Land Journal June-July 2016

R I C S L AN DSTR A P L I N E JO U R N A L

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Seeing the light New RICS guidance on Rights of Light explained PG.

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Rural energy revival Policy reforms still leave opportunities for landowners PG.

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Fracking off?

Getting streetwise

June/July 2016

Could underbalanced drilling offer an alternative approach?

Rebuilding London’s estates to meet demand for homes

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C O NTENTS RI CS L AN D J OU RN AL

RI C S LAND JOUR NAL

RICS L A NDSTR A P L IN E JO U RNA L

Land Journal Author Author Standfirst

Head

T

contents

Seeing the light New RICS guidance on Rights of Light explained PG.

10

Rural energy revival Policy reforms still leave opportunities for landowners PG.

6 24

Fracking off?

Could underbalanced drilling offer an alternative approach?

PG.

M A R C H /A P R I L 2 0 1 4

18

Getting streetwise

June/July 2016

Rebuilding London’s estates to meet demand for homes

rics.org/journals

PG.

20

Images ©

Front cover: © Getty

CO N TAC TS

4 From the chairmen

LAND JOURNAL

5 Update

Editor: Mike Swain

E mswain@rics.org

T +44 (0)20 7695 1595

Editorial team: James Kavanagh, Fiona Mannix, Tony Mulhall (Land Group) Land Journal is the journal of the Environment, Geomatics, Minerals and Waste, Planning and Development and Rural Professional Groups Advisory group: Tim Andrews (Stephenson Harwood LLP), Philip Leverton (College of Estate Management), Rob Yorke (rural chartered surveyor), Michael Rocks (Michael Rocks Surveying), Tim Woodward (rural chartered surveyor), Michael Birnie (Buccleuch Estates), Marion Payne-Bird (consultant), Frances Plimmer (FIG – The International Federation of Surveyors), Duncan Moss (Ordnance Survey), Kevin Biggs (Royal Bank of Scotland) The Land Journal is available on annual subscription. All enquiries from non-RICS members for institutional or company subscriptions should be directed to: Proquest – Online Institutional Access E sales@proquest.co.uk T +44 (0)1223 215512 for online subscriptions or SWETS Print Institutional Access E info@uk.swets.com T +44 (0)1235 857500 for print subscriptions To take out a personal subscription, members and non-members should contact licensing manager Louise Weale E lweale@rics.org

Published by: Royal Institution of Chartered Surveyors, Parliament Square, London SW1P 3AD T +44 (0)24 7686 8555 www.rics.org ISSN: ISSN 1754-9094 (Print) ISSN 1754-9108 (Online)

6 Rural energy revival

Last year’s renewable industry policy reforms still mean lucrative opportunities for landowners, says Hugh Taylor

9 Guidelines for bat surveys

Morgan Taylor outlines the latest good practice advice from the Bat Conservation Trust on conducting surveys for planning and development

10 Seeing the light

16 Setting precedents

Edward Peters reviews recent updates to RICS precedents for farm business tenancies and agricultural licences

18 An alternative to fracking

Underbalanced drilling can address economic, environmental and regulatory concerns over fracking, according to Richard Roddewig and James Hughes

20 Becoming streetwise

Yolande Barnes argues that a “complete streets” approach to housing estates could help tackle London’s growing demand

The RICS has issued new guidance on rights of light, Michael Ney reports

12 Living with water

Richard Coutts explains why the built environment must adapt to the rising challenge of water

14 Eyes in the sky

Data processing and developing technology will make drones even more practical and lead to their wider use for land surveys, says Philip Buchan

Editorial and production manager: Toni Gill Sub-editor: Matthew Griffiths Designer: Nicola Skowronek Creative director: Mark Parry Advertising: Emma Kennedy T +44(0)20 7871 5734 E emmak@wearesunday.com Design by: Redactive Media Group

Printed by: Page Bros

While every reasonable effort has been made to ensure the accuracy of all content in the journal, RICS will have no responsibility for any errors or omissions in the content. The views expressed in the journal are not necessarily those of RICS. RICS cannot accept any liability for any loss or damage suffered by any person as a result of the content and the opinions expressed in the journal, or by any person acting or refraining to act as a result of the material included in the journal. All rights in the journal, including full copyright or publishing right, content and design, are owned by RICS, except where otherwise described. Any dispute arising out of the journal is subject to the law and jurisdiction of England and Wales. Crown copyright material is reproduced under the Open Government Licence v1.0 for public sector information: www.nationalarchives.gov.uk/doc/open-government-licence

J U N E / J U LY 2 0 1 6

3

RICS L A N D JO U RN A L

CH A I R M E N

FROM THE

CHAIRMEN ENV I R ON ME N T & RESO UR C E S

Andrew

Fitzherbert MRICS

We had an excellent Environment and Resources conference in Nottingham that demonstrated the growing interest in waste, minerals and environmental surveying. Valerie Fogelman of Stevens & Bolton LLP provided an environmental law update and identified how fines for breaches are now being raised to previously unheard of levels. Charles Cowap of Harper Adams University looked at the methods for and application of ecosystem valuation, with case studies.

Tim Paul of SLR explained the planning processes needed to expand the Kilroot Salt Mine in Northern Ireland.

Ken Hobden of MPA meanwhile considered the safeguarding of minerals and argued that their protection has been treated as a lesser consideration in local planning, though it is crucial to supporting growth and infrastructure. He pointed out that in terms of designation, minerals can have less protection than Great Crested Newts. Finally Richard Lashmore, partner at legal firm Knights, reviewed the historic legal context for minerals and the interplay between surface development and mineral ownership.

RU RA L

Gerard

Smith FRICS

I am delighted that the Land Journal continues to cover so many topics of interest to the rural surveyor, and encourage you to let us know if there is anything you would like to see articles on.

4 J U N E / J U LY 2 0 1 6

This edition includes an insightful article on the ever-changing and developing renewable energy sector. The situation is more complex than the wind and solar boom of a few years ago and will require the rural chartered surveyor to offer deeper knowledge and greater support to provide value for clients and secure fees for your firm. The author, Hugh Taylor, will speak at our RICS Rural Conference at the Royal Agricultural University in Cirencester on 15 June. This edition also includes an article on our farm business tenancy suite, with Edward Peters investigating how such agreements have developed and recent changes to them.

As for Brexit, regardless of the outcome of the vote, it is important that we work together to ensure a sustainable and competitive agricultural sector, focusing on productivity and profitability.

Another reminder that the RICS Wales Breakfast is being held in the President’s pavilion at the Royal Welsh Show on 18 July, with a keynote speaker from NFU Cymru. To attend, please email: n fmannix@rics.org

LAND & RESOURCES GLOBAL BOARD

Barney

Pilgrim FRICS

The first meeting of the International Land Measurement Standards (ILMS) coalition, which now consists of 24 international and national surveying bodies with professional, legal and technical interests in land and resources, will be hosted by the UN Food and Agriculture Organisation in Rome, Italy.

This is a coup for the coalition and RICS, underlining the importance of the ILMS as “a standardised, principles-based global land reporting and measurement framework to enable internal and external investment and exchange”.

The meetings and debate on the form, format, scope and focus of ILMS will

take place on 9–10 June. RICS land group has been producing several commentary pieces to help non-land members and others to understand the enormous critical issues at the heart of the discipline. We have looked at: land and corruption — the tip of the iceberg (http://bit.ly/1rzEjJA); corruption and social unrest: coping with rapid urbanisation (http://bit.ly/1QVqtMk); and refugees, stress and paradigm shifts: issues for COP21 (http://bit.ly/1UhdvbX).

GEOMAT I CS

Gordon

Johnston FRICS

The RICS Chair’s day in June offers the professional boards an opportunity to discuss challenges and thoughts for the future. For geomatics, topics include new technologies, standards, ethics, apprenticeships and the rapid growth in importance of geospatial data.

Environmental issues will also feature.

Professional users, in particular, must be competent in the use of technology as well as understanding its limitations. So it’s good news that under the UK government’s trailblazer apprenticeships initiative, the Department of Business, Innovation and Skills has approved the extension of the Level 3 technical apprenticeship (which leads to AssocRICS) to include the land pathway.

Further information will be forthcoming as well as on the more specialised land/engineering surveying pathway.

During the COP21 Paris summit last December, the RICS became partners with the Global Alliance for Buildings and Construction (Global ABC). Recognising the value of the International Property Measurement Standards, the Global ABC appointed the RICS to lead a working group on measurement and accountability, strengthening our position as a key influencer to governments. The future looks very promising.

RI CS LAND JO UR NAL

UPDATE PLA N N I N G & DEV E LO PME N T

Paul

Collins MRICS

The world is too much with us; late and soon, Getting and spending, we lay waste our powers;— Little we see in Nature that is ours; We have given our hearts away, a sordid boon!

When William Wordsworth wrote these lines in 1802, he was criticising mankind’s increasing acquisitiveness, a desire for ‘getting and spending’ rather than appreciating and living with the ‘Nature that is ours’, and questioning our priorities at the beginning of mass industrialisation and commerce.

Two centuries on, we are still grappling with this challenge, though the variables are different and have wider implications.

High-street retail has been contracting for many years and while shopping is changing, spending is not. Buying over the counter is declining but online sales are growing. Some US malls are even being converted into schools and universities (http://n.pr/1tKkeP8).

According to Ipsos, cities such as Newcastle and Cambridge have seen a drop in footfall, although it is up in Nottingham. What is on offer is changing too – as BHS and Austin Reed’s problems show. A visitor from the Department of Communities and Local Government told the last P&D board about the government’s desire to revitalise high streets with starter homes and possibly small grants to pilot fund town centres.

But back to Wordsworth. Rather than ‘getting and spending’, we should be spending and getting more time for Nature. The planet is losing forests at the rate of 48 football fields a minute.

This can’t continue. Wordsworth did not see Nature as a commodity in 1802, and there is a stronger case not to in 2016.

Trig pillars

On 18 April 1936, a group of surveyors gathered round a concrete pillar in a field in Cold Ashby, Northamptonshire, and began the retriangulation of Great Britain.

That trig pillar is still standing 80 years later, along with thousands of others.

The pillars originally formed a network to re-map Britain, and some 6,500 were built for triangulation. The process works by measuring angles to a given point – the pillar – from other known points at either end of a fixed baseline to determine the location of the original.

GeoBusiness keynote Amanda Clack, President-Elect of the RICS, will give the keynote on the second day of the GeoBusiness conference in London, on 25 May. Her talk, “Infrastructure delivery – the state of the industry”, will cover potential headaches with large projects and highlight how integrating geospatial information and data use will be more and more essential for infrastructure delivery. n www.geobusinessshow.com

Party walls update The Boundaries and Party Wall Panel has published a clarification of RICS advice about when the organisation will consider party wall matters complaints.

It is no longer correct to say that RICS will not investigate complaints while party wall matters are ongoing.

RICS will only put an investigation on hold if the member can show that starting or continuing an investigation would affect their ability to carry out their statutory functions, or that the complaint is being used to try to appeal the terms of the award. n http://bit.ly/23HXiCG

Ordnance Survey (OS) teams spent 26 years gathering measurements across Britain to create a highly accurate map of the country. With the modern equivalent being the OS network of 110 global navigation satellite system receivers, the trig pillar is now obsolete, but they still act as a beacon for outdoors lovers.

Hundreds have been lost, but the best source of information for those that remain is: n www.trigpointing.uk

Conference dates RICS CPD Day, Cardiff Cardiff, 8 June

nwww.rics.org/cpddays RICS Rural Conference Cirencester, 15 June Keynote speaker John Varley will look at rural estates’ economic contribution, while other sessions will explore rural housing issues, valuations, information for valuers and compliance visits. n www.rics.org/ruralconference RICS Diversity and Inclusion Conference London, 29 June

Discussions will cover our Inclusive Employer Quality Mark and recently launched online self-assessment tool. n www.rics.org/diversityconference RICS Planning and Development Conference London, 30 June

Housing and Planning Bill progress will be discussed, as will case law, policy, viability and placemaking updates. n http://bit.ly/1TgLQFD RICS CPD Day, Bristol Bristol, 5 July n www.rics.org/cpddays

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RICS L A N D JO U RN A L

P OW E R

Rural energy revival Rather than herald the death of farm-based power last year’s renewable industry policy changes mean lucrative opportunities for landowners, says Hugh Taylor The National Grid is seeking major contracts for its enhanced frequency response market

L

ast summer was a dark time for the large-scale solar and wind markets. Once the Department of Energy and Climate Change (DECC) had withdrawn its incentives – the Renewable Obligation Certificates, Feed-in Tariff and Contracts for Difference – the demand for sites from renewable power developers dried up. It has yet to return.

Nonetheless, these markets are still providing well over a thousand landowners with predictable, long-term revenues.

In securing lucrative leases between developers and site owners, rural practice firms also enjoyed this extraordinary 6 J U N E / J U LY 2 0 1 6

Grid connection at higher voltages can be a costly consideration

various pressures on policy-makers are such that the UK is bound to see a resurgence in utility-scale renewables.

This new and evolving context is more complex than the wind and solar boom, and will require a deeper knowledge and greater level of support from chartered surveyors if they are to offer value for their clients and secure fees for their firms.

A question of capacity

bubble. But while their clients can enjoy high, index-linked ground rents for the next 30 years or so, renewables income all but dried up for land agents in the second quarter of 2016.

The UK energy sector, like those elsewhere in the world, is in a state of dramatic and unpredictable change.

Some of this is driving strong demand in non-renewable power technologies, which is in turn pushing a demand for sites – demand that will arguably be greater in the coming five years than it was for wind and solar from 2010 to 2015. With ground rents approaching £100,000 per annum for prime sites of under an acre in size, this is a development worth understanding.

Furthermore, market forces and the

DECC’s overriding responsibility is to provide security of energy supply to UK homes and businesses, but it is becoming increasingly challenging to fulfil this responsibility. Since 2010, 26 power stations have been decommissioned and DECC has called time on coal-fired power. A further 43 power stations are scheduled to close by 2030. Altogether, these closures represent a total of 50GW, which is 55% of UK power capacity.

The mechanism for ensuring investment in new capacity – which is vital to keep the country’s lights on – is the capacity market. This is a yearly auction that provides an annual retainer to operators, paid on a per-kilowatt basis. New-build schemes attract 15-year capacity contracts.

An important feature of the capacity market is that it does not differentiate between technologies, levels of efficiency,

RI CS LAND JO UR NAL

“ Smaller embedded

schemes on farms can secure reliable, lucrative contracts

on farms can therefore secure the reliable, lucrative and long-term new-build capacity contracts.

A 20MW genset scheme awarded a capacity contract following the 2015 capacity auction will earn predictable capacity payments of £340,340 plus VAT per year, index linked, for 15 years from 2019. This amounts to more than £5m from just one of the available sources of revenue.

Boom time looms

emission levels or the cost of power generated. The bidding process naturally favours schemes that are cheaper to install or which have the greater number of revenue streams.

The cheaper power plant technologies to acquire and install are reciprocating engines, the gas- or diesel-fueled internal combustion engines known as gensets. Like solar and wind farms, these are typically between 5MW and 20MW in capacity.

Deployment costs include connection to the grid. Being relatively small in scale, gensets are normally embedded in the distribution network, and therefore benefit from the relatively low connection and operating costs associated with connecting at 11,000V or 33,000V. By contrast, combined-cycle gas turbines (CCGTs), against which gensets compete in the capacity market, typically inject into National Grid’s transmission network and bear the significant costs of connecting and operating at higher voltages – 275,000V or 400,000V. There are also revenue streams exclusively available to embedded generators, which include payments from distribution network operators (DNOs) and, indirectly, from National Grid, notably its Triad market (see below).

Smaller, embedded schemes deployed

DECC will increase the volume of capacity it will buy in the December 2016 auction and hold an extra auction in early 2017 for contracts to start that year. This will result in up to 20GW of new-build capacity contracts being let over the coming two years.

Given that only 2GW of new-build capacity was let in the 2015 round, that is a significant increase in demand.

Unless the laws of supply and demand fail, the clearing price that will be achieved at the 2016/17 auctions – that is, the annual retainer paid to operators – will be higher than the £18/kW achieved in December 2015.

As well as driving up ground rents for prime land, this situation will loosen operators’ relatively tight criteria for sites, and therefore open up more landowners’ ground for development.

For example, operators will invest more in electrical grid connections, so immediate proximity to the 33,000V network may be less critical. Likewise, they may bear the cost of running longer pipelines to access the gas grid, and their demand for sites will increase their tolerance for those they might previously have rejected on planning grounds.

National Grid’s balancing act National Grid is responsible for reducing the highest peaks in demand, which always occur on winter evenings, and balancing real-time supply and demand across its transmission network.

Winter peak demand, which reached 51GW in winter 2014/15, is primarily managed in the Triads. These are a per-megawatt penalty imposed on energy suppliers for their net supply of power during the three half-hour “settlement periods” of highest national demand in winter, from November to February.

Energy suppliers avoid these penalties by buying power from genset operators during the peak demand windows. As Triad avoidance revenues can be around

£35,000/MW, generation during these periods is very lucrative.

National Grid accesses extra power via its reserve services, the most widely known of which is short-term operating reserve (STOR). The STOR acronym has become synonymous with gensets, although this is not necessarily helpful given that it is just one of a raft of revenue opportunities available to operators, and is typically of lower value than both capacity market and Triad-avoidance revenues.

Of increasing relevance are the frequency response services, which National Grid operates to balance grid frequency; frequency is a changing variable determined and controlled by the second-by-second balance between system demand and generation. To keep system frequency within statutory limits, National Grid procures generation and demand reduction that is held in automatic readiness.

An operator’s frequency response revenues will be determined principally by the speed of power output that it can provide. The faster the response, the higher the revenues that will be available.

As a rule, power storage technologies such as battery and flywheel respond the fastest, followed by pumped storage, diesel gensets, gas engines and then gas turbines.

Diesel power plants produce higher emissions, kilowatt for kilowatt, than coal – but they also provide the cheapest capacity in National Grid’s annual capacity auctions. This is at the cost of cleaner power technologies, such as CCGTs, which would otherwise secure lucrative capacity contracts.

DECC is addressing this issue. In its March 2016 capacity market reform publication, it stated that it “plans to take swift and appropriate action”, indicating that the Department for Environment, Food and Rural Affairs will consult on emissions limit values this year and that legislation is likely to come into force in 2018. These emissions limits will halt the proliferation of diesel gensets, and those landowners or agents tempted by diesel developers’ money should beware.

In 2015, National Grid announced its 200MW enhanced frequency response (EFR) market with a performance criterion of deploying 100% active power output within a second of registering a frequency deviation. One of the few technologies that can meet this criterion is battery storage. n J U N E / J U LY 2 0 1 6

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RICS L A N D JO U RN A L

P OW E R

This market, whose first auction is scheduled for June, was publicised just as DECC withdrew incentives from the solar and wind industries. A number of developers therefore dragged themselves from the renewables industry towards battery storage and are offering farmers leases, in order – theoretically – to operate battery schemes on their ground.

While National Grid is procuring this 200MW in as few as four contracts of up to 50MW, these developers are undeterred. At the time of writing, the country’s three largest network operators – Western Power Distribution, SSE and UK Power Networks – had already received 10GW of grid connection applications for battery storage schemes.

This EFR market is arguably 50 times over-subscribed already.

Given that EFR schemes don’t benefit from the bulk of the revenue streams available to other power plants – capacity, balancing services and the energy market – and battery technology is incredibly expensive at present, gensets will be more appropriate than batteries for many sites.

Charlatans vs surveyors The emerging and evolving power plant markets are attracting new entrants on an almost daily basis. In these markets, accessing and maximising all the available revenue streams is incredibly complex. Sometimes, as with battery storage, there are considerable risks associated with the technology. In all cases, significant capital is required. It is an unfortunate fact that developers, particularly those in the storage market, often lack expertise, and many cannot bring a significant scheme to fruition.

The right to connect to the grid is the key to any power scheme, and the premium paid for sites relates directly to the scarcity of these. Grid rights for a single site have, in some instances, been worth over £5 million for a 30-year lease.

This should focus the mind.

As competition for dwindling grid capacity increases, the value of technical, strategic and tactical grid-related skills also increases. Identifying connection opportunities, creating grid rights, safeguarding those rights and safely marketing a site to the most appropriate operators of the most suitable technology all require specialist expertise.

Furthermore, understanding the pitfalls that will rob a landowner of their chance to benefit from grid rights is fundamental.

While there are many common errors, the most frequent is signing a letter of 8 J U N E / J U LY 2 0 1 6

k The energy market is transforming and landowners need to beware of signing away grid rights authority allowing a developer to submit a grid application for a site.

By doing so before terms are agreed, your client will also be signing away their grid rights, handing control to the developer. The client is thereby denied both a raft of risk mitigation measures and the opportunity to put their site out to competition, and they will negotiate from a position of weakness.

The future of rural power The future of large-scale rural power lies in the buoyancy of the markets for embedded power technologies and in the availability of cost-effective grid capacity.

Gensets are certain to provide revenue opportunities in the short term, although Ofgem is consulting throughout this year to remove embedded benefits, which are perceived to give peaking schemes an unfair advantage.

There will be over 25GW of intermittent generation, mainly in the form of offshore wind, deployed between now and 2020.

This will increase National Grid’s demand for grid balancing services from genset and storage operators, and therefore increase revenues.

According to Carbon Trust estimates issued in March, storage could save the UK £2.4bn by 2030, and the capital cost of battery technology will halve by 2020. One day soon, battery operators – of which there are a limited number of experienced and well-resourced players – will be able to offer value for a wider pool of landowners.

Renewable power technologies, which are normally intermittent by nature, will in the short to medium term rely on a change in energy policy. A policy reset is long overdue, and recent signals from

industry and the government suggest that legislation may be passed to enable a more diverse mix of technologies to meet the UK’s 2030 and 2050 decarbonisation targets. A resurgence in renewables is likely.

Grid availability, while being helped by innovation and investment at the DNO level, will continue to deteriorate. So a significant policy shift will be necessary if rural power is to achieve its full potential.

The rural power sector is becoming increasingly complex and changeable, and as a result harbours a growing number of risks. Independent advice should be sought from specialist grid advisors who have the strategic, tactical and technical expertise to create, safeguard and monetise grid rights for your clients.

Understanding the sophisticated rules and regulations around the capacity market, balancing services and renewables incentives and keeping up to date with policy are all necessary in creating value for landowners. C

Hugh Taylor is CEO of consultancy Roadnight Taylor Ltd hugh@roadnighttaylor.co.uk

Related competencies include Access and rights over land, Land use and diversification

NATUR A L C O NSERVATIO N

RI C S LAND JOUR NAL

Guidelines for bat surveys

T

Morgan Taylor outlines the latest good practice advice from the Bat Conservation Trust on conducting surveys for planning and development

he Bat Conservation Trust (BCT), an NGO concerned with UK bat conservation, recently published the 3rd edition of its good practice guidelines, Bat Surveys for Professional Ecologists.

This document builds on the previous, 2012 version to provide a basis for bat surveying in relation to planning and development by consultant ecologists.

Bats are primarily protected in the UK under the Wildlife and Countryside Act 1981 (as amended) and the Conservation of Habitats and Species Regulations 2010. It is an offence to capture, kill, injure or disturb a bat or to damage, destroy or obstruct its roost. The National Planning Policy Framework and biodiversity action plans also ensure that conservation of bats and their habitat represents a material consideration in the planning process.

There are 18 species of bat in the UK, all of which employ echolocation to navigate and catch their insect prey. Bats provide valuable ecosystem service functions – that is, they participate in natural processes that benefit humans – and act as useful indicator species for the health of our natural environment. But many bat species are threatened by continued loss of roost space, extensive urbanisation and habitat fragmentation and loss.

It is therefore important to consider bats during the development process, both from a planning and legal compliance perspective and with our own best interests in mind.

Accordingly, the approach taken in bat surveying is important in any application where suitable habitats could be affected or lost.

Developments often need to consider buildings, structures and trees that have potential value for roosting bats and assess potential impacts on their commuting routes and foraging areas.

Foraging and commuting habitats do not necessarily have direct statutory protection and have been subject to less scrutiny.

a robust assessment of the potential impact on that roost and mitigate accordingly.

Bat roost inspection surveys for trees More robust guidelines have been provided, with one notable change being a reduction in the number of surveys needed for trees that are classed as low value for roosting. Further clarification on where climbing surveys may be used is also provided, building on information from the 2013 Bat Tree Habitat Key document.

Data analysis and interpretation In many instances, consultants will use the word “significant” to describe results without scientific analysis to support this conclusion. Data in many cases will now have to be reviewed and statistics used to show the significance of the results. This enables conclusions to be based on statistical inference as well as professional and technical opinion – for example, when comparing the importance of different sites for bats. Bat pass rates can be measured and compared according to the type of site. Being able to conclude that there is statistical significance to the difference between the relative importance of multiple sites will enable more robust conclusions to be made.

Conclusion Guidance has to tread a fine line between what is meaningful from a scientific perspective and what can realistically be achieved with respect to the costs, logistics and time frames of planning. It will always come down to the individual ecologist to make the final judgement about what they feel is appropriate and proportionate for each project.

However, guidelines such as these offer an important basis to inform the approach, providing consistency throughout the industry, adding scientific rigour to survey design. They will also continue to be the survey guidelines to which planning officers and interested parties refer when reviewing bat survey reports, making it important to understand what might be required. C

Guideline updates Many of the updates to the BCT’s guidelines relate to improved accessibility and clarity for consultants. However, the following key points have been added.

Species core sustenance zones This defines the areas surrounding a roost where the quality and availability of suitable habitat will stand to influence its status significantly, according to species. This information should be used with care, particularly given the relative paucity of data on some species.

However, it provides a useful basis to assess the impacts on a roost from habitat degradation related to development. These core sustenance zones provide a formal basis for undertaking impact assessments; the implications are that development some distance from known roosts may still have to undertake

Morgan Taylor is Senior Consultant at Greengage morgan.taylor@greengage-env.com

www.greengage-env.com Bat Surveys for Professional Ecologists: Good Practice Guidelines is available at: www.bats.org.uk/pages/batsurveyguide.html

Related competencies include Planning, Development Appraisal

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RICS L A N D JO U RN A L

LIGHT

Michael Ney outlines new RICS guidance on the often controversial issue of rights of light

D

Seeing the light o you have clients or potential clients with questions about rights of light?

Questions regarding light are becoming more common.

There are several factors that contribute to this: the availability of information on the internet means that more people are aware of the issue; people are much more likely to complain nowadays than in the past; and pressure from the government requires local planning authorities to seek denser development in response to the housing shortage, meaning that buildings are built higher and closer to others than before.

The most common misconception is that the planning process deals with the matter of light. This leads to the mistaken belief that once planning consent has been granted, there is nothing further that affected neighbours can do about the loss of light or overshadowing that they might, or will, suffer.

Many members may also be unclear as to what planners can and cannot do, so they find themselves uncertain as to what advice to give to clients. Most local authorities do have policies in their local plans, or in supplementary planning documents made under those plans, to protect the amenities of nearby residential properties. Some authorities, such as Westminster City Council, also protect the amenities of educational buildings.

Planners can thus consider the effects that any proposals have on surrounding buildings, and may use that information to inform their decisions. This matter is dealt with in greater detail in the guidance note on Daylighting and Sunlighting.

In England, Wales, Northern Ireland and the Republic of Ireland, where a building – whether residential, commercial or industrial – has benefited from a flow of light from over someone else’s land through its defined apertures, usually windows, for an uninterrupted period of 20 years, the building normally obtains an easement to that flow of light by operation of the Prescription Act 1832 or the Prescription (Ireland) Act 1832. There are other methods of obtaining such an easement but these are more fully addressed in the Rights of Light guidance note. Similarly, there are restrictions on obtaining prescriptive easements, such as where there is common ownership of the lands or where land over which the light flows belongs to the Crown.

Where an easement has been established, and the owner of the land over which the light flows wishes to build in such a way as to reduce the flow of light through the windows significantly, then the affected owner can take legal action to protect their easement. Indeed, it is the only way they can protect their easement, because the planning authority cannot assist them.

1 0 J U N E / J U LY 2 0 1 6

“ The most common

misconception is that the planning process deals with the matter of light

Dealing with matters of rights of light can be fiendishly difficult. Does the dominant owner really have an easement? Is that easement really adversely affected? Are there reservations preventing them gaining rights of light and air? Do they have the benefit of the Housing Act 1985, Schedule 2? If the affected property’s owner has an easement and it really is affected, how should they defend their rights? Can they afford to go to law?

Can they afford to take the risk of not winning?

If acting for a developer, the questions are just as risky: b does the neighbour have rights and are they affected? b if they were to take legal action and win, would the court be likely to grant an injunction or an award of compensation? b might the development scheme need scaling back? b if compensation is awarded, would that be based on a share of the developer’s profit? b can a developing owner insure the risk or should they approach the affected neighbours and offer them money? b doesn’t planning permission deal with all such matters in any case?

Images © Alamy

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James Kavanagh MRICS, Director RICS Land Group, writes: The chartered surveyor has an established role as an expert dealing with the enjoyment of natural light in the built environment. This guidance note deals solely with easements known as “rights of light” and the approach to be adopted by surveyors. It is aimed principally towards the practitioner who may not be an experienced specialist in rights of light, although it is hoped that all chartered surveyors will find the guidance useful.

For the purpose of this guidance note, a right to light is a private, legally enforceable easement or right to a minimum level of natural illumination. This right applies through a “defined aperture”, usually a window opening, whether conferred by express or implied grant or obtained at common law by a process of long, uninterrupted enjoyment known as “prescription”. As with all easements, there is a dominant tenement that enjoys the rights and a servient tenement that is subject to and carries the burden of their existence.

The purpose of this guidance note is to assist the surveyor in the following: b providing accurate and comprehensible information to clients with as little room for misunderstanding as is practicable b ensuring that, in the event of a dispute over the impact of rights of light, the facts are set out in a manner that assists the parties and their legal advisors b safeguarding the interests of owners, investors, insurance providers and others who rely on a chartered surveyor’s report on or evaluation of rights of light, whether assessing the viability of a potential development or the negative impacts of a development proposal by others.

The aim of the RICS Boundaries and Party Walls Working Group (BPWWG) and RICS Dispute Resolution Service is to encourage private individuals, businesses and professional advisors, particularly in the legal profession, to select a qualified chartered surveyor who can review a proposed

To help members who may be getting more enquiries on rights of light, the rights of light sub-panel of the Boundaries and Party Walls Working Group (BPWWG), under the chairmanship of John Lytton FRICS, has drafted a new guidance note recommending best practice for members. This note was published in March and is now available for download to members. Whether you deal with the matter in house or pass it on to another practice, the sub-panel recommends the new guidance note to all members so that they can give the best advice to their clients.

Servitudes of light in Scottish Law are different from easements in England and Wales or Ireland, though this is not the case in relation to daylight and sunlight because most Scottish planning authorities, as well as English, Welsh and Irish ones, use the criteria set out in the Daylighting and Sunlighting guidance note, and you should study this carefully when advising on planning matters.

There are also recent and forthcoming changes in the Law of the Tenement, so the BPWWG cannot advise members on the application of servitudes of light in Scotland in this guidance

scheme and give expert advice on the potential implications of loss of light.

Some individuals and businesses may seek advice from unqualified persons, often to the detriment of accurately identifying the problem and invariably leading to unnecessary loss or expense or ill-founded litigation. Accurate information and assessment at an early stage can assist in obtaining a prompt and cost-effective resolution.

The 2nd edition of the guidance note has been updated with recent case law and industry best practice, and includes an expanded section on the intricacies of right to light spatial measurement (three-dimensional modelling) and the method of assessment (Waldram diagrams), as well as “loss” evaluation and compensation.

It also contains a new appendix explaining rights of light and trees, while expanded sections on appropriate procedures, legal issues, research, instructions, insurance and alternative dispute resolution help strengthen the guidance note and bring it into line with other dispute-related guidance titles from RICS such as Daylighting and Sunlighting 1st edition (2011), Boundaries 3rd edition (2014) and Party Walls 6th edition (2011).

The new edition of the Rights of Light guidance note also contains in-depth appendices that should help both the expert practitioner and those wanting to learn more. The appendices themselves include sample forms, letters (such as form of release and scope of service), checklists (insurance) and survey specifications (measured survey and a Rights of Light customised survey detail accuracy table), as well as notices and agreements (RICS Model Mediation Settlement Agreement).

For further information on daylight and sunlight, see also the Building Research Establishment (BRE) publication Site layout planning for daylight and sunlight: a guide to good practice (BR 209, current edition).

note. The technical aspects may be of some assistance, but the summary of the law is quite different. b Michael Ney FRICS is a director at Schroeders Begg Ltd and a member of the RICS rights of light guidance sub-panel m.ney@sbegg.co.uk

Daylighting and Sunlighting guidance note, 1st edition http://bit.ly/1XiVGYF Rights of Light guidance note, 2nd edition http://bit.ly/1PVZDNb

Related competencies include Development/project briefs, Legal/regulatory compliance, Measurement of land and property

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11

RICS L A N D JO U RN A L

F LO O D I N G

The built environment needs to adapt to the rising challenge of water, as Richard Coutts explains

Living with water

W

ater has always shaped our built environment and will continue to do so.

We depend on it; we use it; we live with it; and, consequently, we must also respect it.

In both its absence and abundance – drought and flooding – water will pose one of the most serious challenges to society in the 21st century and beyond.

However, it can, through considered design, be used to create beautiful and resilient cities.

This winter, the failure of recently constructed UK flood defences in northern England was exposed during floods in Cumbria and Yorkshire. Combined with a higher frequency of storm events over the last decade, this has contributed to a growing realisation of the uncertainty around weather patterns and an awareness that reliance on traditional flood defences alone is not working.

With Environment Agency Deputy Chief Executive David Rooke asking for a “complete rethink”, it is timely that Aquatecture: Buildings and cities designed to live and work with water by myself and Robert Barker was published by RIBA in January (http://bit.ly/1xSCnte).

Fundamentally, ‘aquatecture’ seeks to make space for water in developments rather than trying to keep it out. The book illustrates how this is being done with examples from around the world, as well as providing examples of the opportunities that water can offer.

It is intended as a non-technical introduction to designing with water for policy-makers and professionals, based on an updated version of our Long-term Initiatives for Flood-risk Environments (LifE) Project, and the findings of complementary research undertaken for the Environment Agency, Technology Strategy Board and World Bank.

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Figure 1 The LifE approach

It also introduces the reader to a range of new techniques that rethink the way we tackle water through design and planning, such as flood-resilient and amphibious building, zero-carbon development, sustainable urban drainage systems (SuDS) and new methods of waterfront design.

The book is organised into four disciplines – infrastructure, landscape, planning and aquatecture – that are explored individually then brought together in case studies at the scales of region, city, neighbourhood and building.

The LifE approach In 2005, we established the LifE Project, an integrated design approach to planning and building that seeks to reduce flood risk through sustainable design. It adopts a non-defensive approach to flood risk management, promotes the creation of space for water, and upholds the highest environmental design standards.

New developments built according to the LifE principles would reduce overall flood risk, help to mitigate the effects of climate change and deliver high-quality, sustainable and resilient settlements. The LifE Project received UK government funding through the Department for Environment, Food and Rural Affairs Innovation Fund in 2007. An expert team sought to establish and test the LifE principles by masterplanning three sites in the UK, although the principles are transferable to other countries.

Fundamental to the approach is a shift from traditional flood prevention towards

a less defensive approach. Space is made to store water, and for water to flow through predetermined parts of settlements without significant disruption to people. The space between buildings, which is designed to flood, could provide other functions when not flooded, such as recreation or energy generation, in a multifunctional way that demonstrates integrated planning.

The approach is based on three essential considerations: b development pressure – the need to build and support a growing and ageing population, and the need to improve all development to ensure better living conditions and wellbeing b environmental change – caused by both human-induced and natural processes, including pollution, habitat destruction, overextraction of fresh water, land degradation and climate change b increased risk of flooding – more frequent and more severe flood events that affect a greater number of people and businesses.

The proposed response is illustrated by three intersecting approaches that incorporate the LifE principles: b making space for water – working with natural processes to provide space for water (rain, rivers and sea) to expand during times of flood, reducing reliance on flood defences b living with water – developing communities that are designed to anticipate, cope with and recover quickly from flooding, with little or no impact on their daily lives b eco-design – harnessing natural resources to create low-energy developments that have a positive impact on the environment and seek to reduce carbon emissions.

At the centre of the Venn diagram (see Figure 1), the principles converge in an holistic approach, integrating planning, architecture, landscape and engineering to create multifunctional spaces and buildings and provide storm and floodwater attenuation when necessary.

These principles underpin the design philosophies of the architecture, masterplans, and landscape and engineering solutions used in aquatecture. They are illustrated at a range of scales through case studies

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The UK’s first amphibious house in Buckinghamshire

Nijmegen, the Netherlands: aerial view of the relief channel

that show how the LifE approach may be applied to create resilient communities.

Aquatecture Individual properties may require flood protection where it is not possible to reduce the risk of flooding through planning or landscaping measures alone, or where there is a residual risk.

Historic buildings or key buildings such as hospitals, communication hubs or safe havens may also need protection.

Five main approaches to tackling flood risk at building scale have been identified.

1. Flood avoidance: This approach works by locating buildings away from flood risk areas or lifting buildings above the water level on stilts or raised land.

2. Flood resistance: Also known as dry-proofing or water exclusion strategy, this approach seeks to keep water outside the building by blocking ways for the water to enter and providing a water-resistant building fabric.

3. Flood resilience: Also known as wet-proofing and water entry strategy, this approach allows the water into a building in a controlled way and relies on the use of internal water-resilient materials and detailing to prevent permanent damage and allow quick recovery after a flood.

Images © Baca Architects

4. Floating: This approach works by permanently floating the building on water, enabling it to move up and down with the floodwater and preventing people and property from being flooded.

5. Amphibious: With this approach, also known as can-float, the building is fixed to a buoyant base that rests on the ground but is designed to float when floodwaters rise, temporarily creating a floating structure (see photo, top, and also Building Control Journal November/December 2015, p.10).

Dutch project In 1993, heavy rainfall led to flooding in Limburg in the south east of the Netherlands. In 1995, water in the Dutch river and dyke system rose to such alarming levels that a quarter of a million people were evacuated from their homes.

This close call led to a shift in approach, from holding out water through defensive means to acknowledging that space for water was needed; thus, the Room for the River project was born.

The Dutch government identified that the discharge capacity of the river system had to be increased to cope with heavier discharges than previously anticipated, in response to climate change. This needed both a national and regional approach, in

particular in the Maas/Rhine river deltas – IJssel, Waal and Nederrijn. It also involved 17 partners, including Rijkswaterstaat, the Dutch Department for Public Works and Water Management.

The Room for the River project involves a range of measures, including relocating dykes, lowering floodplains, enlarging the river channel, removing obstacles to flow such as groynes or bridge supports, and flood-relief channels.

Although these approaches require considerable engineering, another, overarching objective was to improve the environmental quality of the river system.

One of the key projects is located on the River Waal between Nijmegen and Lent (see photo, left). Nijmegen is located on a pinch point in the river, around 17km downstream of Germany; it will see a €365m new flood-relief channel and dyke installed to reduce the risk of flooding regionally and help support the redevelopment of Lent.

Baca Architects was engaged to provide landscape and development ideas for the island created by the new waterway. The proposals for an eco-tourism destination embrace both the water and the landscape with recreation facilities and innovative flood-proof buildings on the waterfront.

This major engineering project has been the catalyst for new homes, transport improvements and landscaping; this benefits the city and wider region, as well as the local environment. By considering the potential broader benefits from the start of the project, a more integrated solution has been found rather than just a cost-driven one.

This shows that managing increased flood risk can simultaneously help reduce pressure for development and provide environmental benefits. Construction on the flood relief channel began in 2013 and is due for completion this year.

As first the motor car and then health and wellbeing transformed 20th century town planning, in the 21st century it will be water that shapes our communities.

Unless we begin to address the effects of flooding and drought now, the consequences are likely to worsen over the coming century. Aquatecture offers an alternative approach to traditional flood defence-based solutions in an accessible way, and highlights opportunities for innovation across the construction sector. C Richard Coutts is Director at Baca Architects rcoutts@baca.uk.com

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13

RICS L A N D JO U RN A L

DRONES

Eyes in the sky Data processing and developing technology will make drones even more practical and widely used for land surveys, says Philip Buchan

I

n the last few years, unmanned aerial vehicles (UAVs) have become an increasingly viable tool for land surveyors. Autopilots, batteries, cameras and airframes have become smaller, lighter and cheaper, putting UAVs within the reach of survey professionals.

Aerial imagery of commercial quality can be acquired for a number of purposes, including aerial surveying, industrial inspection, construction progress monitoring and search and rescue.

In the land survey sector, UAVs are now being deployed to capture high-resolution aerial imagery that can be processed using advanced photogrammetry software to generate accurate topographic survey information, including digital elevation models, 3D point clouds and orthophotos.

UAV-acquired information is highly beneficial for assessing potential site locations, designing layouts, generating 3D visualisations, assessing site visibility, calculating earthworks volumes, monitoring construction progress and producing as-built records.

Case Study 1: Network Rail Dover

The main benefits of a UAV survey compared with a traditional land survey are that: b site work is carried out far quicker b surveyors reduce their exposure to risk b limited site access is required b inaccessible or hazardous areas can be surveyed remotely b improved data is available with high-resolution aerial imagery b it is more cost-effective.

LiDAR comparison Over the last few years, light detection and ranging (LiDAR) surveys have become popular for large-scale survey projects, being carried out by a manned aircraft flying at 1,500ft or above. A UAV survey offers significant advantages over a LiDAR survey, however, in that: b it is more responsive and has a quicker turnaround b UAVs fly lower, so atmospheric issues are reduced b digital imagery from UAVs is of a higher resolution b UAVs can get very close to particular areas of interest b it is more cost-effective.

UAV operation and safety

Drone's-eye view of Dover sea wall

In late December 2015, a severe storm damaged a sea wall protecting the Dover to Folkestone railway line, undermining the rails and forcing the temporary closure of the route. Cyberhawk used a multi-rotor UAV platform to survey an area extending to 900m along the coast within one day. Geo-referenced orthophoto imagery at 2cm ground resolution, 3D point cloud and vector survey data with a verified level accuracy of 20mm root mean square was collected for the client, along with oblique inspection imagery of the sea wall, aerial spherical imagery and aerial video footage showing the wave action. Cyberhawk also flew at low tide to collect topographic information on the beach, which had changed profile due to the storm.

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UAVs come in two main types: fixed-wing and multi-rotor. Fixed-wing UAVs, which are normally less than 2m in wingspan and 4kg in weight, are ideal for mapping areas up to 2,000 hectares. Typically, they have a flight duration of up to an hour, which could allow an area of 50–100 hectares to be photographed per flight, and a whole project to be completed within two days. Multi-rotor UAVs, usually being less than 1m in length and 2kg in weight, have a shorter flight duration, but have the advantages of being able to perform a vertical take-off and landing and hover to acquire oblique or panoramic imagery. Cyberhawk, which uses both types, is a national qualified entity recognised by the Civil Aviation Authority (CAA), which means that the

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Case Study 2: Gryphon FPSO Internal Tank Inspection, North Sea. Floating production, storage and offloading (FPSO) vessels are used for the production and storage of hydrocarbons.

Cyberhawk’s client, Maersk Oil, requires visual inspections of its cargo tanks for integrity, damage assessment and class certification. This type of inspection is usually conducted by rope access technicians.

Cyberhawk mobilised an experienced two-man UAV team, consisting of a UAV pilot and inspection engineer. The inspection of the critical components of the tank was completed within a day, whereas with rope access it would usually take between three to four days for the same scope of work.

Inspecting the tank with a UAV allowed Maersk Oil to undertake a quick, safe audit and identify and plan for any possible contact-based inspections in both this and other tanks.

Pilots need to have care and experience

team is able to certify its own pilots internally to CAA standards.

Flight planning The process of carrying out a topographical survey is not simply a matter of flying a UAV around a strip of land. It requires care, experience and pre-planning, as is outlined in the following steps. b Ground control points are established across the area of interest and precisely positioned using GPS equipment. b A flight plan is prepared taking into account the area to be surveyed, wind direction, take-off and landing areas, the image resolution required and maximum flying height. b The flight plan is then uploaded to the UAV wirelessly. b The UAV is launched and will follow the flight plan using the on-board autopilot system. A series of overlapping vertical Images © Cyberhawk

images are taken at locations defined in the plan. Once the planned flight is completed, the pilot will bring the UAV in to land at a suitable location. Most survey UAVs have an automatic landing function, but it is important that the pilot has the skills to land the craft safely under any site conditions. b The images and GPS photo logs are downloaded from the UAV. When processing the data, the ground control points are identified and coordinated in the photos. The software uses photogrammetric principles to calculate the topography from the numerous overlapping images. b The resulting output is a digital elevation model that can be produced on a grid with a resolution of less than 1m, as well as in geo-referenced orthophotos – aerial photographs with a uniform scale similar to a map that can be provided at resolutions down to 2cm. b UAV survey data is issued to the client in formats that will be compatible with standard software packages such as AutoCAD, Civil 3D and ArcGIS. Geo-referenced imagery is supplied in standard image formats, such as jpeg, png or tiff.

This method of data acquisition and processing is rapidly evolving. Cyberhawk has recently commissioned its latest fixed-wing UAV platform, which features on-board precision GPS, eliminating the need for ground control points to be established on site. The system has a flight endurance of up to 2.5 hours and a parachute recovery system. With the CAA’s extension of line-of-sight permission up to 1.5km from the ground-based pilot, this system will allow much larger areas to be surveyed in a single flight.

Data analysis is also developing rapidly, with cloud-based processing becoming a viable alternative to office-based systems.

In the near future, survey-grade data will be available almost immediately, sent directly from the UAV to the cloud via 4G

networks and delivered to the client in a browser-based viewer.

UAV inspection Multi-rotor UAVs are also being used for close visual and thermal inspection of tall and inaccessible industrial assets.

UAVs have the ability to hover close to structures to acquire high-quality images that can inform asset maintenance decisions. This technique has been rapidly adopted by the onshore and offshore oil and gas industry on a global basis, and Cyberhawk also provides aerial inspections of chimneys, cooling towers, transmission towers, overhead line equipment for railways and onshore and offshore wind turbines. This enables planning of plant shutdown and repairs, removes the need for working at height and offers major cost savings compared with traditional inspection techniques such as rope access, cherry-pickers and scaffolding inspections.

Future developments In future, UAVs will benefit from improved battery and digital camera technology.

New sensors are being trialled with UAVs, including LiDAR, near-infrared cameras and gas detectors. It is also expected that payload limits and flight durations will rise as new UAVs come to market. C

Philip Buchan is Commercial Director at Cyberhawk philip@thecyberhawk.com

www.thecyberhawk.com

Related competencies include Remote sensing and photogrammetry, Legal/regulatory compliance, Spatial data capture and presentation

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15

RICS L A N D JO U RN A L

FA R M TE N A N CI E S

Edward Peters summarises recent updates to the RICS precedents for farm business tenancies and agricultural licences

Setting precedents

T

Twenty years ago, the market in the grant of agricultural tenancies was significantly liberalised and deregulated by the Agricultural Tenancies Act 1995, which introduced the concept of the farm business tenancy (FBT).

Under the previous statutory regulation regime – which had been governed by the Agricultural Holdings Act 1986 and its predecessors – the grant of a new agricultural land tenancy had become a particularly unattractive prospect for most landowners.

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As developed by various postwar governments, the agricultural holdings legislation had given farm tenants the benefit of extensive statutory security of tenure, succession rights and restrictions on rent increases. However, as with the Rent Acts in the residential sphere, the impact on the new lettings market had been predictably dire.

The percentage of farmland that was let, as opposed to being farmed freehold, had fallen very substantially, while arrangements such as contracting agreements, partnerships, share farming agreements, grazing licences and Gladstone v Bower agreements were used with increasing frequency to avoid creating new tenancies protected by the 1986 act.

As a result of the introduction of the FBT in 1995, the grant of new

agricultural tenancies once again became an economically viable move for the owners of farmland, and the number of landlords willing to grant new agricultural tenancies began to grow again. A survey conducted by RICS in 1994 predicted that about a million acres of new lettings could be anticipated after the act came into force.

New precedents for farm tenancy agreements were needed, to take account of the statutory requirements that were introduced by the 1995 act, and to meet the revived demand for granting farm tenancies.

As a result, RICS created – for the benefit of its members – a suite of new precedents for various different types of FBTs, together with precedents for cropping and grazing licences. The aim of the suite was to provide a

range of agreements that did the following: b complied with all the statutory requirements of the 1995 act b struck a fair balance between the interests of the landlord and tenant b accommodated the ever-changing rules and regulations concerning both farm subsidies and environmental requirements.

Format of the agreements After the latest revisions to the agreements, the suite includes the following formats: b fixed-term agreement b year-to-year agreement b short-form agreement (two years or less) for bare land b short-form agreement (two years or less) land with buildings but no dwellings b cropping licence b grazing licence.

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RICS Agricultural Tenancies Monitoring Group The suite of RICS FBT agreements and licences is subject to regular review and updating by the Agricultural Tenancies Monitoring Group – which comprises specialist members of RICS as well as a barrister member – in order to take account of relevant changes in landlord and tenant law, and alterations to the legislation governing agricultural subsidies and entitlements and environmental regulations.

The current members of the RICS Agricultural Tenancies Monitoring Group are: b Chair: Mark Sanders, MRICS, ACIArb (Acorn Rural Property Consultants) b Eifion Bibby, MRICS (David Meade Property Consultants) b Martin Herbert, FRICS FAAV (Brown & Co.) b Josie Palmer, MRICS (Fisher German) b Robert Paul, MRICS (Strutt & Parker) b Kathryn Perkins, MRICS FAAV (Edward H. Perkins) b Edward Peters, FCIArb (Falcon Chambers) b David Sayce, MRICS b working with Fiona Mannix (Associate Director of RICS Land Group).

The range of different forms of FBT permitted by the 1995 act, with their different consequences for modes of termination and so on, is reflected by the choice the 2016 suite offers.

The suite also includes two licences, for cropping and for grazing, which are intended to create agreements outside the scope of the 1995 act.

The accompanying user notes draw members’ attention to some of the more pertinent issues that need to be considered when entering into one of the agreements being contemplated.

Members can either use the precedents as they stand, with appropriate deletions where the agreements contain either/or options for certain clauses, or can vary them as appropriate to suit the particular circumstances in which they are to be used. In their published form, they are envisaged as suitable for use in England and Wales only.

Recent changes Milk quota abolition Milk quota was abolished in 2015. As a result, the various specific provisions dealing with milk quota have been removed from the 2016 suite of agreements.

Previously, there were two different variants of Images © Alamy

the short-form agreement for letting bare land, that is, a fixed-term FBT for up to two years: one for use on dairy holdings, which contained extensive provisions concerning milk quota, and one for use on non-dairy holdings, which did not. Those two variants have now been combined into a single precedent for letting bare land for a term of up to two years. There is a separate precedent for letting land with buildings for a term of two years.

The suite of agreements still contains some very general references to “quotas”, however, in order to encompass remaining quota schemes such as beet quota, which will remain in place until next year, and any future “quotas” that may be introduced.

Basic Payment Scheme The rules and regulations concerning farm subsidies and environmental requirements are ever changing. The provisions in the suite of agreements that apply to subsidies and environmental regulations are therefore drafted in a relatively open and all-inclusive manner, with the aim of applying to all such schemes, even if they are

changed during the term of the agreement.

However, the replacement of the Single Payment Scheme (SPS) with the Basic Payment Scheme (BPS) and associated revisions to environmental legislation has led to the suite being updated in various respects.

References to SPS have been replaced with references to BPS, while references to specific environmental schemes have been updated, including references to the devolved Welsh Glastir – the principality’s sustainable land management scheme – and the relaunched Countryside Stewardship scheme.

The Rural Payments Agency has issued guidance regarding when land will be considered to be “at the disposal of the applicant” for the purposes of the BPS. To take account of this and the associated changes to the relevant environmental conditions, various amendments have been made to the agreements. In particular, alterations have been made to the former covenants to keep in good agricultural and environmental condition, and further limitations have been made to the licensee’s positive obligations in the grazing and cropping licences.

Dispute resolution clauses Dispute resolution clauses in tenancy agreements are topical – the Deregulation Act 2015 has widened the means by which disputes concerning tenancies governed by the 1986 act can be resolved, and the court system is placing ever-increasing emphasis on alternative dispute resolution.

The new suite of agreements has therefore been amended to include additional and revised forms of dispute resolution clauses.

Repairs and insurance The Agriculture (Model Clauses for Fixed Equipment) (England) Regulations 2015 introduced new model clauses concerning repairs and insurance under tenancies governed by the 1986 act, following a process of extensive consultation. The RICS suite of agreements has therefore been revised to include the option of incorporating the new model clauses in place of the existing, expressly drafted provisions concerning repairs and/or insurance.

User notes The supplemental user notes have been updated as well to take account of the aforementioned changes. b

Edward Peters is a barrister at Falcon Chambers peters@falcon-chambers.com

Subscribers can view the RICS FBT agreements 2016 including supplemental user notes on isurv at www.isurv.com/site/ scripts/documents. aspx?categoryID=104

Related competencies include Agriculture, Landlord and tenant

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17

RICS L A N D JO U RN A L

E N E R GY

Underbalanced drilling could provide a solution to international economic environmental and regulatory concerns over fracking, argue Richard Roddewig and James Hughes

T

An alternative to fracking?

he upsurge in US oil and gas production due to advances in horizontal drilling and hydraulic fracturing (“fracking”) technology has been watched carefully in many other parts of the world.

But governments have also taken note of the significant environmental concerns associated with the procedure.

There are three major issues: the amounts of water used, the potential for groundwater contamination from chemicals, and the earthquake potential from deep well injection disposal of fracking flowback water. As a result, many countries such as Bulgaria, France, Germany, Ireland, South Africa and the UK have imposed temporary moratoria, or in some cases permanent bans, on fracking while the environmental and economic issues are studied.

Fracking and overbalanced drilling As an oil or gas well is drilled, the drill bit passes through various formations and encounters water, oil and gas that have been compressed over past geological eras. To keep these pressurised fluids from escaping onto the surface as the well is drilled, and to separate the targeted oil and gas from groundwater, drillers circulate mud to create a hydrostatic weight that exceeds the pressures in the formations.

This method is referred to as “overbalanced drilling”. With over-pressurisation of the casing, and therefore the borehole, and use of cement to seal the space between the rock strata and the metal casing, pressure on the bottom of the well while drilling will always be higher than the pressure in the formation.

This serves primarily as a well-control mechanism to prevent dangerous blow-outs. The trade-off for controlling pressures in the hole with mud, however, is damage to the reservoir’s permeability which prevents oil and oil gas from being produced naturally without fracking.

Once the well is drilled horizontally into a shale formation and production casing and isolation packers have been installed, fracking begins. A mixture of sand, millions of gallons of water and/or other fluids, and chemicals are pumped at high pressure down the well and through holes – perforations – in the casing, created either by the use of perforated pipe or by setting off charges to blast holes in the horizontal pipe at regular intervals.

The pressurised mixture opens up naturally occurring cracks, and this fracturing releases oil and gas into the well bore. Then the pressure in the well is reduced and the fracking fluids are sent to the surface, allowing oil and/or natural gas to escape through the well bore to the surface, where it is collected and transported from the well site.

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Figure 1 shows a typical horizontal drilling and fracking operation in a poor-quality reservoir previously bypassed when drilling for conventional reservoirs, that is, formations with good pororisty and permeability.

Underbalanced horizontal drilling By contrast, underbalanced horizontal drilling (UBHD) does not need steel casing and cement to separate the resource formation from the borehole. Instead, as drilling proceeds in the horizontal section without circulating drilling mud, the resource enters the under-pressurised borehole and rises to the surface.

As a result, there is no need to install casing or blast perforations or insert isolation packers or sliding sleeves, nor any need to use a pressurised mixture of water, chemicals, acids and sand to fracture the shale formation and stimulate the flow of the resource into the borehole.

The naturally occurring micro-fractures in the shale allow gas and oil to escape into the open uncased borehole without artificial stimulation because the micro-fractures have not been plugged up with drilling mud. UBHD uses a mixture of mineral oil and nitrogen gas to keep the hydrostatic pressure of the drilling medium below the pressure in the formation being drilled.

The result is that fracking is no longer necessary to recover the resource, and the serious environmental concerns associated are eliminated. None of the chemicals involved in fracking are used, nor is sand necessary to prop open the micro-fractures.

The UBHD process protects the natural permeability of the micro-fractures in the shale. Mineral oil, which is non-toxic, biodegradable and recyclable, is used in place of drilling mud, and no water is used. In UBHD, 100% of the drilling fluid

Figure 1 Typical fracking operation

Hydraulic fracturing

Shale fractures

Image © Rachel Degenhardt/Enhesa

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is recovered, compared to only 30% of the fluids used in hydraulic fracturing.

Because UBHD does not use any water, it eliminates the need for deep-well injection of fracking wastewater, and since it does not use high pressure, it also minimises the risk of earthquakes as a result of drilling near faultlines.

UBHD also significantly reduces the cost of the recovery operation by eliminating all fracking-related costs. The typical costs to frack a 1,800-metre lateral well with 20 to 75 stages is between $3m (£2.1m) and $5m (£3.5m). If UBHD techniques are employed, the cost is between $300,000 (£212,000) and $500,000 (£354,000).

The elimination of the need for fracking saves significantly on the overall cost of the entire drilling and production process.

In the Eagle Ford formation in South Texas, wells drilled and completed using UBHD technology have cost between $3m and $4m (£2.1m–£2.8m) compared to costs of $6m–$8.5m (£4.2m–£6m) for wells in the same formation using overbalanced drilling plus fracking. Recent business plans for UBHD forecast typical cost savings of 40%, with even greater savings in future due to wider use and commercialisation.

So why has the oil and gas industry continued to embrace overbalanced drilling plus fracking as the preferred technology?

Tradition, training and vested interests.

In the early years of oil and gas exploration, blowouts were a significant safety risk. A spark could ignite an explosion or raging inferno. By the mid-1920s, rotary drilling techniques combined with a blowout preventer (BOP) began to control the pressure in the rock formations. Since then petroleum engineers have been trained primarily in overbalanced drilling techniques.

The industry, state regulators and insurance companies understand its risks, and have well defined standards of practice. By contrast, standards for underbalanced drilling are at an earlier stage of development and understanding. But in recent years, advances in technology combined with newly invented equipment have made underbalanced drilling as safe as overbalanced drilling.

However, change is risky and retraining costly. Although a few US producers, most notably Shell and some smaller operators, have begun to see the benefits of UBHD technology, it has been supported in just a few countries, such as Oman, and on a very limited basis in Colombia.

Image © Istock

At least seven steps are needed to get underbalanced drilling more widely recognised internationally.

1. Governmental overseers of the oil and gas industry must become more aware of alternatives to fracking for recovering resources from shale formations.

2. The UN must take note of UBHD as an environmentally friendly, cost-effective and productive alternative to fracking. At a minimum, UNEP should produce a paper on UBHD as part of its Emerging Technologies series.

3. The World Bank and other international multilateral development banks must promote and fund demonstration projects involving UBHD. 4. As more US companies switch from fracking to UBHD, their success stories must be widely distributed around the world.

5. Major international conservation and natural resource protection NGOs must promote UBHD as a viable solution to the environmental risks posed by fracking.

6. State-owned oil and gas entities in countries where oil and gas reserves are owned by the national government must test UBHD’s economic and environmental benefits.

7. Universities with oil and gas geology and technology programmes must take more of an interest in UBHD. b

Richard J. Roddewig FRICS is President of land use and real estate consulting firm Clarion Associates, Inc. rroddewig@clarionassociates.com W. James Hughes is a professional geologist with more than 30 years’ experience. He holds 18 US patents related to UBHD ubhd.jh@gmail.com

The authors would like to thank J. Andrew Stables, Research Analyst in the Chicago office of Clarion Associates, Inc. for the assistance he provided on this article.

Related competencies include Economic development, Legal and regulatory compliance

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Becoming streetwise Yolande Barnes explains how a “complete streets” approach to housing estates could help tackle London’s growing housing demand

I

n the mid-1980s, though it went unnoticed at the time, the slow and steady long-term decline in the number of London Underground passengers ended.

All the planning hitherto had been for a dwindling service, with managers cutting investment, staff and train numbers. By the late 1980s, traveller numbers were growing again – and growing fast. Tube journeys, totalling 1.2 billion a year, are now more than double the level they were in 1980.

London Underground wasn’t the only organisation to be taken by surprise. The renaissance of the City with the return of wealth-generators was anticipated by neither London’s politicians nor the real estate sector. Whether it was admitted or not, planning of the inner city in the postwar years had been about managing population decline and, although new housebuilding reached a postwar high in the 1960s and 1970s, demolitions had been at an even higher level.

In 1984, London’s population density was 23% lower than it had been in 1939.

Inner London’s population was half its former peak, and it is still 30% lower – not so much for lack of housing demand as lack of supply. London’s population expansion of nearly two million since the mid-1980s has not seen a corresponding rise in new houses and flats: that tanker is taking much longer to turn around.

London challenge The well-rehearsed challenge for London is to build sufficient housing of the right type, in the right place at an affordable price or rent for all residents, not only those able to compete at the top of the market; estate agency Savills estimates 2 0 J U N E / J U LY 2 0 1 6

as many as 65,000 units per year are required. But providing additional housing in London to meet the needs of a growing population means that land has to be found to build on, and it appears to be all used up.

In common with every other established global city, London has seen the vast proportion of its viable land already built out. This presents a potentially huge political problem because a lot of that land already contains people’s homes, and even the supply of workspace seems threatened.

The land that is more straightforward to develop, such as derelict industrial sites with good public transport connections, was built on long ago. It could be argued that much of what was built in the prosperous period of the 1990s and 2000s was constructed at inappropriately low densities.

The search is now on for sites to create new neighbourhoods and new opportunities to build many more homes. This means both the re-use of land and intensified land use have to be considered if more housing of any tenure and any price point is to be built.

There is good news and bad news.

The good news is that, in theory, if all neighbourhoods in London with good public transport connections were built just to average housing density, compared to other similar neighbourhoods, there is space for another 1.46 million new homes, according to London First and Savills Research’s Redefining Density. The bad news is that this land is already occupied by people and businesses and valuable amenity space. People who already have homes – of all types, in all locations – will have to budge up a bit if we’re to fit everyone in.

It has become clear that, in the past, some of London’s land has not been built

out to its full potential. That is not only in terms of density but also the quality of built environment we have created. These sites include (but are not limited to): b retail warehouses in central and well-connected areas b industrial sheds in central and well-connected areas b suburban housing that is near to transport nodes b railway lands b local-authority and former local-authority housing estates.

Completing London’s streets Savills’ recent paper Completing London’s Streets and subsequent research has found that it would be possible to add new housing to some local-authority and former local-authority housing estates while retaining existing homes and/or commercial space as well as enhancing the sense of place. In other cases, the configuration and layout of previous development means that a certain amount of demolition is necessary, but this must be done with great sensitivity, recognising that it will affect people’s homes and communities. This must be just as much – if not more – about improving the places where people live as well as adding homes.

Savills thinks that it is very important for landowners and the built environment

RI CS LAND JO UR NAL

k l PRP’s masterplan for the Oval Quarter in south London would involve the complete regeneration of the area by creating an urban village with community facilities including a function hall, café and crèche

sector to understand the implications of this research not as advocating the wholesale demolition of local-authority housing estates but a “complete streets” approach to any housing development because this appears to provide better outcomes for landowners, landlords and residents than many current developments. What this means is outlined below.

Better homes Savills has worked on the principal that new housing for London does not always have to involve demolition of existing homes but, when it does, every Images © PRP

existing householder of any tenure should be provided with an equivalent or better home in the same but improved neighbourhood, which contains more housing for everyone. Where new homes are provided on non-residential sites, the research assumes that 35% of these will be social housing.

In order to test a complex hypothesis, the infill and repair of streetscapes on housing estates was not considered in the Completing London’s Streets study, although Savills has since carried out such research, which is due to be published soon. Instead, the research looked at the following questions.

1. What type of development might be best if the wholesale redevelopment of an entire local-authority housing estate was being considered?

2. Would it be the contemporary approach of replacing old blocks of flats with new mid- and high-rise ones at higher density in a very similar configuration (an approach Savills termed “block renewal”)?

3. Or would it be better to create a street pattern that reconnects isolated estates with the surrounding streetscape, containing mid-rise, high-density terraced houses and modern mid-rise mansion block-style housing, and even the occasional tower, on streets (an approach Savills termed “complete streets”)?

4. How many additional homes might be provided (of any tenure) in each case?

5. How would this be scaled up if applied to all housing estates that could potentially be redeveloped?

The research looked at a selection of representative housing estates across London to discover: b the existing housing numbers b how well connected and permeable these estates are b how well connected and permeable they could be made b how many more homes could be J U N E / J U LY 2 0 1 6

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provided on the same land by “block renewal" and “complete street” scenarios b how much more workspace could be provided under each scenario b how much the two scenarios would cost to build b which of the two scenarios would residents and landlords value more highly, including social housing.

The findings were very clear (see Table 1). If existing housing estates were to be rebuilt, significantly more homes would be supplied under either scenario; the density per hectare was very slightly higher for complete streets, however, than block renewal.

However, the complete streets homes would cost significantly less to build per hectare of land. And they would be more highly valued by residents, providing a higher end asset value for the local authority or social housing landlord as well as owner-occupiers.

This is important for local authorities and housing associations because it would enable them to provide more homes.

As the complete streets approach should prove more viable and therefore easier to fund than contemporary block renewal development, more social and affordable housing should be provided on such a site, given the appropriate financial structures.

There would also be more retail and work space, potentially offering greater life chances to residents, especially if managed and let at affordable commercial rents.

If Savills’ estimates are correct, there could be capacity on around one in five London estates to increase the number of homes from 136,000 to 236,000.

The study does not specify whether these homes would be social, affordable, intermediate or open market, rented or owner-occupied, as the viability of each tenure type and particular numbers will differ from site to site.

So, the question regarding the complete streets approach has changed from whether it is better or more valuable to “Why on earth isn’t it always done?”

2 2 J U N E / J U LY 2 0 1 6

pk Regeneration of Oval Quarter will provide 808 new homes and 172 refurbished properties

Table 1 Comparative results under alternative scenarios Location-weighted average

Existing estate

Contemporary regeneration

Complete Streets

Number of units per hectare

78

130

135

Total end value per hectare

£11.5m

£40.0m

£48.1m

Build cost per hectare

–

£21.8m

£19.9m

Commercial space (sq. ft) per hectare

8,831

8,831

10,014

Sexy architecture Why would the UK real estate sector keep constructing a form that is more expensive to build, probably more expensive to run, may depreciate faster and that will certainly have a lower end asset value than much of London’s most popular, existing street fabric? Surely it can’t just be because it’s sexy in architectural circles? After all, our model is not predicated on architectural style – pastiche or otherwise – but simply form and geography.

It is a form and geography that has proved to be extremely durable and flexible, serving not only London for centuries past but many other cities across the globe too. The quality of city streets has never been more important than in the digital age: witness how Shoreditch has been the cradle of London’s tech revolution, rather than Canary Wharf.

Tech cities are street cities, not out-of-town campuses. Even Silicon Valley is struggling to keep talent from being attracted by the bright lights of San Francisco.

So how long can London thrive if it hangs on to late-20th-century notions of single-use, stand-alone buildings in a Images © PRP

landscape, rather than flexible, durable building blocks in a streetscape? How long will buildings purpose-built for the 20th century survive in the digital age as the pace of change accelerates even faster? How relevant is the high-rise versus mid-rise debate if neither face proper streets and are only served by inhospitable service roads?

Savills’ report is about much more than housing estates and housing numbers: it is part of a much bigger and wider range of work that is vital for the future not just of London’s environment, its economy and its people, but those of many other cities too. C Yolande Barnes is Head of Savills World Research YBarnes@savills.com

Completing London’s Streets is available from http://bit.ly/1RJmO26

Related competencies include Planning; Housing strategy and provision

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