UK rural property: Food security
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
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Opinion
When I interviewed the outspoken climate change economist Dieter Helm back in 2020 we talked about the impact reducing farming’s carbon emissions might have on the UK’s food security. The professor was pretty dismissive pointing out that the UK was so dependent on imports in general that we’d run out of other things before food in a real crisis. Right now, food security is back on the political agenda as people worry about the impact of more nature-friendly farming techniques on output, so when I read a recent note from the AHDB (see below) about where the UK’s fertiliser comes from (Egypt and Lithuania, both not far from global conflict zones, supply a good chunk) I was reminded of Professor Helm’s words. Even if all the food on our plates was homegrown or reared the vast majority of the fertiliser used to nourish it would be imported, suggesting the idea of true food self-sufficiency is a bit of an illusion. Unless of course – light bulb moment - we could drastically cut the amount of artificial nitrogen used to produce our food. Ironically, given the opprobrium being thrown at it from some quarters, a proven way to do that is via nature-friendly farming techniques like regenerative agriculture. Swings and roundabouts!
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
In this week's update:
• Commodities – Oil steady, wheat firm
• BPS entitlements – Transfer window closing
• Planning breaches – New rules in place
• River Wye – Action plan launched
• Greenbelt – Labour eyes it up
• Food security – What about fertiliser?
• Rewilding – Carbon capture proved
• Scotland – Carbon emission target ditched
• New launch – The heart of Exmoor
• Stamp duty – Tories propose rate cut
• New launch – Compact Worcs estate
• Farmland values – Prices rise in first quarter
• Farmland prices – 2024 off to a good start
• Country houses – More good news
• Development land – Market stabilises
• The Wealth Report – Out now
• The Rural Report – Watch the videos
Commodity markets
Oil steady, wheat firm
Wheat prices nudged up last week amid some support for further rises. The latest report from the USDA suggests a two-million-tonne increase in Indian consumption, while local commentators are suggesting the department’s production estimate of around 110 million tonnes for the country is about five million tonnes too optimistic. France is also set to see the second-lowest amount of wheat planted for three decades. Meanwhile, oil markets remain relatively sanguine about an escalation in the ongoing Israel Iran skirmish. Although both countries have launched tit-for-tat attacks on each other, the missile strikes seem calibrated to save face while avoiding too much collateral damage.
Need to Know
BPS entitlements – Transfer window closing
Anybody in England wishing to transfer some or all of the delinked payment reference values of their former Basic Payment Scheme (BPS) entitlements has until 10 May to notify the Rural Payments Agency. The deadline does not apply in cases of inheritance. Delinked payments replace BPS and will be paid from 2024 until 2027, reducing progressively each year.
Planning breaches – New rules in place
Later this week (April 25th) all breaches of planning rules must be able to demonstrate 10 continuous uninterrupted years to be outside the time limit for enforcement action. Previously, the maximum period to take enforcement action varied between four or 10 years depending on whether the breach of planning involved physical development work or was for certain changes of use. The consolidation is one of the planning-related proposals contained in the 2023 Levelling Up and Regeneration Bill that are gradually being introduced. For help with any planning issues please contact my rural guru colleague Roland Brass.
River Wye – Action plan launched
Grants for the management of poultry manure totalling £35 million will be made available as part of the new River Wye Action Plan. The lamentable state of the Wye, much of it blamed on phosphate run-off from the area’s plethora of poultry businesses, has been hogging the headlines for some time now with a number of producers facing legal action. It is estimated that 23 million chickens are being reared along the banks of the river in Herefordshire at any one time. Farming groups have welcomed the action plan, but environmentalists say it doesn’t go far enough.
Talking points
Greenbelt – Labour eyes it up
Rural property owners with land in the Green Belt could benefit from Labour’s new Housing Plan, which was launched last Friday (April 19th). The plan aims to unlock the development potential of the Green Belt while protecting nature, and includes the party’s five “golden rules” for housebuilding:
• Brownfield first - Within the green belt, any brownfield land must be prioritised for development
• Grey belt second - Poor-quality and ugly areas of the Green Belt should be clearly prioritised over nature-rich, environmentally valuable land in the green belt
• Affordable homes - Plans must target at least 50% affordable housing delivery when land is released
• Boost public services and infrastructure - Plans must boost public services and local infrastructure
• Improve genuine green spaces - Labour rules out building on genuine nature spots and requires plans to include improvements to existing green spaces
Roland Brass, a rural specialist in our Planning team, says the announcement “demonstrates a positive and pragmatic approach” to one of the UK’s “most successful and long-standing planning policy tools”, and signals the party's willingness to tackle key issues to boost housing delivery. “Knight Frank has been advocating for a mature conversation around the Green Belt for some time.
Our latest research published earlier this year, identifies 11,500 Grey Belt sites, which equate to less than one 1% of total Green Belt land, with the potential to deliver up to 200,000 family homes.” Read Roland’s full analysis of the announcement.
Food security – What about fertiliser?
There is a lot of chat about nature-friendly farming affecting the UK’s self sufficiency when it comes to food production, but fertiliser isn’t often mentioned. It was interesting, therefore, to read a new report from AHDB that highlights our reliance on imported fertiliser. Of the nitrogen applied by UK farmers only 40% is home produced. Most of the ammonium nitrate is imported from Europe, with Lithuania and Poland the biggest suppliers, but following Russia’s invasion of Ukraine, Egypt is now our largest urea provider. The same reliance on imports applies to tractors and other equipment.
Rewilding – Carbon capture proved
A new report, sponsored by engineering and development giant Arup and based on work conducted on the iconic Knepp Estate, suggests that scrub and grassland rewilding projects can sequester as much carbon as tree-planting schemes, much of it underground. The findings from The Knepp Wildland Carbon Project highlight the huge potential for broadening the range of the government’s voluntary carbon codes, which currently only cover woodland creation and peatland restoration.
Scotland – Carbon emission target ditched
Meanwhile, the Scottish government has ditched its target of reducing greenhouse gas emissions by 75% by 2030 after a recent report revealed that the goal is ‘no longer credible’. The government, however, remains committed to achieving net-zero emissions by 2045. It remains to be seen whether this influences farming policy.
Property News
New launch – The heart of Exmoor
My colleague Alice Keith in our Farms & Estates team has just launched an 894-acre farming, natural capital, lifestyle and equestrian opportunity at the heart of Exmoor. Emmetts Grange in Simonsbath, includes an attractive nine-bed Georgian House, four cottages, a party barn, 18 stables and a new indoor riding school. In terms of land, the estate includes 360 acres of pasture, 15 acres of woodland and 474 acres of moorland free from commons rights. The guide price is £6.5 million. Contact Alice for more information about the estate and its natural capital opportunities.
Stamp duty – Tories propose rate cut
It won’t have any impact on farm values, but a story in The Times this weekend says that Chancellor Jeremy Hunt is planning to raise the threshold on which stamp duty is paid on house purchases from £250,000 to £300,000 saving buyers £2,500. It is suggested that the tax cut will be officially announced in the autumn budget meaning Rishi Sunak is planning to delay the general election as long as possible.
New launch – Compact Worcs estate
This week’s offering from Georgie Veale in our Farm & Estates team is Bentley Court, a 170-acre estate near Worcester that could appeal to anybody looking for a combination of luxury rural living and a manageable ecologically sensitive farming business. A huge amount of effort has been put into improving the estate’s soils and planting a significant number of trees. The 11-bed main house dates from the 1700s and there is secondary accommodation plus a good range of farm buildings.
The guide price is £6.25 million.
Our Latest Property Research
Farmland values – Prices rise in first quarter
The average value of bare agricultural land in England and Wales rose by 1% in the first quarter of 2024, according to the latest results from the Knight Frank Farmland Index. The rise takes annual growth to 6%, outperforming other asset classes like equities and residential property. There is still an imbalance between supply and demand, but competing pressures, including the uncertainty of a general election, will probably keep values in a fairly narrow range for the remainder of 2024. Download the full report for more data and insight.
Country houses – More good news
The latest figures from our prime Country House Index, compiled by my fellow researcher Kate Everett-Allen, show that values have started to rise again for the first time in almost two years. Prices increased 0.3% in the first quarter of the year, the last time the index registered positive quarterly growth was in June 2022. Year-on-year, however, values are still down 5%, but they are almost 12% higher than at the beginning of the Covid-19 pandemic in March 2020. Read Kate’s full report for more numbers and insight.
Development land – Market stabilises
Newly released figures from the Knight Frank Residential Land Index show that England greenfield and urban brownfield values were flat in Q4 2023 compared with the previous quarter. Previously, urban brownfield values had fallen by 20% since the most recent peak of the market in the first quarter of 2022 up to Q3 last year, with greenfield down 17% during the same period. Greater economic confidence and a slowdown in the rise of build costs helped underpin values, says my colleague Anna Ward. Read her full report for more numbers and insight.
The Wealth Report – Out now
The 2024 edition of The Wealth Report, Knight Frank’s leading piece of thought leadership on global wealth and property trends is out now. This instalment of the report includes the latest wealth creation data – spoiler, there are more rich people – and an article by yours truly on global farmland markets and how they are being influenced by ESG and Natural Capital. Download your copy.
The Rural Report – Watch the videos!
You've read the book, now watch the videos! To complement the thought-provoking articles contained within the 2023/2024 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.