UK rural property: we need farming facts not fiction
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
13 minutes to read
Opinion
When even The Guardian gives a programme encouraging us to eat less beef a one-star review it's clear something has gone awry. If Channel Four's The Big British Beef Battle, presented by the personable Ade Adepitan, had been all about encouraging policymakers to ensure post-Brexit trade deals protect consumers from imported food with a much higher carbon footprint than homegrown produce it would have been on the money. Instead, it predictably tarred British beef with the same brush as meat produced from land carved out of the Amazon rainforest. Having encouraged a canteen of factory workers to swap beef for chicken and Quorn (which of course raises its own issues), Adepitan exclaimed excitedly: "With knowledge good things happen". The UK's farming industry clearly needs to do much more to ensure the "knowledge" in question is based on facts to allow people to make genuinely informed decisions AS
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
To receive this regular update straight to your inbox every Monday, Wednesday and Friday, subscribe here.
In this week's update:
• Commodity markets – Tighter wheat balance for year ahead
• Inheritance tax – APR here to stay says Labour
• Planning – Gov issues response to consultation
• Food – Tesco ends WWF nature partnership
• Culture wars – C4 causes beef ruckus
• COP28 – Food and farming agreement
• Natural capital – ONS values UK's nature at £1.5 trillion
• National Parks – Competition for new park
• International news – Dutch farmers sell up
• Out and about – CLA conference
• Grants – Barclay announces further schemes
• Biodiversity net gain – More legislation and guidance released
• Nutrient neutrality – Listen to our latest podcast
• Public access – Farmer fined after cow attack
• Land at Simonsbath – Rare piece of Exmoor for sale
• Development land – Prices still falling
• Country houses – Prices drop
• Farmland prices – Market at peak?
• The Rural Report – Watch the videos
Commodity markets
Commodities – Tighter wheat balance for year ahead
The AHDB's latest report on the UK cereal supply and demand estimates unveils a nuanced landscape for the 2023/24 season. A diminished wheat crop, coupled with expanded carry-in stocks and higher imports, results in a tightened wheat balance. The levy body says: "The amount of wheat fed on farms is forecast to be slightly lower on the year due to tighter availability and the relative price, with cheaper feed prices expected this season but still historically high grain prices for farmer selling." Barley faces a similar scenario, with lower availability despite a slight dip in domestic consumption, creating a tighter-than-average balance. Anticipated maize import hikes signal an upswing in animal feed production demand. While the levy board also says that the oat market mirrors similar trends to other cereals with a smaller crop contributing to a tight balance this season MT
Talking points
Inheritance tax – APR here to stay says Labour
There are rumours swirling that the Labour party will scrap agricultural property relief (APR) if it wins the next general election. However, speaking at the CLA's annual Rural Business Conference last week, Shadow Defra minister Steve Reed said his party will not be getting rid of the relief, which can exempt farmland from inheritance tax. It is particularly important for let land, which does not qualify for Business Property Relief as it is considered an investment. Rural property owners and their advisors should probably not relax too much, as Mr Reed's statement still leaves plenty of wiggle room for significant reform of the APR regime. Do get in touch if you need advice on succession planning AS
Planning – Gov issues response to consultation
The government has published its response to a consultation on planning reforms, which include increasing planning fees, making changes to the Planning and Compulsory Purchase Act 2004, and reaffirming its commitment to protecting the Green Belt.
To boost local authority capacity, the government has proposed a 35% increase in planning fees for major applications and a 25% increase for all other applications. Additionally, section 38 of the Planning and Compulsory Purchase Act 2004 will be amended to mandate that planning decisions align with the Development Plan and National Development Management Policies unless compelling material considerations dictate otherwise.
The government has emphasised its unwavering dedication to safeguarding and enhancing the Green Belt. National planning policy offers protections for Green Belt land, and it looks like this policy will continue. Moreover, national planning policy clearly states that local authorities should maximise the utilisation of brownfield land, minimising the need to consider greenfield sites. The government is also providing substantial financial support for the uptake and completion of brownfield redevelopment projects.
In its recent consultation on potential National Planning Policy Framework updates, the government proposed strengthening Green Belt policy by explicitly stating that local authorities are not obligated to reassess Green Belt boundaries to meet housing requirements. The government is currently analysing feedback from the consultation and anticipates issuing a response later this year. If you have any planning requirements or queries, contact our planning expert, Roland Brass MT
Food – Tesco ends WWF nature partnership
In a strategic shift, Tesco has concluded its eco partnership with the World Wildlife Fund (WWF), asserting that sustainability goals are now ingrained in its supply chains. The retailer has unveiled its Nature Programme, concentrating on safeguarding nature in key sourcing landscapes, fostering biodiversity innovations, executing a comprehensive nature plan, leading in research, and promoting cross-sector engagement.
Meanwhile, the WWF issued a stark warning, urging a 50% reduction in shopping basket environmental footprints before 2030. Progress is noted in palm oil supply chains, with 76% certified not from deforested areas, but soy lags at a mere 5% deforestation-free.
A major challenge lies in clarifying Scope 3 emissions (indirect emissions), constituting over 95% of total supermarket emissions, with some retailers witnessing increases MT
Culture wars – C4 causes beef ruckus
Talking of deforestation, last week's Channel 4 documentary The Big British Beef Battle hosted by the popular TV presenter and environmental campaigner Ade Adepitan has certainly raised the hackles of farmers and their representatives. I watched it so you don't have to and I can see why they are riled. In the show Adepitan wants to do his bit to combat climate change and has decided that banning beef consumption is the best way to go about it. If all the beef consumed in Britain was from South American herds grazed on land carved out of the Amazon or fed in feedlots with soya from land carved out of the Amazon he'd have a point. But as the programme failed to point out, it's not, and so its entire premise was based on the flimsiest of foundations AS
COP28 – Food and farming agreement
Ade can at least take comfort that the first big news to come out of this year’s COP climate jamboree in Dubai is that over 130 countries have signed up to The Emirates Declaration on Sustainable Agriculture, Resilient Food Systems and Climate Action. World leaders have promised for the first time to tackle the significant role that food and agriculture play in climate change. The countries that have signed up apparently represent 5.7bn people and 75% of all emissions from global food production and consumption, but exactly what actions will come out of the agreement remain to be seen. AS
Natural capital – ONS values UK's nature at £1.5 trillion
The UK's ecosystems emerge as economic powerhouses, valued at a staggering £1.5 trillion, according to the latest data from the Office for National Statistics (ONS). Nature contributes over £45 billion annually and is vital across sectors like public health, food production, and pollution control. Culture and recreation lead with a £0.9 trillion asset value, emphasising the significance of outdoor activities and tourism. Notably, nature's 2021 contribution of £445 billion underscores the economic impact of recreational time.
Despite these figures, the ONS acknowledges they are conservative, omitting certain benefits like the cost reduction from natural infrastructure's flood protection. It also calculates that the total area of enclosed farmland was approximately 12 million hectares in 2021, 50% of the entire UK land area, and down from 54% in 1990 MT
National Parks – Competition for new park
Apparently, there are 270 million visits every year to National Parks and National Landscapes (the new name for Areas of Outstanding Natural Beauty) and now the government want to create a new park. In a policy paper published last week, the government intends to follow up on its manifesto and designate an area to be the 11th National Park in England. It also published a plan to recover England's temperate rainforests, a globally rare and important habitat found in, for example, Cornwall, Devon, and Cumbria and create two new community forests in Tees Valley and Derbyshire. Amongst the policy paper is also the announcement of a Woodland Access Implementation Plan, which the government says "aims to enhance public enjoyment of woodlands." These announcements will be of particular interest to landowners and land managers who may find themselves being involved whether they choose to or not MT
International news – Dutch farmers sell up
Over 750 Dutch livestock farmers have signed-up to sell their farms to the government as part of a €1.5 billion initiative to help cut the country's nitrogen oxide and ammonia levels, which exceed permitted EU levels. Despite its small size Holland is the world's second-largest exporter of agricultural products. The controversial buy-back scheme, which is targeting farms near nature reserves, is part of a bid to cut nitrogen emissions by 50% by 2030. Whether the results of the country's recent general election that saw the right-wing Party for Freedom win the most votes will kybosh the plan remains to be seen AS
Out and about – CLA conference
I was delighted to chair an all-women panel of "next-generation" farmers at last week's annual CLA Rural Business Conference, which was sponsored by Knight Frank. I may be biased, but I'm pretty sure the forthright and thought-provoking views of my three panellists, including a 19-year-old CLA Charitable Trust Scholar, raised more applause from the 500-strong audience than the platitudes delivered by the Defra minister Steve Barclay and his opposite number on the Labour front bench Steve Reed AS
Need to Know
Grants – Barclay announces further schemes
In his inaugural address at last week's CLA Rural Business Conference, Defra Secretary Steve Barclay unveiled £45 million of initiatives to help bolster agricultural efficiency. The upcoming funds will fuel innovation projects and aim to incentivise farmers to adopt cutting-edge technologies like solar, robotics, and automation. A major component is the £30 million allocation for the second round of the Improving Farming Productivity Grant, offering capital grants from £25,000 to £500,000 for robotic and automatic equipment, with additional funding potential based on interest.
Notably, this round marks the introduction of grants ranging from £15,000 to £100,000 for solar equipment. The Large R&D Partnership's third round also earmarks almost £8 million to advance industrial research and experimental development projects. If you are interested in any of the grants available, contact our grants guru, Henry Clemons, for the best advice on how to select the best funds and put together an application MT
Biodiversity net gain – More legislation and guidance released
After much anticipation, the secondary legislation on Biodiversity Net Gain (BNG) has been unveiled, putting more flesh on the Environment Act 2021. These new statutory instruments mandate BNG for all planning applications submitted after 1 February 2024.
With a total of six Statutory Instruments, the draft wordings have been revealed, and are awaiting formal parliamentary approval this week. The release is accompanied by comprehensive guidance to navigate the implementation of this crucial environmental framework. The latest guidance on BNG can be found on the government website MT
Nutrient neutrality – Listen to our latest podcast
Sticking with nature-based solutions, my research colleague Anna Ward's latest podcast takes a look at nutrient neutrality requirements and their growing impact on housing supply – in some areas new starts are down by as much as 70-80%. Steph Small from our Rural Consultancy also shares her insight on the nascent nutrient mitigation market AS
Public access – Farmer fined after cow attack
Farmers putting cows with calves into fields crossed by public footpaths should be aware of a recent court case that saw a Devon farmer fined £2,000 by the Health & Safety Executive after a walker and his dog, which was on a lead, were attacked and injured by a group of cows. No electric fence had been put up to separate the path from the rest of the field nor were there any signs to warn of the dangers of protective cows. Read the full ruling here AS
On the market
Land at Simonsbath – Rare piece of Exmoor for sale
Our Farms & Estates and Bristol team are selling approximately 390 acres of pasture, improvable grazing land and moorland in Exmoor National Park near Simonsbath, Somerset. The land is in a private location, and offers opportunities for existing traditional farming as well as for natural capital and nature recovery. The guide price is £1.77 million. Contact Will Matthews or John Williams for further information MT
Our Latest Property Research
Development land – Prices still falling
The latest findings from our Residential Development Land Index show values are continuing to fall. "UK greenfield and urban brownfield values fell on average by 2.4% and 2% respectively in Q3 2023. In prime central London, land prices were flat during the quarter," writes my colleague Anna Ward. "Average urban brownfield land values across England have now fallen by 20% since the most recent peak of the market in the first quarter of 2022 up to Q3 this year, with greenfield values down 17% during this period.
But this quarter we have seen price falls start to moderate in nearly all areas," adds Anna AS
Country houses – prices drop
The value of a home in the countryside is falling at the fastest rate since the global financial crisis, according to the latest instalment of the Knight Frank Prime Country House Index compiled by my colleague Chris Druce. In Q3 2023 average prices dropped by just over 2% taking the 12-month slide to over 8%. Despite the slump, values are still 12% higher than they were in June 2020. Chris says there is a bit of stalemate in the market as sellers cling to last year's prices, while purchasers are angling for big discounts. Read the full report AS
Farmland prices – Market at peak?
The latest edition of The Knight Frank Farmland Index has now been published. The average value of bare agricultural land rose by 1% in the third quarter of the year to just shy of £9,000/acre. Annual growth was 8%, which outperformed a number of other asset classes (see chart). Our research suggests values may remain flat into 2024. Read the full report for more insight and analysis AS
The Rural Report – Watch the videos!
You've read the book, now watch the videos! To complement the thought-provoking articles contained within this year's edition of The Rural Report our whizzy Marketing team has also created a series of videos featuring many of the report's contributors. Head to our very own YouTube channel to discover more about biodiversity net gain and regenerative farming; find out how we are helping Guy Ritchie's Ashcombe Estate on its diversification journey; and read about the travails of an entrepreneurial Zimbabwean searching for a farm for his family. Plus, lots more AS