17/06/2014
Headlines
17/06/2014
Land Reform Review Group publishes its recommendations The Scottish Government-commissioned Land Reform Review Group has published its report, which contains 62 recommendations. Its remit was to: •
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enable more people in rural and urban Scotland to have a stake in the ownership, governance, management and use of land, which will lead to a greater diversity of land ownership, and ownership types, in Scotland; assist with the acquisition and management of land (and also land assets) by communities, to make stronger, more resilient, and independent communities which have an even greater stake in their development; and generate, support, promote, and deliver new relationships between land, people, economy and environment in Scotland.
It has said that: 1. Significant changes are required to make land ownership a more efficient and effective system for delivering the public interest. 2. It recommends that the Scottish Government should have an integrated programme of land reform measures to do this. 3. A single body with responsibility for understanding and monitoring land ownership and management is established. 4. It also recommends that the Scottish Government should establish a Scottish Land and Property Commission. 5. There is an upper limit on the amount of land held by private owners in Scotland. 6. A large increase in community land ownership and establishment of a Community Land Agency. 7. Devolution of the Crown Estate Commissioners’ statutory responsibilities to the Scottish Parliament. 8. Changing the current tax system, which is considered to maintain the pattern of large-scale private land ownership. The changes would aim to increase the number of land owners. The government will give ‘serious consideration’ to the option of Land Value Taxation. 9. That agriculture, forestry and land-based businesses should pay non-domestic rates like other businesses. The Scottish Government has backed the recommendation for a working group to develop a strategy to achieve a target of getting 1m acres of land into community ownership by 2020. Following this, the Scottish Government has announced that it is set to bring forward a Land Reform Bill for Scotland, which will build on measures in the forthcoming Community Empowerment (Scotland) Bill.
CAP post-2014: further detail published on English and Scottish implementation A lot more detail has been published, especially by the Scottish Government, on how the new Pillar 1 and Pillar 2 rules will be applied in Scotland and England. Our CAP update and Greening calculator have been updated with the changes. Environmental bodies are challenging the changes to Ecological Focus Areas (EFAs) as they claim that they are not based on any scientific or environmental assessment but driven by purely political factors.
Farming Europe to agree plan for reforming GM approval process EU Environment Ministers have approved plans to reform the GM approval process after years of deadlock. The new process will allow pro-GM countries to approve cultivation and anti-GM countries to apply legally-valid bans. The deadlock has been broken as some countries, including the UK, have been convinced that the new process will stand up to legal challenge. Unsurprisingly, given the nature of this Marmite-like subject, both biotech firms and environmentalists are not happy; the biotechs fear the opt outs could undermine sciencebased decision-making while environmental groups fear future legal challenges and a transfer of ‘unprecedented powers’ to the biotechs as the plans do not allow countries to ban crops on environmental and health concerns not already assessed by EFSA.
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17/06/2014
An agricultural earthquake - has the agricultural balance of power shifted from pro-farmer in Europe? There was as big an earthquake in mainland Europe as there was in the UK due to the results of the European elections. Parties at the left, right and green edges of the political spectrum did well and they have shifted the balance of power in the European Parliament. Both of the two biggest political groups, the right leaning EPP and the left leaning S&D, both lost seats and now only have a small majority of 54% as a coalition. Europewatchers expect a new political grouping to form, which would need at least 26 MEPs from seven or more countries, which would hold the balance of power and could swing the Parliament from its long-time pro-farmer and pro-CAP stance to something more sceptical. The CAP reform just agreed may be the last of its type. It will take a few weeks for the new groupings to be agreed and then, over the next two months, who will sit on the committees.
Property Issues Planning reform in England: local development orders The Government has announced a series of proposals to encourage more housing development on previously developed land. This includes having planning permissions for houses in place on more than 90% of suitable brownfield land by 2020; it will use local development orders, which are a flexible way to grant planning permission, and designate new housing zones.
Fracking: DECC consultation and British Geological Survey report on shale gas resources The Department of Energy and Climate Change is consulting on proposals to simplify the existing procedure for shale gas and deep geothermal underground drilling access. It views the current procedure as a barrier to extraction. It would like views on the main proposals, which would apply to England, Wales and Scotland. • • •
To introduce a right of access for shale gas and deep geothermal operations below 300m A payment to communities of £20,000 per lateral well, administered through the voluntary scheme proposed by industry A notification system to alert local people. DECC says that landowners and other members of the community will still be protected by the planning and regulatory system.
Please note deep geothermal energy however will be the subject of separate consultation in Scotland and Wales. DECC has also published a report by the British Geological Survey which gives the most detailed estimates yet of British shale gas resources.
Flood Re: non-domestic premises excluded and so don’t get reduced insurance premiums The Water Act has been passed and, despite lobbying from the property industry, non-domestic premises, leasehold property, rented houses and farm outbuildings are excluded from the Flood Reinsurance Scheme, and so will not benefit from subsidised (lower) insurance premiums like residential properties in high flood risk areas. Smiths Gore comment: This will adversely affect businesses and the logic for distinguishing between houses and businesses is unclear but is probably political. Council Tax band H houses, so the most expensive ones, are now included in FloodRe, which is good news.
Residential Markets A big week of announcements on boosting housing supply and controlling housing demand: • The Bank of England has been given political power to carry out sensitive operations in the housing market, including new powers to set mortgage lending rules to keep ‘future risks in the housing market’ at bay. This means that the Bank, mainly through its Financial Policy Committee, now has considerable powers to affect the housing market: limits on loan-to-value ratios; limits on loan-toincome ratios; affordability tests for borrowers; limiting the amount of risky loans a lender can make; and, imposing bigger capital requirements on lenders. • The Council of Mortgage Lenders has warned that any ‘crude caps’ will freeze the housing market. • Mark Carney, Governor of the Bank of England, said interest rates could rise ‘sooner than markets currently expect’, signalling a possible increase before the end of the year. He thinks that recent falls in the number of houses for sale are due to prospective sellers holding back properties in anticipation of higher future prices. 2
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The Deputy Governor of the Bank of England, Charlie Bean, has predicted that interest rates will rise to 3% in the next three to five years. Don’t forget that this does not mean that mortgage rates will automatically rise as there is a difference between them and the BoE base rate. The above tackles the demand side of housing but action is needed on the supply side too – on the number of houses. The Government is spending up to £500m to help with decontamination of brownfield sites to encourage their development. There will also be fast-tracking of planning permission for homes on brownfield sites and councils will be forced to release previously developed sites for building. House prices have ‘gone off the boil’ with prices static in England and Wales in June and actually fell 0.5% in London (Rightmove). Falls in new houses for sale have been attributed, by the Bank of England, to would-be sellers holding back properties from the market in anticipation of higher future prices. The fall in the number of transactions (April saw valuations activity drop by 15% compared with March, according to Connells) appears partially caused by the introduction of the new Mortgage Market Review rules which increase checks on borrowers, which affected the market before they came into force on 26th April. Smiths Gore comment: the Mortgage Market Review will support the fundamental affordability of housing over the long-term, which is positive, and any teething problems are almost completely temporary. Lloyds Banking Group and the Royal Bank of Scotland have both cut the amount of their lending in London amid concerns that there is a housing bubble. The Government has ruled out any change of the £600,000 maximum value cap in the Help to Buy schemes - for the time being. Recent figures support the Government’s position of defending Help to Buy 2. It was only used by 7,313 households in its first six months, which is 1.3% of mortgages, and 80% of households were first-time buyers purchasing cheap properties. In total, HTB 1 and 2 have been used by around 28,000 households.
And finally… London's trail of buried diggers There could be up to 1,000 JCBs buried underground because they are cheaper to bury than lift to street level following basement extensions. Whilst every effort has been made to ensure the accuracy of this briefing, its information may not be comprehensive and recipients should not act upon it without seeking full professional advice. If you have queries regarding any of the articles, please contact jason.beedell@smithsgore.co.uk (01733 866562) or andrew.teanby@smithsgore.co.uk (01522 507310)
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