page 1
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Welcome Simon Knight, Senior Partner page 04
PV Installations on the Crown Estate Sustainability, Renewables & Energy page 20
Rural Economy 1952-2012 Estate Management page 06
A place called home Guest Article, Peter McKendrick, Former President of the RICS page 21
Telecoms Update Telecoms page 31
Looking Back, Moving Forward Guest Article, Paul Clarke, Duchy of Lancaster page 08
Real signs of an improving market Residential Property Agency page 24
Out of Sight, Out of Mind Minerals & Waste page 32
Water for Life, or will we be thirsty? Estate Management page 10
A raft of legislation Property and Lettings Management page 25
Gearing up to future challenges Duncan Sinclair, Guest Article, Agriculture Manager, Waitrose page 34
National Planning Policy Framework, England Planning & Development page 12
English Farmland Market Update Farm Agency page 26
CAP Reform Farm Management page 36
A Renaissance in Rural Planning Planning & Development page 14
Equestrian Market Update Equestrian Services page 28
Welsh Reorganisation into a Single Environment Body Forestry Management page 38
The Greats in Britain page 16
Agricultural Rents Farm Management page 28
Shoot Benchmarking Sporting Services page 40
Is your building at risk from subsidence? Architecture & Building Surveying page 18
Forestry Market Update Forestry Agency page 29
News in Brief page 42
Ensure to insure Architecture & Building Surveying page 19
Rural Property Investment Market Investment page 30
Contacts & Services page 43
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Contents
1952-2012
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Smiths Gore would like to congratulate Her Majesty The Queen on Her Diamond Jubilee.
Welcome A warm welcome to our Summer 2012 edition of the newsletter in this a very special year for our Nation. The Diamond Jubilee is an important celebration of Her Majesty’s service as our Monarch over the last sixty years and we thank her for her dignified commitment to leading our Nation and the wider Commonwealth. We know she and her family are passionate and supportive of the British countryside and the rural economy. Rupert Clark, Head of our Management Division, offers a perspective on the changes that have affected the rural economy and how this has affected estates and farms over the last sixty years. As a firm, we try to ensure that the importance of the rural economy is recognised along with its valuable social impact on the wider community. Our guest article, kindly written by Paul Clarke, Chief Executive and Clerk of the Council of the Duchy of Lancaster, provides a fascinating insight into the history of the Duchy of Lancaster and its diverse property interests and other activities. In recognition of the celebratory theme which seems to be engulfing Great Britain over the Diamond Jubilee and with London hosting the Olympic Games, last held in this country shortly before the start of The Queen’s reign, we are showcasing a sample of ‘The Greats’ in Britain, which you can find on pages 10 and 11. There is no better place to be this summer than here in the UK and we hope you will find our selection of ‘Greats’ of inspiration when planning your summer. As we begin to see the start of more clement weather, the much needed rainfall through March and April has been miserable for everyone except farmers, growers and foresters. However, our groundwater levels remain perilously low after two years of dry weather and with hosepipe bans still in place in some areas we have detailed some of the pitfalls of extreme dry and wet weather conditions on pages 16 and 17. We therefore look forward to a summer of celebration and sporting excellence and please do not hesitate to contact any one of us if you would like to discuss any of the issues within this newsletter.
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Simon Knight Senior Partner
1952 Farm rents £1.70/ac
1954 Landlord and Tenant Act
Rural Economy 1952 – 2012 How estate management and agriculture have changed during the reign of Her Majesty The Queen
What extraordinary evolution we have seen during the 60 years in just about every aspect of the rural economy. Much of it of course has been driven by a myriad of changes in technology, business practice and within legislation and regulation, but there has also been significant change in the ownership and occupation of land and in the attitudes of owners and farmers. In the era of the Fordson Major, wheat yields averaged 1.4 t/acre (now 3.0 t/ acre) and milk yields averaged 2,400 litres per cow (now 7,400 litres per cow). Threshing machines and milking cows in their stalls in a Cowhouse were still the order of the day with investment in the combine harvester and the herringbone parlour first seen in the early 1960s. Some parts of rural England had yet to have a mains electricity connection and modern grain drying and storage was just beginning to be introduced. Timber was still hauled from commercial forestry by heavy horses and estate cottages remained very largely occupied by the estate workforce. In 1952 farm rents were around £1 14s 0d per acre, so £1.70 or £40 at today’s values. In 2012, an average rent is about £80 per acre. A typical estate in 1952 relied on farm rents representing approximately 90% of total turnover, but in 2012 the same estate would earn over half of its income from houses, commercial property, leisure and other diversified income streams. Availability of capital in 1952 was tight as the country emerged from the ravages of World War II. For instance the cost of maintaining the principal house presented major challenges resulting in whole wings being demolished and accommodation being reduced to make it more affordable. In some instances houses were completely flattened.
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Estate cottages on the whole yielded no or very little income and many in remote locations were pulled down when they became vacant and proved uneconomic to repair. It was only in the 1960s that extensions began to be developed providing a bathroom and WC, so consigning the outdoor
Privy to becoming a garden shed. Changes in the law in the past 20 years have resulted in greater freedom of contract across all areas of property. However, the Agricultural Holdings Act 1948 (as amended) still controls many farm tenancies, and the Rent Act 1977 which was retrospective and introduced tough controls on the tenure of cottages, remains in force for those tenancies created before January 1989. The Landlord and Tenant Act 1954 still controls all commercial leases and whilst there has been much case law, it has largely survived the test of time. The Town & Country Planning Act 1947 had taken hold and introduced a co-ordinated approach to development controls for the first time. The Treaty of Rome, the birth of what is now the European Union, took effect at the beginning of 1958 not long after the coronation of The Queen. Whilst it took the UK 14 years to join, its subsequent effect on owners and farmers has been all pervading. From a time when there was little or no regulation, we are now challenged by ‘red tape’, controlled in part by Brussels and while politicians of all shades make promises to reduce the burden sadly there has been little respite to date. Technological advances have been all pervasive in every area of life. On the rural estate the resulting efficiencies have seen a dramatic reduction in the workforce out in the fields and woodlands with machinery taking over. Gone are the sounds of a secretary hammering at a manual typewriter in the Estate Office and accounts clerks keeping manual records - both now generally have access to excellent IT systems. The cable operated telephone system replaced by the Smart Phone. Email has replaced the letter, with the fax having briefly intervened. The estate website has greatly enhanced the ability to market estate products and diversified businesses as well as helping to develop an estate brand. The speed of operation and the expectations of those owning and managing estates and farm businesses have changed beyond recognition, with the result that fewer people are employed with considerably greater efficiency. The exception to this is the growth of
1972 UK joins EU
1977 Rent Act
numbers employed in leisure related rural enterprises. Increased amounts of spare time and cheap travel has led to growth in tourism and introduced new opportunities for generating income which has been particularly welcome for historic house owners. Many have followed the lead of Blenheim and others in opening to the public over this period and some have developed very substantial businesses as a consequence resulting in helping to fund the preservation of some of this country’s most important built heritage. One challenging consequence of change and a direct result of the much reduced number of people working the land, is the decline of the local community. This has meant that those owners who view the community as being a central part to the welfare of their estate, have had to work much harder and in some cases invest in new facilities in order to sustain their community and continue to enrich the locality as a consequence. This remains a significant challenge for the future. Ownership of land has changed during the past 60 years initially due to the intervention of punitive post war rates of Estate Duty. Subsequent Inheritance Tax reliefs have made land attractive to cash rich individuals seeking a tax efficient means of passing their wealth to the next generation. Farmland became viewed as an investment and a vibrant market for let land in the 1970s and 1980s was fuelled by pension funds and others seeking to invest, resulting in new types of owner. Demand for land has accelerated since the start of The Queen’s reign but as always has been underpinned by farmers despite increasing new money being invested into the rural economy. Meanwhile in recent years, estates have turned from just being viewed as ‘home’ to being managed as a business. This approach combined with the relatively benign tax regime and the development of important new income streams, has helped secure many rural estates for the future. In turn this has lead to the protection of some of the countries most important heritage. However, having said this, the current economic climate has brought with it
1989 Housing Act
1995 Agricultural Tenancies Act
2012 Farm rents £80/ac
new threats and challenges to the welfare of the rural estate and our country’s heritage, both built and landscape. Our own business has grown and adapted over the last 60 years in response to the wider changes in the rural economy. In 1952, the firm had five partners practising out of seven offices in England. We were principally engaged in the management of the estates of the Church Commissioners for England and a number of notable private clients. Now with 86 partners and 400 staff in 29 offices, our client base has expanded geographically throughout the UK and overseas. Whilst we continue to manage for the Church Commissioners, we also now manage the land and property interests for a diverse range of private individuals, for institutional and charity owners, including The Crown Estate and Duchy of Lancaster, and for various Government Agencies and Local Authorities within the public sector. We have diversified our skills base to enable us to meet the evolving expections of our clients and we have many specialists who provide expertise in architecture, planning & development, farm management, forestry, renewable energy, minerals and telecoms. Innovative approaches to the management of estates and farming businesses have been essential during the Queen’s reign in order to keep pace with the wide ranging and rapid changes in the rural economy. We are proud of our record of leading the way by providing the skills, entrepreneurship and commitment to the diverse range of owners and owner/occupiers for whom we act.
Rupert Clark Head of the Management Division 01798 345999 rupert.clark@smithsgore.co.uk
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1958 Treaty of Rome
Looking Back, Moving Forward It is widely known that Her Majesty The Queen will be celebrating Her Diamond Jubilee this year. However, many will be unaware that Her Majesty is also The Duke of Lancaster, a title which stems from an Ancient Inheritance spanning some 700 years. I was appointed as the Chief Executive and Clerk of the Council of the Duchy of Lancaster in 2000 and continue to be fascinated by the depth of our history and the diversity of our roles and historical obligations. Not many can say that their job title stems from the 15th Century, although the work of the Clerk of the Council has changed dramatically over time. In 1438 the role was described as “providing parchment, paper and wax for rolls, memoranda and other evidences” – somewhat removed from my role in the commercial world in which we work today! Our origins date back to 1265 following Henry III’s success in quelling the uprising of the Barons’ War. Henry confiscated lands from the Earls of Leicester and Derby and gave these to his son, Edmund, who was then created the first Earl of Lancaster. The Inheritance gradually grew and in 1351, with the creation of the County Palatine of Lancaster, the Earldom was raised to a Dukedom. In 1399 the Inheritance was linked with the Crown for the first time and Henry IV’s first act was to secure the Duchy as a separate entity to be passed on to his male heirs in perpetuity. This continues to this day although the Inheritance may now be passed to Kings and Queens alike. (For those wishing to learn more, our extensive history is available on our website www.duchyoflancaster.co.uk).
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Her Majesty Queen Elizabeth II became the 29th Duke of Lancaster when She ascended to the throne in 1952. Each Monarch approves the design of their Duchy Seals and those with an eagle eye will see that Her Majesty chose to add a corgi beneath the traditional prancing horse on Her County Palatine Seal. The Queen has received only the income from the Lancaster Inheritance for the last 60 years,
while the capital assets and gains are retained by the Duchy for the benefit of future Sovereigns. In 1952 the Duchy paid £110,000 (£1.9m in today’s money) to The Keeper of the Privy Purse in comparison to £13.3m paid in 2011. Many of the estates within our property portfolio stem from ancient times, including Higham Ferrers, Needwood, Pickering, Goathland, Scalby, Myerscough and the Manor of the Savoy in London. We are not the owners of The Savoy Hotel, which is a common misconception! We hold a diverse portfolio totalling some 45,000 acres comprising 270 residential properties, 100 commercial properties, 75 farms, 8 mines/quarries, 3 public houses, 2 golf courses and a Chapel, which is the spiritual home of The Royal Victorian Order. Many of the 8 Duchy castles, also within the portfolio, lit a beacon in June to mark Her Majesty’s Diamond Jubilee. The Duchy aspires to be the “landlord of choice” within the areas in which we have land holdings, working with our tenants to try to assist them in making their businesses as productive and viable as possible for the long term. We encourage diversification of farming activities making capital contributions where it is felt to be appropriate. Smiths Gore has managed our Crewe and South, Lancashire and Yorkshire Surveys for the last ten years and we work closely with the team and respect their continued advice and enthusiastic support. The Duchy, by its very nature, has a long term vision and this includes the rebalancing of some portfolios and reinvestment into alternative, better quality land and buildings. Over the last twelve months we have sold the majority of our holdings on the Winmarleigh Estate in Lancashire and our tenant farmers have been delighted to be given the opportunity of purchasing their farms. £14.3m of assets were sold in 2011/2012 with £14.6m reinvested into new prime assets. These purchases include Willow Walk, which adjoins our Tower Bridge Business Park in London, and also over 1,000 acres of Grade I and II land in Lincolnshire.
The Duchy has a number of development opportunities it is pursuing, notably at Crewe and Higham Ferrers, but it must be said that seeking planning consent is becoming an increasingly expensive and complex task. One of our biggest challenges at the present time is to decide the future of Lancaster Castle which officially returned to the Duchy in January this year, following many years as a working prison. We are engaging with local stakeholders to produce a strategy for the Castle that will be sustainable and provide greater access to the community. This year is particularly significant for the Castle as it marks the 400th Anniversary of the Pendle Witches when twelve people were tried at the Castle and sentenced to death having been found guilty of witchcraft. The dungeon in which they were held is largely unchanged and a subject of great interest. The Duchy has two charities benefiting local causes and recently created The Duke of Lancaster Housing Trust to provide affordable homes for the rural community. Our first project at Dunsop Bridge is nearing completion and we will be welcoming our new tenants into their homes in the summer. We have been fortunate to secure the services of Ribble Valley Homes who will manage these twelve properties on our behalf. The Trust has a number of additional sites already identified for the future. The Duchy is a thriving landed estate orchestrated from Lancaster Place by a team of fifteen professional and dedicated staff. The loyalty of this team, together with that of our external managing agents will, hopefully, continue to safeguard the Duchy Inheritance for the benefit of future generations of British Sovereigns. Paul R. Clarke, CVO
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Chief Executive and Clerk of the Council of the Duchy of Lancaster
Water for life Making sure there is enough water for everyone will be “one of the major challenges this country will have to deal with in the coming years ahead” Environment Minister, Richard Benyon
The way water is managed in England and Wales is going to change. It will have to as there is a growing realisation that if demand continues to increase and climate change happens as expected, we won’t have enough of it where it is needed. I have even heard it said that one of the drivers for the new Single Environmental Body in Wales is so the Welsh regain control of their water and can sell it to the drought-ridden but wealthy South East of England. The Government will publish a Water Bill later this parliamentary session, which we expect will be largely based on its white paper, Water for Life.
Background to Water For Life and the Water Bill Water courses have been polluted and too much water has been taken from them. Just over a quarter of rivers and lakes are considered ‘fully functioning ecosystems’ – and the UK has a European commitment to substantially improve this by 2027. Climate change is going to make water scarcer. Reducing demand for water is essential. Agriculture holds 62% of the 21, 500 abstraction licences in England and Wales, half of which are time limited, a much higher proportion than other sectors – does this put the sector at risk? Demand for water abstraction will increase – by as much as 35% by 2050, according to the Environment Agency.
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The current abstraction licensing system does not reflect the environmental cost of abstraction and does not respond to changes in water availability.
...or will we be thirsty?
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To reform the water abstraction regime to reduce over-abstraction of rivers
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Remove barriers to the greater trading of abstraction licences and bulk supplies of water to make the supply system more flexible
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Reduce the historical unfairness of high bills in the South West
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Introduce a package of reforms to extend competition in the water sector
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Increase awareness and action on water efficiency
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To continue with the catchment approach to dealing with water quality and the environment
The proposals have been broadly welcomed. Most water companies want to see a review of the current abstraction licensing regime and welcome the greater commercial freedom for them to trade in water. Consumer groups have also been positive – happy that water quality should be improved and that metering will not be made compulsory; however they remain greatly concerned about the medium-term affordability of water. I would argue that metering and affordability are related. The Adaptation Sub-Committee of the Committee on Climate Change found, in South East England, that if a household is metered, the financial savings through lower water bills outweigh any additional costs associated with fitting water efficient measures. There are reasons for farmers and landowners to be worried in relation to abstraction licenses. The fact that half of agricultural licenses are time limited does put them at greater risk of not being renewed, especially if they are considered ‘environmentally damaging’. Further, farming may struggle to compete financially with water companies for the increasingly scarce and demanded water. The Country Land and Business Association has sensibly called for a fair allocation of water for land-based businesses. The best thing that the sector can do is to prove that it uses water efficiently, otherwise valuable irrigated land worth £10,000 an acre may become worth £3,000 without water, and to strategically plan how to capture water during wet periods; it could become a tradable commodity.
Dr Jason Beedell Head of Research 01733 866562 jason.beedell@smithsgore.co.uk
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One of the major issues the Bill needs to address is how can water be used more efficiently while keeping it affordable for everyone and protecting the environment. A big question and one the White Paper at least partially addresses. Key proposals are:
NATIONAL PLANNING POLICY FRAMEWORK: ENGLAND
Government concessions look like they balance environmental protection and economic development. Now, let’s see how it works in practice... The new NPPF runs to about 50 pages replacing over 1,300 of guidance in 44 separate documents. That change must be welcome and it is understood that the Government has accepted 30 out of 35 Select Committee recommendations on the draft NPPF. It sets out what the Government expects from the planning system. We have noted four key messages:•
There is an emphasis on being positive: positive planning, positive growth, positive approach to sustainable development
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The development plan is the cornerstone of the new planning regime and Councils need to make progress with these
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Landowners need to identify when a plan is silent or has out-of-date policies because it is in those cases where the new presumption generally allows development to go ahead
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Some interesting transitional arrangements. Until March 2013, post 2004 policies may be given weight by Councils; after then, weight will depend on consistency with NPPF. Pre 2004 policies are assumed to carry no weight.
RURAL OPPORTUNITIES & WHAT THE NPPF SAYS:
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IDENTIFY OPPORTUNITIES FOR NEW COMMERCIAL DEVELOPMENT
BE EXPLICIT ABOUT YOUR CONTRIBUTION TO THE RURAL ECONOMY, E.G. THROUGH A STRATEGIC PLAN
IDENTIFY DIVERSIFICATION OPPORTUNITIES
“Promote the development and diversification of agricultural and other land based rural businesses” (para.28)
“This sequential approach should not be applied to applications for small scale rural offices or other small scale rural development” (para. 25)
“Support the sustainable growth and expansion of all types of business and enterprise in rural areas, both through the conversion of existing buildings and well designed new buildings” (para.28)
In a fairly key concession to critics, the default ‘yes’ to development proposals has been dropped. The Government has tried to achieve a fine balance with this document – it has tried to calm fears that the new regime will see the countryside fragmented by development to assuage the National Trust, Daily Telegraph and others while at the same time supporting its growth agenda by being able to say that it is ‘unashamedly pro-growth’. However, shorter does not necessarily mean clearer. It is a broad document that can be interpreted in many ways. What landowners and developers want and need is certainty. The general policy that it sets out will be fleshed out in the coming years by cases and appeals (and we note the Inspectorate has embarked on a recruitment drive). It is also the case that much further guidance is likely to come forward (although not necessarily from Government) and so it may turn out not to be the great simplification being proclaimed. There is a more detailed analysis of the NPPF available on our website at www.smithsgore.co.uk/news Ian Smith Head of Planning 01733 559320 ian.smith@smithsgore.co.uk
IDENTIFY NEW RESIDENTIAL OPPORTUNITIES “Local planning authorities should avoid new isolated homes in the countryside unless there are special circumstances such as: • The essential need for a rural worker to live permanently at or near their place of work in the countryside; • Where such development would represent the optimal viable use of a heritage asset or would be appropriate enabling development to secure the future of heritage assets; • Where development would re-use redundant or disused buildings and lead to an enhancement to the immediate setting; • The exceptional quality or innovative nature of the design of the dwelling” (para.55)
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IDENTIFY RURAL CLUSTERS
SUPPORT LOCAL SERVICES
“To promote sustainable development in rural areas, housing should be located where it will enhance or maintain the vitality of rural communities. For example, where there are groups of small settlements, development in one village may support services in a village nearby” (para. 55)
“Promote the retention and development of local services and community facilities in villages, such as local shops, meeting places, sports venues, cultural buildings, public houses and places of worship” (para.28)
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A RENAISSANCE IN RURAL PLANNING?
What new opportunities will the Localism Act and the National Planning Policy Framework offer to rural England... Over the past 20 years, driven by central Government planning policies, Local Planning Authorities (LPAs) have adopted an exclusively urban-centric approach to development and growth. The simplistic mantra that, ‘development is good in towns and cities, and bad in villages and rural areas’, sums up this approach. Such a wide approach has meant that local landowners, village communities and local councillors have been frustrated at their inability to properly deliver the development needed. It appears that the planning reforms now in place offer a real opportunity to redress the balance and to encourage rural communities to plan for their future. There are many villages throughout the country where there is real interest in promoting appropriate, small scale development to bolster the local community and bring new life to places that have stagnated over recent years. The prospect of a few new homes (‘open market’ and ‘affordable’), bringing with them perhaps improvements to the village hall or land for allotments or better play space, will strike a chord with many parish councils and village communities. It’s not just about new houses and employment units, but it is also about bringing new people to a village and thereby increasing the ‘social capital’ – supporting local clubs and societies, local businesses, play groups and the village school.
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The Localism Act with its provisions for ‘neighbourhood planning’, encouraging parishes to plan positively for their futures, has raised the real possibility for local landowners and rural businesses to work with their local communities to bring forward plans for development and enhancement. The new emphasis on ‘local community planning’ in conjunction with local strategic planning will hopefully mean that the exclusively urban-focussed thinking of the past few decades will be balanced by a good dose of rural planning pragmatism – making things happen for the benefit of rural communities across the country.
The National Planning Policy Framework (NPPF) has further reinforced the message from Government that there needs to be a more tolerant approach to the needs and development potential in rural communities. The NPPF requires the adoption by all LPAs of a ‘presumption in favour of sustainable development’ and this has been enshrined in a ‘model policy’ proposed by Government to be included in all Local Plans. The model policy states: “When considering development proposals the Council will take a positive approach that reflects the presumption in favour of sustainable development contained in the National Planning Policy Framework. It will always work proactively with applicants jointly to find solutions which means that proposals can be approved wherever possible, and to secure development that improves the economic, social and environmental conditions in the area.” This positive statement is further reinforced by references throughout the NPPF that acknowledge the need to support rural planning objectives. This may well be an optimistic assessment of the potential for a meaningful rural renaissance, but the Government seems determined to try to redress the balance. Therefore, rural landowners and businesses should be planning now for how they might contribute to new opportunities for sensitive, small scale, appropriately designed development that meets local needs, supports rural community life and respects the local distinctiveness of each village. If parish councils are considering the possibility of creating a Neighbourhood Plan, it is essential that landowners get involved and play their part in providing for any new development proposals that might come forward. We have recently been involved in promoting edge-of-village sites for clients here in the South West and working alongside parish and town councils to assist them in producing Neighbourhood Plans.
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Steve Briggs Head of Planning (South West) 01823 445039 steve.briggs@smithsgore.co.uk
Great National Parks New Forest National Park, Hampshire South Downs National Park, West Sussex Dartmoor National Park, Devon Exmoor National Park, Somerset Broads National Park, Norfolk Peak District National Park, Derbyshire North York Moors National Park, Yorkshire Yorkshire Dales National Park, Yorkshire Northumberland National Park, Northumberland Lake District National Park, Cumbria Cairngorms National Park, North East Scotland Loch Lomond National Park, Glasgow, Scotland Brecon Beacons National Park, South Wales Snowdonia National Park, Penrhyndeudraeth Pembrokeshire Coast National Park, Pembrokeshire
Great Visitor Attractions British Museum, London National Gallery, London Tate Modern, London Natural History Museum, London Science Museum, London V&A, London Canterbury Cathedral, Kent Exbury Gardens, Hampshire Eden Project, Cornwall Colchester Zoo, Essex National Space Centre, Leicester Ashmolean Museum, Oxford Museum of the History of Science, Oxford National Railway Museum, York David Hockney Landscape, South Yorkshire Bamburgh Castle, Northumberland Merseyside Maritime Museum, Liverpool Imperial War Museum (North), Manchester Riverside Museum, Glasgow Kelvingrove Art Gallery & Museum, Glasgow Royal Botanic Garden, Edinburgh The Northern Lights, Aberdeenshire National Museum, Cardiff
Goodwood Racecourse, West Sussex Newmarket Racecourse, Cambridgeshire Towcester Racecourse, Northamptonshire Cheltenham Racecourse, Gloucestershire York Racecourse, Yorkshire Hexham Racecourse, Northumberland Cartmel Racecourse, Cumbria Musselburgh Racecourse, East Lothian Perth Racecourse, Perth Hamilton Racecourse, South Lanarkshire Ayr Racecourse, South Ayrshire Chepstow Racecourse, Monmouthshire
Great Farms Launceston Farm Bed and Breakfast, Dorset Maiden Castle Farms, Dorset Bartlow Estate, Cambridgeshire Brian & Patrick Barker, Lodge and Kiln Farm, Suffolk Sacrewell Farm, Cambridgeshire Home Farm, Hallington, Lincolnshire Sir Richard Sutton's Settled Estates, Lincolnshire Stoughton Estate, Leicestershire Vine House Farm, Lincolnshire Cotswold Farm Park, Kineton, Gloucestershire Middledale Farm, Humberside Busby House, North Yorkshire Glenapp Estate, Girvan, Ayrshire Colin McGregor, Coldstream Mains, Berwickshire
Great Sporting Estates Goodwood Estate, Chichester, West Sussex Great Shoot, Whitfield, Northumberland
Great Estates
Wakehurst Place Garden, West Sussex Waddesdon Manor, Buckinghamshire Cliveden, Buckinghamshire Stourhead, Wiltshire Blickling Hall, Norfolk Belton House, Lincolnshire Sudbury Hall, Derbyshire Fountains Abbey, North Yorkshire Cragside Estate, Northumberland Lyme Park, Cheshire Mar Lodge Estate, Aberdeenshire Bodnant Gardens, North Wales
Petworth Estate, West Sussex Clinton Devon Estate, Devon The Duchy of Cornwall Estates Holkham Estate, Norfolk Sandringham Estate, Norfolk Welbeck Estate, Nottinghamshire Burghley Estate, Lincolnshire Blenheim Palace, Oxfordshire Chatsworth House, Derbyshire Overbury Estate, Gloucestershire Castle Howard, Yorkshire Northumberland Estates, Northumberland Blanchland Estate, Northumberland Knowsley Estate, Merseyside Scone Palace, Perth Mostyn Estate, Llandudno
Great Walks
Great Rural Businesses
The Long Walk, Windsor South West Coastal Path Mousehole to Lamorna, Cornwall Blickling to Sheringham, Norfolk Cotswolds Way, from Chipping Campden to Bath The Roaches, Staffordshire Wolds Way, Yorkshire Cleveland Way, North Yorkshire Coast to Coast, Lake District Stanage Way, Derbyshire Elie Chain Walk,Fife Castell Henllys, Pembrokeshire
Windsor Farm Shop, Windsor Tregothnan Tea, Cornwall Grayingham Lodge, Lincolnshire Belvoir Cordials, Lincolshire Double Gloucester Cheese, Gloucestershire The Bell, Alderminster, Stratford-upon-Avon Capheaton, Northumberland Potadoodledo, Berwick-upon-Tweed, Northumberland Doddington Dairy, Wooler, Northumberland Bowland Brewery, Lancashire The Inn at Whitewell, Lancashire Westmorland Service Station, Penrith, Cumbria Scotch Whisky Association, Edinburgh
Great National Trust Properties
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Great Racecourses
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Is your building at risk from subsidence brought on by drought? The scorching summer and ensuing drought of 1976 is burned into folklore. Grass fires broke out, rivers vanished and the government told everyone to ‘save water, bath with a friend’. And it seemed that history was about to repeat itself until the wet Spring. But it’s not just flowers, fauna and crops that are the victims of drought. Buildings and homes are at risk of subsidence when the ground becomes exceptionally dry. As the ground beneath buildings dries out, the foundations effectively sink, causing cracking in the buildings’ fabric. And soils with a high clay content close to trees are at the worst risk of shrinkage. Modern buildings are becoming more ‘subsidence proof’ but many properties we manage are often older and of traditional constructions meaning they are often more susceptible to changes in ground conditions.
What should you do if you spot cracks in your building? Without being alarmist, our advice is to be vigilant to any significant changes in your property such as recent cracking, widening of existing cracks and sloping of floors. Doors that no longer shut properly and windows that appear slanted can also be indicative of movement in the foundations. Nearby trees can also cause the ground near properties to dry out more quickly, however, we don’t recommend cutting the trees down wholesale but to speak to a qualified forester or arboriculturalist first. Not all cracking in buildings is caused by subsidence; in older buildings of a more flexible construction, cracks can appear mid-summer that close up in the winter when the materials absorb the moisture. These ‘summer cracks’ are usually completely harmless.
What’s the solution? Sometimes, no action is required. Often it is merely a matter of repointing localised areas. However, if the cracking is deemed to be serious, underpinning or other ground stabilisation techniques may be required.
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Chris Batterby Architecture & Building Surveying 01543 266406 chris.batterby@smithsgore.co.uk
Ensure to insure…. Is your building insurance cover adequate? People often only think about Buildings Insurance cover when they are buying a property and regular reviews of their level of insurance cover are often overlooked. However, failure to check that an adequate level of insurance cover exists on a frequent basis can potentially lead to all kinds of financial headaches and can mean that your property could be under-insured especially after carrying out alterations, extensions and upgrades. As snow damage has become a regular feature in recent years and as droughts could become more common, the issue of under insurance has come to the fore once again. This is particularly important for key farm buildings that are essential to the daily operation of businesses, and nobody wants to have protracted negotiations with their insurance company or receive a lower than expected payout as a result of being under-insured. A review of the existing cover is a fairly straightforward process and can be achieved by applying a Tender Price Index Adjustment to the original Fire Insurance valuation if one exists. We should bear in mind that any existing cover is unlikely to be relevant beyond a period of five years and most insurance policies request an annual review together with a full recalculation on a five yearly basis to overcome this. A full Reinstatement Cost Assessment could be the best investment that property owners make this year. Such an Assessment should be undertaken by a specialist so that due consideration can be given to the cost of reconstructing the building rather than basing the cost on a market valuation, which is a different assessment altogether.
I think my flooding problem is caused by someone else – what can I do about it? Even in drought conditions drains and ditches can still become blocked. If your property is flooding because of a blocked drain or ditch, you can ask the Agricultural Land Tribunal (ALT) for help as it has jurisdiction over ditches and drains which have - or had - an agricultural function. The starting point for any flooding problem is to first establish the cause. If you think it is someone else’s responsibility, discuss it with them. Discussion and mutual agreement often go much further than “upping the anti”. It is always advisable to ask a specialist surveyor to look at the problem area for you because this will avoid you inadvertently agreeing to work which is not your responsibility – setting an expensive precedent! And if you are not sure who is responsible, the Agricultural Land Tribunal has helped to establish who is responsible for problem ditches, road drains and culverts.
Dan Coston Architecture & Building Surveying 01733 559317 dan.coston@smithsgore.co.uk
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Philip Lanc Drainage Advisor 01994 231789 philip.lanc@smithsgore.co.uk
PV Installations on The Crown Estate Our Renewable Energy team and staff around the country have been working hard to deliver a series of agricultural scale (50kWp) solar installations on behalf of The Crown Estate. Seven solar PV installations were installed and started operating before 31st March 2012 on agricultural buildings on six of the Crown’s rural estates. These were part of a strategic plan with the key objectives of: 1) Future-proofing tenants’ farming businesses by providing a secure and subsidised energy supply 2) Generating a guaranteed additional income stream over the next 25 years for the Estate 3) Reducing carbon emissions and increasing the proportion of renewable energy generated on the Estate Our role included leading feasibility studies to assess PV opportunities, running tender exercises to identify the most suitable installer and project managing the delivery of the installations. Each installation will produce about 40,000 units of electricity a year (but this varies according to their size, location and orientation), which will save over 20 tonnes of carbon dioxide equivalents a year. Depending on how much electricity is used on-site, this could cut the farmers’ electricity bills by £500-£2,000 a year. Some of the installations have an on-site monitoring system that connects remotely to a web-server to report performance in real-time. So whether you are in Edinburgh, London, or just down the road you can track how the system is performing and its operational status on your laptop or even on your smartphone! (see screenshot below).
We are now exploring the viability of PV installations across the Crown Estate’s rural and coastal portfolio as part of a second phase of installations.
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Lucy Morgans Head of Sustainability 0207 409 9498 lucy.morgans@smithsgore.co.uk
A place called home... First the bad news! This may be a novel way to begin a piece in a property publication, but I have a belief that we are only part way through a period rather similar to the recessionary inter war years. Growth was subdued and for a ten year period between 1926 and 1936 the value of a standard semi (the broad barometer of residential performance) changed very little and fell in real terms. However, despite the inauspicious circumstances of that decade there was significant house building both for owner occupation and by Councils, then the only major provider of rented social housing. Standards of construction and design improved and the period gave birth to many firms, which became the major volume house builders of the post war period. Development was facilitated by major bank lending to construction companies and for owner occupation and investment through lending by the then burgeoning building societies. In a deregulated construction industry there was a boom in building and employment. People secured much-needed houses at prices, or at rents, which they could afford. The good news is that in this precedent lies the seeds for optimism in our current situation for if, as a nation, we are to avoid the grave social consequences of a failure to provide houses for people who need them, we must build and build quickly. And not only for owner occupation but also for those who will not be able to buy in the foreseeable future. The numbers are as daunting as they are challenging with a forecast 240,000 new houses needed each year to meet the growth in households alone. Only 106,000 were built in 2011, the lowest rate since 1925! This suggests that bold action needs to be taken to facilitate lending for construction, owner occupation and investment. The availability of finance is the essential lubricant of an active market. The Government is taking tentative steps to assist this as well as measures to free up planning and other processes deemed to inhibit supply but ultimately it will be the interaction of conventional market economics which will determine success. A house is a place called home no matter how temporary that occupation might be. At one end of the scale may be the student enjoying the first taste of independent living who impresses his or her own personality on a meagre hired room. At the other end is the country residence held in the family for generations. In between these two extremes the majority lives. There is no escaping the fact that there are just not enough houses to meet demand and this is important because having a home ultimately provides stability, somewhere one can put down roots, protect as one’s own space and have the freedom to come and go. It is a hard fact that owning a home has currently become unaffordable to many. But I suspect that our personal aspiration and ambition will remain, as John Galsworthy would have it, “to set up as a man of property next, with a place in the country�. This may be of some extra comfort to many readers of this Newsletter who know and value such things!
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Peter McKendrick Former President of the RICS
"It took over 70 years for house prices to double from their 1900 level, but that feat was matched in the nine years between 1998 and 2007” Neil Monnery (2011) Safe as Houses? A Historical Analysis of Property Prices
£200,000
£180,000
£160,000
£140,000
£120,000
1900-1914
1920-1939
37 million people in Great Britain and 8.5 million houses in England and Wales.
The government introduces further subsidies to boost house building. Nominal house prices fell in the 1920s as the economic depression hit - but, due to deflation, real prices rose!
Most people rent their homes – only 10% own them. Houses are generally of poor quality and slum clearance is the subject of much debate.
Entrepreneurial house builders start to dominate. Most of the 1.5m houses built in the 1920s were state assisted while most of the 3m built in the 1930s were private sector built. 350,000 houses built in 1936.
Little government role in the housing market.
1918-1920 £100,000
£80,000
£60,000
The extension of the right to vote after 1918, especially for women, made governments start to play a role in the housing market.
25 year mortgages become more common – house ownership becomes available to the middle and some working class families.
To deliver its 'Homes Fit for Heroes' pledge, the government starts to subsidise house building (200,000 houses subsidized between 1919 and 1922).
1939-1950 Over a million houses are damaged or destroyed during WWII and so there is a perceived shortage of houses. Winston Churchill pushes for more house building "bedrooms before schoolrooms” - and sets a target of building 300,000 houses a year, which is achieved. Real house prices rise in a post-war boom, before falling back in the early 1950s and then starting their long rise to the late 2000s.
Real house prices are half 1900 levels, due to war, deaths and influenza, taxes and rebuilding after the war all reducing demand.
£40,000
£20,000
£0 1900
1910
1920
1930
1940
1950
1900–1995: +0.8% pa real house
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Nominal (1900 = £460)
1995 to 2010 An explosion in real house price growth as demand for houses outstrips building and there is increased speculation and lower mortgage costs. Mortgage debt rises rapidly as loan-to-income values are increased, deposit requirements are cut and interest rates fall.
1950s-1990s Slowly rising prices from the early 1950s to the mid-1990s. 417,000 houses built in 1968. Real house prices rise in the early 1970s as a result of the financial boom but fall back due to the OPEC oil price rises. A second smaller boom in the late 1970s is punctured by a weak economy. The Thatcher Government sells council houses to their tenants as part of its policy of increasing home ownership. This, falling interest rates and regulation combine to boost real house prices.
Over 60% of people now own their houses – but this is now falling and the private rented sector, which nearly doubled in the last ten years, is expected to grow. Over 250,000 new houses are needed EACH YEAR to meet demand from new household formation. How will this be done with (apparently) no money and net lending a twelfth of what was lent not long ago!!
Real prices were the same in 1960 as in 1900
1960
e price growth
1970
1980
1990
2000
2010
1995–2010: +5% pa
Source: Neil Monnery (2011) Safe as houses. A historical analysis of property prices
page 23
Real (1900 = £40,000)
Real signs of an improving market… With the continuing frenetic activity in the Central London housing market, fuelled mainly by wealthy foreign buyers, it’s becoming increasingly difficult to manage sellers’ expectations outside of the capital. The shame is that, in many UK regions, there is a perfectly good market, particularly for attractive rural property at a fair price – but with competition amongst agents for good houses, unrealistic asking prices inevitably get quoted by some firms and the market stalls. Buyers, armed with a wealth of comparable sales evidence on Rightmove and other sites, are sitting back and waiting for prices to fall to acceptable levels. Daily updates from the property websites show an unusually large number of price reductions, at a time of year when new instructions normally dominate. However, there are real signs of an improving market across a broad swathe of Central and Southern England, where the big price falls registered in 2009 are now in reverse. The further north you go, the tougher the market becomes, but the rural counties are generally faring better compared with the metropolitan districts. And across the UK, our offices have plenty of examples of appealing properties, marketed well and sold effectively, which give us real confidence for the Summer ahead.
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Andrew Turner Head of National Residential Agency 01904 756303 andrew.turner@smithsgore.co.uk
A raft of legislation‌. When writing this piece about eighteen months ago I had to report a mound of new legislative and regulatory requirements which apply to those clients who have residential property to let. Unfortunately, the politicians have been at it again and there is now a new range of compliance issues to trip up the unwary: Localism and tenancy deposits This piece of legislation has attracted a lot of attention, but one little-noticed provision is in relation to the handling of tenancy deposits. With effect from 6 April 2012 the requirements for the registration of tenancy deposits have changed. The fourteen day window for a landlord to supply proof of registration of a deposit to a new tenant has been extended to thirty days, but this apparent easing of the framework is coupled with far more draconian penalties for a failure to comply. The option of a late registration has gone so now, if a deposit is not registered within the thirty days, a tenant can claim between one and three times the deposit and, of greater concern, the landlord cannot serve a valid notice-to-quit until the deposit issue has been resolved (which probably involves refunding it in full). These changes also apply to the requirement for a landlord to provide ‘prescribed information’ to a tenant, although a notice-to-quit can be served if the detail is subsequently made available, outside the thirty day period. Energy Performance Certificates From 6 April 2012, a house to let now has to have an Energy Performance Certificate in place within seven days of being brought to the market, although we recommend that the Certificate is available when a property is first marketed. The summary EPC also must be attached to any marketing material that is sent out. Landlords and unpaid water bills Tucked away in the Flood and Water Management Act 2010, that apparently has nothing to do with residential property, are provisions that allow Government to make property owners liable for payment of unpaid water and sewerage bills if they fail to provide new occupier details to water companies within a specified timeframe of a new letting (probably 21 days). Given that the water industry seem to have been the main sector aware of the consultation, it seems likely that regulation will follow and it is probably only a matter of time before other utility providers win similar powers. The above clearly demonstrates the need for those involved in letting houses to adopt robust systems to ensure that all of the right consents, test certificates and processes are in place, or to employ someone to do it on their behalf! On a lighter note most letting agents are finding that demand for rental property continues to outstrip supply. There are marked regional variations across the UK, but rents are generally continuing to strengthen and are producing increased yields as a result of static house prices.
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Christopher Jowett Head of Residential Lettings 01962 857421 christopher.jowett@smithsgore.co.uk
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farmland values hold firm in first quarter and the outlook is good for 2012 Agricultural land values remain the same in the first quarter of the year but we expect them to rise in 2012, with our model forecasting a 7%increase.
Average price in England (£/ac)
1Q2012 (% change 4Q2011 since 4Q2011)
1Q2011 (% change in last 12 mths)
Despite the market becoming more discerning, the price of the best quality land should be supported by rising commodity markets and a continuing positive outlook for UK agriculture.
Bare land
£6,000 (-1%)
£6,100
£5,600 (+8%)
Equipped farms
£9,500 (0%)
£9,500
£8,700 (+9%)
It is too early to say what the effect of the CAP Reform will be. However, based on our analysis of land markets during previous reforms, the effect on prices is variable – it can be positive or negative – but the amount of land for sale before a reform always drops. The only factor that might encourage supply in 2012 is if landowners think that the market has peaked and want to cash in. The continued need to protect wealth through tax mitigation and avoid higher rate SDLT, combined with inflation and the Eurozone crisis are likely to mean more investors want to move into a stronger currency and tangible assets. So there should be greater demand for bigger units from investors – if they can find any!
All land
£8,800 (+1%)
£8,700
£7,900 (+11%)
Market activity is always low in the first quarter of the year and the amount for sale has been consistently low in the last three years, ranging between 16,100 and 16,500 acres. Lack of land for sale remains the dominant driver of the market and it is very obvious when the figures for specific farm types in specific areas are looked at:
No. of Land for sale in England in 1Q2012 farms for sale
No. of farms for sale over 250ac
Dairy farms in North West and North East England
3
3
Arable farms in the South East
2
0
Livestock farms in the West Midlands
4
0
All types of farm over 1,000 acres
1
n/a
In Wales the land market is extremely restricted with very little coming onto the market. As a result the small blocks of land have seen strong competition with prices in excess of £8,000 per acre for pasture.
One emerging trend is that the average size of land for sale is dropping. The number of large farms for sale has fallen over the last five years, which would account for the trend and the reasons are better profitability and economies of scale. Also evident is the reduction of bare land which has been replaced with an increase in equipped holdings.
Small % of farms marketed by <250 size category (All land) acres
There are also some common themes running in the Scottish market with strong demand for arable land (£7,000 per acre) and an increasing supply of equipped holdings although a high percentage are grassland farms. With lowland grassland at £3,000 – 3,500 per acre, other potential purchasers are increasing the competition on poorer land for uses such as forestry.
Medium Large <750 >750 acres acres
2008
73%
21%
6%
2009
71%
22%
7%
2010
73%
23%
4%
2011
73%
23%
4%
2012
73%
23%
3%
Five year average
73%
22%
5%
Land values are not rising as fast as the last couple of years but there is still strong demand albeit more cautious. Landowners considering a sale in the near future may well find now is the time to act.
Giles Wordsworth Head of National Farms and Estates Agency 01865 733302 giles.wordsworth@smithsgore.co.uk
Number and area of all land marketed per region | All farms (quarter 1)
East Midlands
East of England
North East
North West
South East
South West
West Midlands
Yorkshire England & Humber
Number of farms for sale 10Q1
14
20
2
11
12
16
7
4
86
11Q1
13
9
2
14
13
24
9
12
96
12Q1
12
11
5
9
14
14
12
11
88
10Q1
1,700
5,500
500
1,200
2,700
2,800
1,200
400
16,100
11Q1
2,400
2,500
200
1800
2,400
2,800
2,000
2,500
16,500
12Q1
2,300
3,000
2,100
1,600
2,000
2,000
1,800
1,500
16,200
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Total area (acres)
eQuestrian market uPdate
agricultural rents uPdate
Passage of years persuading you to give up your hunters? Children gone off to University? Simon Derby explores ways in which you can make your equestrian property pay for itself…
Agricultural rents rose by an average of 25% across England, Scotland and Wales in the 12 months to 31 October, according to our latest Agricultural Rents Database.
During these times of financial austerity, everyone has one eye on the bottom line and we are increasingly being asked by clients how to generate income or extra revenue to make equestrian properties work that bit harder to pay for themselves. Others are looking to add extra value to their equestrian homes as they seek to pay university fees or alleviate the burden of running a house with stables and property.
Our survey draws data from 1,700 rent settlements over 500,000 acres and a total rent roll of more than £23 million per annum.
Barns and outbuildings are no longer just a backdrop beyond the main house, they represent the potential for extra revenue or added value: think offices, light industrial space, storage, wedding venues, studios and holiday lets. In terms of adding value to your property, outdoor buildings can be converted into play rooms, wine cellars, extra accommodation for staff or dependent relatives. Location, as always, plays a major part in the equation; equestrian properties are often on the edge of villages and as such represent a prime opportunity for larger developments in a sensible and sympathetic manner. Our planning department has undertaken a number of appraisals recently on edge-of-village sites with a view to obtaining planning permission for residential housing.
The rent increase in 2011 was higher than that in 2009 or 2010, with arable and livestock rents increasing the most. In the last three years, the average increase in rent has been 21% which, for an average sized farm, has meant a rent increase of £3,500 per year. In terms of tenancy type, Farm Business Tenancy (FBT) rents rose by the most – an average of 33%, with Agricultural Holdings Act rents rising by 20%. FBT rental growth during the last 12 months was also significantly higher than 2009 and 2010 and this can be attributed to the influence of strong results from open market lettings. A copy of our Agricultural Rents Database is available to download from our website: www.smithsgore.co.uk/publications.
If the children have gone off to university and you are thinking about hanging up your boots but don’t necessarily want to sell the family home (think hanging on to the property for future grandchildren and ponies), you can rent your stables and land out. Renting can be a good way of offsetting the rising costs of maintaining stables and land but it is important to check out thoroughly prospective tenants.
Dr Jason Beedell Head of Research 01733 866562 jason.beedell@smithsgore.co.uk
Distribution of rents agreed in year to 31 October 2011
Simon Derby Head of Equestrian Services 01823 445036 simon.derby@smithsgore.co.uk
180 160 140 120 100 80 60 40 20 0
page 28
0
25
50
75
Arable
Dairy
Livestock
Mixed
100
forestry market uPdate
-5%
0%
5%
10%
15%
20%
25%
Equities
Forestry Commission disposals accounted for almost 40% of the total annual market value in the UK and dominated the Scottish market in 2010. In the latter part of 2011 the Forestry Commission has been slower to bring forward disposals but the overall market size increased by over 40% on 2010 levels to achieve a total transaction value exceeding ÂŁ49 million. Forestry Commission sales in England are still on hold awaiting the recommendations of an independent panel of experts on the future of the English Forest Estate.
(Source: IPD; total return shown)
Forestry
The market for forestry properties remained strong throughout 2011 and into 2012.
Forestry returns compared with other asset classes
Throughout 2011 there has been a shortage of forestry properties on the market, and this, taken together with very strong competition by potential buyers, has lead to a significant increase in prices paid for good quality forestry investments. Gilts
Investment interest has been driven by various factors including low interest rates, inheritance tax mitigation, disappointment with conventional stock market investments, fear of inflation and strong timber prices. There is also strong market demand for bare land for tree planting with values of suitable properties being driven by attractive grant packages and a lack of supply of suitable land.
Over one year (2010)
Over three years (2008-10)
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Andy Greathead Head of Forestry, Woodland and Arboriculture 01620 828979 andy.greathead@smithsgore.co.uk
Commercial Property
Smiths Goreâ&#x20AC;&#x2122;s Forestry, Woodland and Arboriculture Department can provide advice on both acquiring and maximising the potential of forestry and woodland assets, which are continuing to perform well despite the uncertain financial times.
Rural Property Investment Market Although business sentiment picked up after Christmas, this was not always reflected in the statistics, especially GDP which showed the UK slipping into a double dip recession. The Euro crisis is starting to dent confidence and it appears that commodity prices are falling. We remain cautious about prospects for the UK and believe growth will be flat in 2012. The investment market is currently dominated by private individuals attracted to the Inheritance Tax advantages. Investor interest strengthened in the latter half of 2011 compared with the first half of the year which saw a low level of activity. Access to quality investment assets remains relatively restricted and sentiment has weakened for investments in less fashionable areas such as remote parts of the country or with higher landlordâ&#x20AC;&#x2122;s liabilities. Ignoring development or strategic sites, average yields on investment properties in the last half of 2011 were in the region of 1.6% but the spread of yields increased from 1.5% to 2.2%. It appears, therefore, that the increasing divergence we are seeing in the vacant market between prime arable areas and the rest of the market is also being mirrored in the investment market. Given the rise we are seeing in tendered rents, we believe that opportunities may exist which could reverse the diminishing income return that investors have seen over the last decade. As the demand for food increases, commodity prices will creep up making farmland investments an attractive addition to the investment portfolio for the long term investor.
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Gerald FitzGerald Head of Investment 0207 409 9492 gerald.fitzgerald@smithsgore.co.uk
Telecoms The UK has committed to having the best superfast broadband in Europe by 2015 and mobile base stations have an important role to play in achieving this ambition. What is 4G? 4G is the fourth generation of mobile communications providing more speed allowing you to work up to ten times faster than the current 3G network. Whatâ&#x20AC;&#x2122;s the hold up? Everything Everywhere (the result of a merger between T-Mobile UK and Orange) are currently arguing their case with Ofcom, the telecoms regulator, to be allowed to roll out 4G on its existing spectrum. They are firmly behind the campaign 4GBritain, calling on the Government â&#x20AC;&#x153;to do whatever is necessary to move forwardâ&#x20AC;? with the rollout. However, Everything Everywhere faces stiff opposition from mobile operators O2, Vodafone and Three; during a recent consultation period these organisations objected to the proposed 4G rollout claiming that Everything Everywhere will get a considerable head start and undermine competition in the UK market place. Naturally Everything Everywhere counterargue that 4G will bring considerable social and economic benefits to rural areas. What does it mean for landowners with base stations on their property? The new 4G network, when it arrives, may require some operators to upgrade their existing sites. While Ofcom continues to consider the various arguments between the mobile operators, we are advising landlords to use the time to review their existing leases to establish if the current contract allows the operator to use the site for 4G applications and equipment. While there is a significant push to get 4G up and running, operators are also under pressure to reduce their operating costs in a tough economic climate and satisfy the needs of their customers; these key factors will inevitably mean that, at some point, operators will be looking to re-negotiate rental terms. As well as reviewing leases, we are able to advise you as to how important your site is strategically to operators. Masts represent a significant and regular source of income and landowners should take professional advice to maximise this income stream.
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Lorna Broadbent 01772 663123 lorna.broadbent@smithsgore.co.uk
MANORIAL MINERAL RIGHTS There has been much recent publicity surrounding the importance of registering manorial rights with the Land Registry prior to 13th October 2013. After this date, such interests will cease to be legally ‘overriding’ and will be lost on the subsequent disposal of property over which they could be exercised. The registration of such interests may not previously have been a priority for some owners, given the many other demands on resources and the often painstaking research of public records and estate archives that is necessary to prove ownership.
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Manorial mineral rights, under former copyhold land1 and inclosed commons2, often cover a wide area and can be detached from the ‘core’ surface interests. The extent and nature of manor boundaries may not be known or become apparent until the research is complete.
oUt of sigHt, oUt of minD?
Future opportunities may exist in some locations to exploit previously unworked minerals of value; it should be noted that a manorial mineral owner may need to enter into an agreement with the surface owner in order to secure access to the minerals beneath. Significant commercial developments and major infrastructure projects can cause disturbance to minerals beneath the surface. In some cases, developers may have rights to cause such disturbance; where they do not, developers will need to reach agreement with the mineral owner. Whilst this can, understandably, be unpopular with developers, it should be recognised that manorial mineral rights, as a legitimate interest in property, are of no lesser significance simply because they are hidden beneath the surface.
In some cases, where records are scant or have been lost, the costs of researching and attempting to register manorial interests may outweigh any benefit. In other cases, where records are good and manorial interests cover a wide area, completing the research and registration will secure rights which may yield substantial future returns. What is clear is that if no action is taken, these historic assets will disappear over the horizon, eventually to be lost forever. The author has been involved in researching and protecting manorial rights for a range of clients.
Charles Baker 01228 554221 charles.baker@smithsgore.co.uk
1
Copyhold land is an ancient form of land tenure where the individual held the land as a tenant of the Lord of the Manor.
2
Inclosed/Enclosed common is former waste or common land that was divided and allotted as freehold land to individuals within the Manor.
page 33
As the deadline for registration approaches, owners who have not yet undertaken the necessary research will need to consider whether the time and expense of doing so is justifiable. In certain circumstances, the duty upon trustees to protect trust assets will also be a consideration.
Gearing up to meet future challenges Duncan Sinclair, Agriculture Manager at Waitrose, outlines how it is working with its farmer suppliers. Waitrose working with our Business Improvement Team The economic climate we will be operating in through the remainder of 2012 will continue to strongly influence the performance of our businesses, wherever in the agricultural or rural supply chain we are operating from. As yet it is still too early to start speaking about the â&#x20AC;&#x2DC;first green shoots of recoveryâ&#x20AC;&#x2122; and that is a trap I am not prepared to fall into!
It is fairly clear that consumers in the high street remain focussed on value and that will undoubtedly mean operating in a very competitive retail marketplace. That aside, in the UK we have two major events to enjoy this year; the Queenâ&#x20AC;&#x2122;s Diamond Jubilee and the London Olympics, both of which have the potential to positively influence consumer spending and the wider economy.
page 34
In the short term, as someone with responsibility at Waitrose for the livestock supply chains, this means that our work and activity over the next twelve months will focus on driving efficiency and reducing costs where possible. This needs to complement the work of our buyers who are focussed on maximising the return from the market place. The battle for market share will mean it will be a real struggle for them to get more back from the marketplace in the current economic climate.
Delivering the Agricultural Strategy to our farmers
Waitrose is a business which prides itself in taking a long-term view and with strong growth aspirations, we cannot ignore what our future raw materials needs will be despite the short-term challenges. We have developed our own Agriculture Strategy which has at its core our growth plans; and around that identifies four key pillars to focus upon. These are Security and Continuity of Supply, Driving Optimal Efficiency, Environmental Sustainability and Stakeholder Engagement. Under each of the pillars we are developing programmes of activity to engage our farmers and help them take their businesses forward while meeting our future raw material requirements. To do this effectively we need to draw on expertise from a wide variety of sources â&#x20AC;&#x201C; the levy boards, academics, vets, consultants and land agents. Over the last four years we have developed a relationship with Smiths Gore to deliver bespoke activity to our farmer supply base. Together we have developed two courses; one on Succession Planning and the other on undertaking a Financial Health Check of the farm business. Both these courses have been very well received by our farmers and we are committed, in conjunction with our processors, to continue to invest in delivering these using Smiths Gore facilitation expertise. We look forward to developing our relationship with Smiths Gore over the coming years and building on the solid foundations we have already established. A natural extension would be to identify areas of future opportunity to supply Waitrose across a range of livestock products.
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL SUSTAINABILITY
DRIVING OPTIMAL EFFICIENCY
SECURITY AND CONTINUITY OF SUPPLY
OUR AGRICULTURE STRATEGY
Keith Barriball Head of Business Improvements (England)
page 35
Duncan Sinclair Agriculture Manager, Waitrose
Why read an article on CAP reform when, to borrow the words of Manuel, the long-suffering waiter from Fawlty Towers, it often feels as if “I know nothing”? I suppose we need to follow the machinations as the CAP is the single most important policy that affects UK farming. It is also a fascinating window on political decision making and how 27 very different countries can agree a policy that suits them all. So here we go…
Since the reform proposals were published in October, there has been lots of mainly negative debate. Pretty much all of the main elements of the proposals have been criticised. Some of the vitriol has been focussed on greening, which is the proposal that farmers will have to do at least three things to benefit the environment in addition to cross-compliance to receive a top-up to the annual basic payment. European farming organisations, including the EU farm lobby group COPEGA COGECA, say that allocating 30% of Pillar 1 budget to greening is too high and that having to have 7% of land managed for the environment is too high when more food needs to be produced. This issue – the balance between production and the environment – is a key one. And it also introduces some new jargon. A discussion is happening at the moment between the European Commission, farming industry and environmental lobby on how to fund more research on boosting agricultural output in a sustainable way. The most likely vehicle for doing this seems to be something called European Innovation Partnerships, which is a Europe–wide research network which is also responsible for transferring the research from labs onto farms. Its significance to farmers, other than the research that it produces, is that it is likely to be funded out of Pillar 2, so potentially reducing the spending that trickles down onto farms. The proposed redistribution of the overall budget between Member States, so that payment rates per hectare are more equal, has also come under fire. The older, more ‘Western’ Member States want to slow the speed of redistribution down as it will mean a transfer of spending from them to the newer, ‘Eastern’ Member States. This will be a key area for debate as will the linked issues of the overall budget for farming (to be agreed by end of 2012) and the relative amount of spending under Pillars 1 and 2. More fundamental discussion, which raises thoughts of whether there will be or should be a common agricultural policy across Europe or whether Member States should have more independence to set their own policies (called subsidiarity in Euro-speak), has been on the amount of flexibility that Member States should have under Pillar 1 to tailor policies to suit their national characteristics, including on capping and active farmer. Most countries are calling for more national flexibility, and France in particular has been very active in agreeing bi-lateral agreements with Germany, Spain and Bulgaria. So the political heat is being turned up on the European Commission. This could be good news for the UK as the ‘active farmer’ definition could be one of the most problematic for landlords and tenants, investors and conservation bodies. But expect the European Commission to try to kick this into the long grass as it would mean a transfer of power from them, back to Member States. There are also more prosaic disagreements on the process of the reform, such as how much policy detail should be agreed before the budget for agriculture is known. However, whatever is agreed, it is becoming increasingly likely that implementation of the reforms will be delayed from 1 January 2014. More anon.
page 36
Simon Blandford Head of Farm Management 01962 857405 simon.blandford@smithsgore.co.uk
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WE DON’T KNOW When, hoW MUCH OR What WILL BE AGREED BUT PLEASE read on…
Welsh Reorganisation into a single A One-Stop-Shop or a Quango Cymru? The decision to merge the Forestry Commission Wales, Countryside Council for Wales and The Environment Agency Wales into a Single Environmental Body (SEB) has laudable objectives, but will it deliver? The scheme aims to simplify regulation by removing organisational boundaries and giving consistent guidance. By April 2013 it will have defined duties representing the three former agencies and will be responsible for delivery of the Welsh National Environment Framework. Given the scale of the framework – which has yet to be detailed – and the differing objectives and cultures of the current agencies, it is a formidable remit. Added to which the new body has originated from an initiative to cut operational costs and deliver a streamlined service. Clearly the forthcoming Chief Executive and Management Board have much to achieve. The Forestry Commission’s commercial activities, owning 6% of Welsh forests and being the largest of the three agencies, make it well placed to take a leading role in implementing financially sustainable policies. However, it must avoid becoming imbalanced by aggressive lobbying on biodiversity, public access and amenity issues. The current consultation period is crucial to the setting out of this framework.
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In implementing the proposed ‘Ecosystem Approach’ through the National Environmental Framework, the new body has a difficult balance to achieve.
environmental Body With the Welsh Assembly Government retaining control of funding under the Welsh agri-environmental scheme Glastir, there are obvious issues concerning independence, which will be more acute with the scrapping of the Better Woodlands for Walesâ&#x20AC;&#x2122; scheme and replacement with options under Glastir. Crucially, Glastir provides no output-based support, and forestry owners will only have access to compensatory grants, based on income foregone in return for environmentally focussed projects. Welsh farmers may well have much to be thankful for, with the retention of Glastir and the Single Payment Scheme under Welsh Assembly Government control, where the prospects for economically driven funding are more positive. At this stage it is not clear as to what extent the new body will be given powers to exercise inspection and monitoring of these schemes, and it must be hoped that this will be a matter of flexibility and support rather than enforced regulation. Further concerns include the devolution of the Forestry Commission and Environment Agency Wales, with the inherent possibility of increased licensing costs. Transparency and accountability have also been obligatory when these agencies have been independent â&#x20AC;&#x201C; it remains to be seen where these safeguards will be enshrined within the new organisation.
James Perks Abergavenny office 01873 851893 james.perks@smithsgore.co.uk
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There is an opportunity to combine the best attributes of the three agencies involved. However, the success, and perhaps longevity, of the Single Environmental Body will be judged not only on its policies and objectives, but also on the degree to which it delivers them.
sHoot BenCHmaRking: 2011/12 SEASON Our Shoot Benchmarking Survey, run in conjunction with GunsOnPegs, is now in its third year and in mid-February we circulated the input form to collect data for the 11/12 season. We are delighted that the two key shooting organisations, The British Association for Shooting & Conservation (BASC) and the Game & Wildlife Conservation Trust (GWCT), have joined us as partners to the survey this year. The primary purpose of the Survey continues to be so shoots can compare and contrast their income and expenditure against ‘the benchmark’, and hence identify and act upon measures to improve profitability by either or both, driving up income and reducing costs. Each shoot that takes part receives a bespoke output report from our research team. All information supplied is treated on a strictly confidential basis and data is published on an anonymous basis. As in previous years, the results of the survey will be announced at the CLA Game Fair at Belvoir Castle in July. We have also held two regional Shoot Seminars, which have been well received by those attending. We would welcome contact from other ‘Shoot Groups’ who would be interested in holding an event in their area.
David Steel Head Of Sporting 01772 663122 david.steel@smithsgore.co.uk
ARE YOU paYing too mUCH FOR YOUR POULTS? IS YOUR CHaRge peR BiRD pitCHeD CoRReCtlY TO BE COMPETITIVE AND PROFITABLE? HOW DOES YoUR % RetURn CompaRe WITH THE NORM? IS YOUR keepeR ReCeiving Benefits COMPARABLE WITH OTHERS?
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IS YOUR oveRage poliCY TOO GENEROUS OR TOO HARSH?
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faye gonZaleZ scooPs toP aWard... Philip Coles, Partner in our York office, joins The Duchy of Lancaster on a part-time basis. The Duchy welcomes Philip Coles to the London team this spring. Philip has recently been seconded to The Duchy of Lancaster on a part-time basis as Rural Surveyor of Lands. His role will involve implementing strategies and objectives for all of our rural surveys as well as overseeing our managing agents, Smiths Gore, Bidwells and Savills. After graduating from Reading University with a degree in Estates Management, Philip has spent over 30 years as a rural surveyor in the Yorkshire and North East regions. He qualified as a Fellow of the Royal Institute of Chartered Surveyors (FRICS) in 1979 and in the same year became a member of the Central Association of Agricultural Valuers (CAAV). From 1993 – 2002, Philip was chairman of examinations for the CAAV’s Northern Group and also sits on the organisation’s Valuation, Compensation and Tax Committee. Philip will spend part of the working week in London at The Duchy office and the rest in the Smiths Gore office in Darlington, County Durham, where he will continue his role as a partner. He is married with two children and in his spare time enjoys cricket, forestry and family life. He is also a member of the RICS President’s Arbitrators Panel. Philip has been involved with the management of the Yorkshire, Lancashire and Crewe and South Surveys since 2002 and as a result will be known to many of the Duchy’s tenants.
We are delighted to announce that Faye Gonzalez, who is based in our York office, obtained the highest marks in the country for all three parts of the Central Association of Agricultural Valuers’ (CAAV) exams, which she sat last autumn. Faye will be presented with the Royal Agricultural Society of England (RASE) Talbot Ponsonby medal during the CAAV AGM on 29 June in North Devon. Faye is the third person from Smiths Gore to win the prize. Mark Nicholson won it in 1974 and David Steel in 2004. Faye has now been invited by RASE to become an examiner.
green gold
ONE THOUSAND YEARS OF ENGLISH LAND Smiths Gore was delighted to support the publication of ‘Green Gold – One Thousand Years of English Land’ by Peter Clery. This fascinating book is essential reading for farmers, landowners and anyone interested in the history and current and future use of land in England. The book tracks the 1,000 year history of English land from the tax-gathering skills of the Anglo-Saxon Earldomen through to the current day of the Common Agricultural Policy. The publication is available from Phillimore &Co Publishers, e-mail publishing@phillimore.co.uk
Reproduced by kind permission of the Duchy of Lancaster.
neWs in Brief rtPi young Planner of the year Nikola Miller of our Edinburgh office recently won the prestigious Royal Town Planning Institute Young Planner of the Year Award. The prize was a trip to the American Planning Association’s (APA) annual conference in Los Angeles. The 4 day conference hosted 5,000 planners from across the globe and focussed on the theme of “Re-imagine, Re-invigorate, Re-invent LA, celebrating good planning and the work that planners do across America and internationally. Nikola attended the American Planning Awards lunch, drinks reception with young planning professionals and an International Dinner event at the world famous Walt Disney Concert Hall.
office moves Our Perth office has relocated its six-strong team from Scone Palace where it opened with a staff of two, three years ago to 13 Marshall Place on the South Inch. The arrangement with Scone Palace, which was only ever temporary, enabled the team to establish a strong presence in the Perth market to complement the services already being delivered by our other Scottish offices in Dumfries, Fochabers, Edinburgh and Haddington. Our Marlborough office has moved to 42 High Street Marlborough, Wiltshire, SN8 1HQ. The team in Edinburgh has moved to 22 Young Street, Edinburgh, EH2 4JB.
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Our Preston team, led by Partner David Steel, will relocate from Preston at the end of July to 5 Church Street, Clitheroe, BB7 2DD.
Offices
Estate offices
Abergavenny t 01873 854411
Exeter t 01392 278466
Perth t 01738 479180
Andover t 01264 774900
Fochabers t 01343 823000
Peterborough t 01733 567231
Berwick-upon-Tweed t 01289 333030
Haddington t 01620 828960
Petworth t 01798 345980
Carlisle t 01228 527586
Lichfield t 01543 251221
Stamford t 01780 484696
Cirencester t 01285 888000
Lincoln t 01522 539555
Stow-on-the-Wold t 01451 832832
Clitheroe t 01200 411050
London t 020 7409 9490
Taunton t 01823 445030
Corbridge t 01434 632001
Maidstone t 01732 879050
Truro t 01872 274646
Darlington t 01325 462966
Marlborough t 01672 529050
Winchester t 01962 857400
Dumfries t 01387 263066
Newmarket t 01638 665848
York t 01904 756300
Edinburgh t 0131 344 0888
Oxford t 01865 733300
Angmering Park Arbury Barlavington Dunnecht Exbury Firle Goodwood Knowsley Leconfield Llanarth Llanover Scone Windsor
Other offices Pembroke DTE office Sennybridge DTE office Tomintoul Forestry office
Overseas offices Australia British Virgin Islands
Services Architecture and Building Surveying Terry Adsett | 01798 345988 | terry.adsett@smithsgore.co.uk
Investment Gerald FitzGerald | 020 7409 9492 | gerald.fitzgerald@smithsgore.co.uk
Business Improvement Matthew Currie | 01387 274382 | matthew.currie@smithsgore.co.uk
Minerals and Waste John Dutson | 01962 857408 | john.dutson@smithsgore.co.uk
Commercial Property: City Centre James Dunlop | 020 7290 1611 | james.dunlop@smithsgore.co.uk
Planning Ian Smith | 01733 559320 | ian.smith@smithsgore.co.uk
Development Robert Weldon | 020 7290 1618 | robert.weldon@smithsgore.co.uk
Project and Construction Management Piers Owen | 01872 274646 | piers.owen@smithsgore.co.uk
Equestrian Services Simon Derby | 01823 445036 | simon.derby@smithsgore.co.uk
Property and Lettings Management Christopher Jowett | 01962 857421 | chris.jowett@smithsgore.co.uk
Estate Management Rupert Clark | 01798 345999 | rupert.clark@smithsgore.co.uk
Research Dr Jason Beedell | 01733 866562 | jason.beedell@smithsgore.co.uk
Facilities Management Jonathan Becker | 01733 559966 | jonathan.becker@smithsgore.co.uk
Residential Property Agency Andrew Turner | 01904 756303 | andrew.turner@smithsgore.co.uk
National Farms & Estates Agency Giles Wordsworth | 01865 733302 | giles.wordsworth@smithsgore.co.uk
Rural Commercial & Broadband Ben Knight | 01285 888008 | ben.knight@smithsgore.co.uk
Farm Management Simon Blandford | 01962 857405 | simon.blandford@smithsgore.co.uk
Sporting Services David Steel | 01772 663120 | david.steel@smithsgore.co.uk
Forestry, Woodland and Arboriculture Andy Greathead | 01620 828979 | andy.greathead@smithsgore.co.uk
Sustainability, Renewables and Energy Lucy Morgans | 020 7409 9498 | lucy.morgans@smithsgore.co.uk
GIS Mapping Bob Allcock | 01543 261990 | bob.allcock@smithsgore.co.uk
Telecommunications Lorna Broadbent | 01772 663123 | lorna.broadbent@smithsgore.co.uk
Historic Building Conservation and Repair Jane Jones-Warner | 01798 345910 | jane.jones-warner@smithsgore.co.uk
Valuations Gerald FitzGerald | 020 7409 9492 | gerald.fitzgerald@smithsgore.co.uk
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International Property Edward Childs | 001 284 494 2446 | edward.childs@smithsgore.co.uk
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