review South West Rural
spring 2013
Salisbury Taunton Honiton
Truro
Taunton Mansfield House, Silver Street Taunton, Somerset TA1 3DN T: 01823 331234 E: taunton.ag@chestertonhumberts.com Truro 40 Lemon Street Truro, Cornwall TR1 2NS T: 01726 77565 E: caroline.lawrence@chestertonhumberts.com Honiton 105 High Street Honiton, Devon EX14 1PE T: 01404 42456 E: honiton@chestertonhumberts.com Salisbury 37 Castle Street Salisbury, Wiltshire SP1 1TT T: 01722 342393 E:salisbury@chestertonhumberts.com
This Edition Welcome to the Spring edition of the South West Rural Review after what has been a very difficult 2012. All sectors of the farming industry have been affected by the adverse weather conditions from severe droughts to flooding and the second wettest year on record. The impact of these conditions on the farming industry as a whole has been extensive and the knock on implications are likely to be felt well into 2013, and may well persist into 2014. This combined with the poor economic performance of the UK as a whole and other negative factors such as the rising cost of fuel and feed means that 2013 may well shape up to be another difficult year.
However all is not gloomy; interest rates remain low with banks continuing to actively support agriculture. Other positive indicators have come from the RICS Rural Land Market Survey which reported that farmland prices in the South West reached record levels in the second half of 2012, with an average price in the region of ÂŁ6,875/acre. Looking forward during this difficult time, there are many opportunities available to farmers and some of these are covered in this newsletter. We hope that you will find the articles of interest and if there are issues that you wish to discuss further please feel free to contact us.
chestertonhumberts.com
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ld So Trevarno Estate, Helston, Cornwall lot 1A: 104 acre country estate including late regency house, 26 acres of gardens, lodge and let cottage.
Farmland Report: Farmland prices continue to rise but a split market develops david hebditch Values of farmland continued to grow
land, which can easily be ‘bolted-on’ to
results across most farming sectors, it will
during 2012, with the market continuing
are experiencing a good combination of
to a withdrawal of some farmers from
both nationally and across the South West to demonstrate the characteristics of that
existing farm businesses or let out on FBTs, local, regional and national competition,
with a limited level of supply coupled with
resulting in some record prices being
transaction volume was down on the
land and farms are generally attracting
opportunities, rather than a lack of buyer
competition.
a high level of demand. Indeed, overall
achieved.
previous year; this was a reflection of fewer
fewer bidders which is resulting in less
appetite – among the regional markets, the South West recorded the highest
growth in bare arable land values between H1 2011 and H1 2012, at 15.1%.
Although this seller’s market is likely to continue throughout 2013, we are also experiencing a split market with
some wide ranging price differentials
developing, driven by holding location, type and versatility. For example, parcels of
well located and versatile accommodation
However,
more
marginal
Whilst over two thirds of land sales were to farmers in 2012, there continues to be
be especially interesting to see if this leads
the market. However, these shorter term issues must be balanced alongside the longer term factors, such as tax advantages
and farm expansion plans, together with record low interest rates and the continued ability of many farming businesses to access funds.
a growing appetite from private investors,
Overall, the outlook for the rural property
funds, and from lifestyle purchasers often
healthy. The attractions of the sector
whether directly or indirectly via specialist
market in 2013 and beyond appears
for sporting activities such as shooting,
with regard to capital growth and tax
fishing and equestrianism. The tax advantages are of interest to all buyer categories.
Given that 2012 was one of the wettest years on record, resulting in generally poor
advantages are set to continue for the foreseeable future. We therefore believe
that the fundamentals driving land values
will become stronger over the coming years.
chestertonhumberts.com
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ld So 112 acre farm with a 6 bedroom farmhouse, 3 cottages and a 3 bedroom modern farmhouse. Guide Price £1,850,000
Is now the time to consider an agricultural dwelling? caroline lawrence
Prior to the adoption of the National
doubt, historically, when applications
in March 2012, Annex A of PPS 7
the planning system, the outcomes
So
ld
Planning Policy Framework (NPPF) set out the relevant tests to be applied to applications for dwellings subject
to agricultural occupancy conditions. This has now been superseded by
the NPPF but only covers the topic
of agricultural dwellings briefly and does not provide any guidance or 3 bedroom farmhouse with modern farm buildings set in approx 29 acres. Guide Price £735,000
tests for local authorities to apply in making their decision.
Many local authorities are in the process of producing new local
So
ld
guidance which more than likely will address the issue of agricultural
dwellings. However in the mean time many authorities appear to be using Annex A of PPS7 as the benchmark
for
decisions. Until
the new policies and guidance are introduced at local level, it is difficult About 27.32 acres of fertile pasture land available in 2 lots Guide Price £175,000 - £300,000
it determine whether the tests for agricultural dwellings will be more
or less rigorous than those previously imposed.
Some authorities such as Taunton For a free and confidential marketing appraisal please contact David Hebditch t: 01823 348290 m: 07968 216655 e: david.hebditch@chestertonhumberts.com
Deane
Borough
Council
have
formally adopted Annex A for the interim period in order to reduce confusion although other authorities
have not been so decisive. Without
are made in times of confusion in
have been more positive for the applicant. As such it may be easier to
obtain permission for an agricultural
dwelling in the current planning climate.
In addition to the state of the planning
system,
advances
in
technology and to a certain extent localism have meant that some successful
applications,
whether
for houses or temporary caravans, have been for businesses with often
small numbers of livestock. This may open up opportunities on a number
of holdings which could not have feasibly considered an agricultural dwelling in the past.
When the above is coupled with high housing costs in rural areas (especially for first time buyers), profitability
in farming, and the increasing number of farmers wanting to make provisions for the next generation, it
may well be a good time to look into
obtaining permission. In addition, with high freehold farmland values and low interest rates, many farming
businesses should be in a good position to consider such a project.
chestertonhumberts.com
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energy development due to the high wind speed in the region.
Chesterton Humberts has put together
8 simple rules for a suitable site for a successful and viable renewable wind energy project:
1. A good wind speed of over 4.9m/s can be viable
2. Clean, non dispersed wind with no turbulence
3. Grid connection – three phase
is required for most wind energy projects over 10kW
4. Short cabling route
5. Relatively easy vehicular access for delivery and maintenance
6. A set “distance buffer” from houses and linear habitat features, in accordance with government guidance
7. A site next to a listed building, in a conservation area, or in an area of
natural beauty (AONB), is likely to encounter difficulties when trying to obtain planning permission
8. Outside
any
MOD
or
communications aviation zone
Do you have the opportunity to take part in generating renewable energy through wind power? hannah twells
As a country, the scenario faced by the UK
in the 1970’s is very similar to the problems we are battling both in businesses and as
individuals today. However, unlike the recession in the 1970’s there is a unique situation which presents a chance for
landowners, business and communities to fuel an economic recovery - a new
industrial revolution of renewable energy development.
of renewable energy, including: energy
security, mitigating climate change and the reduction of CO2 emissions in line with
government targets. The introduction of the FiT in 2010 brought the start of the
major expansion into renewable energy by addressing the financial viability of such
projects by localising the economic benefits and opening up major opportunities to landowners, businesses and communities.
Since the publication of the first Energy
The UK’s expanding renewable energy
number of incentives for the development
there is still great opportunity for wind
White paper in 2004, there have been a
industry is big business. In the south west
Tele-
Whether it be a single 11kW or a
500kW model, a well positioned wind turbine on a suitable site will be
economically beneficial and help the
viability of many rural businesses. A
turbine will provide additional income, create a diversified portfolio, save costs
on energy bills and also reduce the carbon footprint of rural businesses.
If you have a site which meets the criteria above and wish to discuss the options available, please do not hesitate to contact a member of the planning
team at Chesterton Humberts on
01823 331234 who can provide advice on suitable sites, planning matters and also finance to fund the project.
chestertonhumberts.com
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Funding in a Challenging Climate
marie handel
2012 was a year of challenging weather
in the forthcoming years. Now might
not be forgotten that it was not that long
improved as we go into 2013. Further
flexible finance or overdraft facility to
the base rate has averaged 5.5%, excluding
conditions, and this doesn’t seem to have financial
consequences
could
result
for both livestock and arable farmers with poor quality fodder impacting on
production and fertility, inconsistent maize crops with many failing or un-
harvestable, lower yields and delayed arable cultivations presenting problems
for many. Now is a good time for many businesses to look at both short-term and longer-term financial requirements
for the year ahead to ensure that working capital needs are properly budgeted for and in place.
This year’s cash flow projections could
come under pressure, therefore securing working capital in advance will be
important for budgeting farm finances
be the time to negotiate an additional
address this short term requirement. The AMC’s Flexible Loan facility could offer an effective solution to cash flow
management. The Flexible Loan is a five year facility at a variable rate of interest
with one setting up fee for the full five year term, competitive annual facility charge
and no annual review of the interest rate margin for the five year term, as long as obligations are met.
Alternatively to add more stability to
borrowings, fixing the interest rate may
appeal. With more Government funding being available to banks, the effect has
resulted in the cost of funds reducing. Although the Bank of England base rate
stands at an all time low of 0.5%, it should
ago it stood at 5% and over the last decade any margin charged by the lender. With
the cost of fixed rate money falling to
its lowest level seen for many years, now
might be the time to consider either borrowing new funds or restructuring
existing variable rate loans on a fixed rate to reduce the exposure of the business to future higher interest rates.
The decision to opt for a fixed interest
rate will not only be influenced by cost, but other factors in relation to the future
plans of the business. Fixing interest
rates can provide real peace of mind, but
there are many factors to consider and borrowers should always seek professional advice in making their decision.
chestertonhumberts.com
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utility companies and compensation jack mitchell
The prospect of utility companies requiring access onto your holding can be a daunting one and unfortunately, some disturbance must be expected. However, with the correct advice and good communication from the outset, impacts can be minimised. It is important to firstly understand the powers which the likes of gas, water and electricity providers etc possess – generally they operate under statutory powers allowing them access onto land and the ability to create new rights. Secondly, it is important that those involved have a full understanding of the nature of the planned scheme, the timescales involved and how it will impact upon activities on the land; both in the short and long term. Some utility companies prefer to attempt to negotiate rights/access by agreement, rather than relying on statutory powers. Accordingly, there are often opportunities to negotiate access and new rights in return for attractive payments. However, like all negotiations, the detail of the situation and the position of each party must be thoroughly considered before opening communications or reaching agreement. Where utility providers wish to rely on their statutory powers, communication is important from the outset in order that negative impacts are minimised. For instance, discussions with the companies/
Dates for the Diary Chesterton Humberts will be exhibiting at rural and agricultural shows throughout the country during 2013. We will be attending the following, among others and invite you to come and see us at these events:
their contractors regarding design and layout (such as the positioning of inspection chambers on pipelines for example) can allow the implications for future farming operations to be reduced. It is also essential that a schedule of condition is taken before contractors enter land. Once works commence, it is important to keep records of any time spent, and all problems/damage caused. Once the scheme has completed, it is important that landowners are fully compensated for any losses; correctly drafted compensation claims are therefore essential. There are a number of factors to cover, depending upon the detail of the scheme, but the below headings illustrate the common areas for consideration:
L oss of crop/income – including working areas and single farm payment losses etc.
R einstatement – including boundaries, soil structure, weed control etc. C onsequential losses and disturbance – inconvenience factors such as time spent meeting contractors etc. C apital payments – if it is a new right, a payment will be due to reflect impacts upon land/property values in perpetuity. F ees – all of your expenses including agents and legal fees should be covered. By way of conclusion, it is important to consider the position of both parties before commencing any negotiations or agreeing to anything. In addition, detailed records of time spent/problems should be maintained and, given that fees are normally covered, it is often best to obtain professional advice from the outset. Once works are complete, compensation claims should be drafted with care to ensure all losses are adequately compensated for.
Royal Cornwall Show 6th – 8th June 2013 The Showground, Wadebridge
Cla Game Fair 19th - 21st July 2013 Ragley Hall, Warwickshire
Cereals 12th – 13th June 2013 Boothby Heath, Lincoln
Honiton Show 1st August 2013 Honiton Showground, Stockers Farm
Gillingham & Shaftesbury Show 21st August 2013 Turnpike Showground, Motcombe The Dairy Show 2nd October 2013 Bath and West Showground
chestertonhumberts.com
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Meet the Team TAUNTON
David Hebditch Head of Rural
Neil Gladwin Director
Marie Handel Associate Director
Kate Thomas Land Agent
01823 331234
01823 348294
01823 348292
01823 348287
Stephen Richards Director
Jack Mitchell Assistant Land Agent
Hannah Twells Land Agent
01823 348288
01823 348293
01823 348286
david.hebditch@chestertonhumberts.com
stephen.richards@chestertonhumberts.com
neil.gladwin@chestertonhumberts.com
jack.mitchell@chestertonhumberts.com
marie.handel@chestertonhumberts.com
kate.thomas@chestertonhumberts.com
hannah.twells@chestertonhumberts.com
CORNWALL
Caroline Lawrence Director
Jessica Hext Graduate Land Agent
01726 77565
01872 422066
caroline.lawrence@chestertonhumberts.com
jessica.hext@chestertonhumberts.com
SALISBURY
David Pardoe Director
Colin Tebb Chartered Planning Consultant
Tom David Senior Land Agent
01722 520117
01722 342390
01722 520118
david.pardoe@chestertonhumberts.com
colin.tebb@chestertonhumberts.com
tom.david@chestertonhumberts.com
chestertonhumberts.com
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Our South West Rural Offices Honiton 105 High Street Honiton, Devon EX14 1PE
Taunton Mansfield House, Silver Street Taunton, Somerset TA1 3DN
T: 01404 42456 E: honiton@chestertonhumberts.com
T: 01823 331234 E: taunton.ag@chestertonhumberts.com
Salisbury 37 Castle Street Salisbury, Wiltshire SP1 1TT
Truro 40 Lemon Street Truro, Cornwall TR1 2NS
T: 01722 342393 E:salisbury@chestertonhumberts.com
T: 01726 77565 E: caroline.lawrence@chestertonhumberts.com
chestertonhumberts.com
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