock food that doesn’t adhere to domestic standards.

Illegal dumps highlighted

An investigation by the BBC has revealed that there are still over 500 illegal rubbish dumps operating in rural areas of Britain. Eleven of them are considered “super sites” containing tens of thousands of tonnes of refuse, with one in Cheshire having accumulated a staggering 280,000 tonnes of waste. The illegal dumping of waste ranks highly in the Knight Frank Rural Sentiment Survey, which tracks the issues affecting farms and estates.

Livestock tracking

A new livestock tracking system that the government claims will help boost productivity, food safety and even meat exports is being introduced. The Livestock Information Transformation Programme will replace existing, species-specific traceability systems across England with a new multispecies system called the Livestock Information Service. This will enable near real-time reporting of livestock movements and the introduction of Bovine Electronic Identification.

Less methane from moorland

A new study of native Swaledale sheep in the Yorkshire Dales National Park has revealed that ewes grazing on moorland emit 15% less methane and 14% less CO₂ than those kept on improved pasture. The study was part of the Forage for CH4ange project. Meanwhile, a new report from the UN’s Food and Agriculture Organisation has said policymakers should not permit the use of artificial methane inhibitors, such as the feed additive Bovaer, without clear evidence that residues will not enter the food chain.

Rural Report out now

The Autumn Winter 25/26 edition of The Rural Report, Knight Frank’s thought-leadership publication for rural property owners and their advisors, is available now. Full of insight from leading landed estates and our Rural Consultancy experts, it’s a must-read. To receive your copy, please sign up here.

Property of the week

Rare vineyard opportunity

What better way to thumb your nose at Dry January than by starting your own vineyard? Knight Frank’s viticulture team is just about to launch a rare opportunity on one of southern England’s most prestigious estates. The Firle Estate near Lewes, in East Sussex, is looking for a long-term partner to develop a vineyard on 28 acres of land identified as having excellent winemaking potential. The wine produced could be sold through the estate’s extensive hospitality enterprises, while the renovation of a walled garden in Firle village may offer exciting options for a tasting and retail site. For more information and details of the tender process, please contact Bertie Gilliat-Smith. 

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Property markets Q4 2025

Farmland - prices stabilise

According to the Knight Frank Farmland Index, which tracks the value of bare agricultural land in England and Wales, the average price of land fell only marginally in the final quarter of 2025. However, diminishing farmer confidence and Inheritance Tax (IHT) worries saw prices slide by around 5% over the year. An acre is now worth just under £8,700. The government’s partial IHT U-turn just before Christmas should help stabilise prices during 2026.

Country houses - values slide

The Knight Frank Country House Index, which tracks the value of properties outside London above £750,000, lost 5.7% of its value in 2025 due to economic uncertainty and worries about what might be included in Labour’s second Autumn Budget. Properties classified as farmhouses were hit particularly hard, sliding by 7.3%. However, the market looks to be bottoming out with prices falling only marginally in the final quarter of the year and exchanges rising by 5%. Contact Tom Bill for more insight and data.