UK rural property: Take the smooth with the rough
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
9 minutes to read
Opinion
It’s easy to bash policymakers. If newspaper reports are correct and the government has delayed the implementation of BNG yet again it will be frustrating for both developers and farmers. But rather than just being tempted to doom scroll through all the bad news and examples of incompetence (I really need to spend less time on X, the social media platform formerly known as Twitter), it’s also worth focusing on the opportunities available for rural landowners. As some of the stories below highlight there are significant amounts of grant funding available for farms and estates to help them become more environmentally friendly and benefit from new nature-based opportunities. And as we discussed last week, even the government’s much-maligned Sustainable Farming Incentive scheme is starting to look much more interesting following the introduction of new options.
Do get in touch if we can help you navigate through these interesting times. You can sign up to receive this weekly update directly to your email here.
Andrew Shirley Head of Rural Research
• Commodity markets – Pork pressure
• Wild camping – Dartmoor appeal
• Health special – Fungicide, MS and microplastics
• AI – Tractor test stalls
• Green finance – Toolkit launched
• BNG – More delays?
• Flooding – Farm compensation available
• Slurry – Last chance for grant money
• English wine – East Sussex vines for sale
• Development land – Prices still falling
• Country houses – 2023 better than expected
• Farmland prices – Market at peak?
• The Rural Report – Watch the videos
Commodity markets
Commodities – Pork pressure
Pig prices have been gradually sliding over the past few months, despite the UK’s hog population falling to its lowest level in two decades. Prices on the continent are significantly lower than prices here, which is boosting the level of imports of bacon, sausages and fresh pork. Meanwhile, a fascinating new retail report from the AHDB shines some light on how the cost of living crisis has affected what people buy. Health as a reason for consumption has experienced consecutive decline since May 2022. As food and living costs have continued to rise, many consumers have had to change their shopping habits and have traded down to value tier products. Within red meat, for example, the value tier has grown by almost 36% year on year.
Talking points
Wild camping – Dartmoor appeal
The long-running Dartmoor wild camping saga enters its next chapter after the owners of an estate in the were granted leave to appeal against a court decision that permitted campers to pitch their tents on common land in the national park. The November ruling overturned a High Court decision last January that concluded a nearly 40-year-old piece of legislation did not give people the right to pitch tents overnight on the Dartmoor Commons without the landowners’ permission. But the park authority later asked appeal judges to overturn Sir Julian Flaux’s decision, arguing he had the wrong interpretation of a 1985 law over rights of access to the commons. Sir Geoffrey Vos found that ‘open-air recreation’ – the words used in section 10(1) of the Dartmoor Commons Act 1985, included a right to camp. In his judgement he said that the fact of sleeping in a closed tent “cannot convert the wild camping from being an open-air recreation into not being one”. This interpretation will now be tested by the Supreme Court.
Health special – Fungicide, MS and microplastics
The links between food, farming and health are more varied and nuanced than many people would imagine. For example, scientists from Manchester University developing a new class of drug to combat a fungal disease that kills millions of people worldwide have raised concerns about the recent approval of a fungicide in the US. Resistance (and mortality) to traditional anti-fungal drugs used in the treatment of aspergillosis has risen due to the use of fungicides used in agriculture, but it was hoped that the a drug called olorofim would get around that. However, exposure of aspergillosis to the new crop spray – ipflufenoquin – which has the same mode of action, could make it resistant to olorofim, rendering the treatment ineffective before it can even be deployed, say the scientists.
Meanwhile, researchers at Cambridge, Oxford and Copenhagen universities have revealed why cases of multiple sclerosis are much more prevalent in northern than southern Europe. Using archaeological DNA techniques the boffins discovered that genes which increase the risk of MS entered into north-western Europe about 5,000 years ago via a massive migration of cattle herders called Yamnaya. At the time, the gene variants carried by the herders helped to protect them against diseases in their sheep and cattle.
Worryingly for those who try to eat healthily, a new study by the University of Toronto detected the presence of microplastics in 88% of the fresh and processed meat and meat-alternative protein products tested. They say you are what you eat….
AI – Tractor test stalls
Everybody is talking about artificial intelligence and Last week our Research team had a thought-provoking update on the awesome power of AI. Finding nice images to illustrate the Rural Update is not always easy, so I thought I’d take some AI baby steps and create my own without leaving the office! As you can see, somebody or something needs a bit more practice. I wanted a topical seasonal image and after a couple of attempts to refine my search terms this is what AI came up with based on the following phrases: A Massey Ferguson 8730s tractor being driven by a woman. The tractor is pulling a Triton seed drill directly behind it. It is a rainy day in January. The soil is stubble. And then the free subscription ran out. But if anybody thinks this interesting new tractor configuration is a goer please send the royalties my way!
Need to Know
Green finance – Toolkit launched
The Green Finance Institute, in conjunction with Defra, has just launched its online Farming Toolkit. The kit provides a framework for landowners and tenants to identify and understand nature market opportunities. It is suitable for all farm sizes, sub-sectors and regions. Grants of up to £100,000 are available under the third round of the Natural Environment Investment Readiness Fund (NEIRF), which closes on 16th February. NEIRF funding is intended to help farmers who want to explore nature markets and other ways of leveraging private finance for nature. Please contact our grants wizard Henry Clemons for help applying.
BNG – More delays?
Ironically, given the above, the government is apparently set to further delay the implementation of its flagship biodiversity net gain (BNG) rules that will compel developers to replace any natural habitats lost - plus an extra 10% -during the creation of new residential or commercial property schemes. BNG was supposed to be introduced from last November, but the launch was postponed until this month. Now, according to The Times newspaper, it has been put back until February due to issues getting the required legislation through parliament in time. If you are affected by BNG issues please get in touch with our team.
Flooding – Farm compensation available
Farmers who have suffered uninsurable damage to their land caused by the recent flooding will be able to apply for grants of up to £25,000 through the Farming Recovery Fund towards repair and reinstatement costs. This support will be made available through the Flood Recovery Framework, which is used in exceptional circumstances to support councils and communities following severe flooding.
Slurry – Last chance for grant money
Anybody thinking of applying for grant funding to help boost their slurry handling infrastructure has until 17 January to get their applications in. The Slurry Infrastructure grant is designed to help farmers improve or expand their slurry storage capacity to six months for beef and dairy cows and eight months for pigs, and improve the use of organic nutrients. Grants of between £25,000 and £250,000 are available to replace stores that are no longer fit-for-purpose, build additional storage, and contribute towards the costs of impermeable covers and supporting equipment, including slurry separators. Please contact Henry Clemons for help applying.
On the market
English wine – East Sussex vines for sale
The Rural Update doesn’t believe in “Dry January” so we’re delighted that our specialist viticulture team is kicking off 2024 with the launch of a 33-acre East Sussex property belonging to a well-respected wine producer. The sale, which is guided at £1.9 million, includes 15 acres of vines, a winery, other buildings and wine in stock. Please contact our English wine guru Ed Mansel Lewis for more information.
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.
Country houses – 2023 better than expected
Kate Everett-Allen, our international residential research guru, is adding the country homes market to her portfolio and has a bit of good news to report. “Prime country house prices declined by 5.8% in 2023. While this figure represented a sizable correction after two stellar years of growth, the rate of decline was lower than our forecast of -7% for the year. A growing sense that mortgage rates are at, or close to their peak, began to influence market sentiment towards the end of the quarter – a theme we expect to build this year. That’s not to say prices and sales volumes will bounce back strongly. Although the Bank of England opted to hold interest rates at 5.25% in December, the cost of borrowing remains at a 15-year high.” Read Kate’s full report.
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.
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.