2023 Roundup & 2024 Predictions
Agricultural:
2023 has once again been an exceptionally busy time for the Agricultural team across all areas of our professional work, as we continue to navigate through some of the biggest changes and uncertainties that agriculture has faced for years. As we transition away from the Common Agricultural Policy; 2023 marked the last year to make a claim under the Basic Payment Scheme before de-linked payments are introduced between 2024 to 2027, and we have seen strong interest in the ever-evolving Environmental Land Management Schemes that are becoming available to our clients. As a result, Bletsoes have provided advice and submitted applications for numerous clients in respect of the new actions available under schemes such as the Sustainable Farming Incentive, while recent news suggests that DEFRA looks set to release an additional 50 actions with increased payment rates. These new opportunities also bring new challenges, and many of our clients are finding that a balance needs to be struck between food production, profitability and sustainability. Bletsoes have been able to provide expert and strategic advice to many of our clients on all aspects of their farming business, and deliver solutions to many of the challenges that farmers and landowners have encountered.
Despite the uncertainties that 2023 has brought, it has been an extraordinary year for agricultural land transactions, and Bletsoes have been instructed to sell everything from large blocks of bare agricultural land through to complete commercial farms and smaller parcels of paddock land. With new instructions, the majority of sales have resulted in Bletsoes negotiating and concluding transactions at figures well in excess of the Guide Price. We have seen significant premiums being paid by Purchasers, for smaller and larger blocks alike. Notably, we were instructed to bring Rectory Farm in Worcestershire to the open-market, which comprised approximately 192 acres of primarily arable land in a ring fence with a steel-portal frame barn, and occupying a prime and strategic position, close to the M5. A remarkable number of enquiries were received, and as a result the property went to “best and final offers”, where the price achieved was well in excess of the Guide Price and an excellent outcome was achieved for our clients within only 5 months of launching the property, including an overage retained on the land. Through our office at Stratford-Upon-Avon, we are well placed to provide expert advice and market knowledge of agricultural property transactions across the Midlands region, and therefore if you are considering the sale of your property, please do get in contact with a member of the Agricultural Team to discuss your objectives. Equally, if you are looking to purchase agricultural land, please do get in contact to discuss your requirements, as new and exciting instructions begin to emerge in 2024.
There has been much discussion on the hot topic of Biodiversity Net Gain (BNG), and the mandatory requirements to be introduced in November 2023, where developers were required to achieve a 10% “net gain” in biodiversity, in order to obtain planning permission for development as set out under the Environment Act 2021. Where this cannot be achieved on-site, it may provide opportunities for landowners to receive future income from Biodiversity Net Gain. For example, by securing a Conservation Covenant or Section 106 Agreement, which gives a commitment to manage the habitat for a minimum of 30 years in return for an annual income. However, the mandatory BNG requirements were put back to January 2024, and now further delays are being suggested. It will only become apparent through 2024 quite how significant the new BNG implications will be for farmers and landowners, and the wider implications of this, particularly on land values. As ever, these new opportunities give the chance for many of our clients to step back and consider the overall longer-term objectives for their farming business and how income may be maximised, whilst reducing risks and inputs. With this in mind, we have assisted and advised numerous clients on new farming opportunities, to include Contract Farming Agreements, as well as new Farm Business Tenancies.
Many clients are also considering the opportunities for on-farm diversification, and the alternative income-generating opportunities available to them, in order to maximise profits and spread risk across the business. Often working with our Planning and Development Team, Bletsoes have successfully advised and helped many clients navigate the often-overwhelming possibilities that are available. Always taking into account the characteristics of their existing holding and choosing projects that fit with their longer-term objectives of the holding. Coupled with the phasing out of area-based subsidies, many existing clients are now exploring how they may be able to take advantage of future diversification opportunities that are suitable to their specific requirements, and therefore if you would like to discuss this, as well as any other agricultural matter, we would ask you to contact a member of the Agricultural Team on 01832 732241.
Planning & Development:
The recent rapid rise in interest rates created a challenging housing market in 2023 and most house builders therefore “stood back” from the development land market. However, we were fortunate to still have exchanged contracts on a number of sales of development land through the year, including one only a couple of months ago. Looking forward into 2024, with interest rates hopefully having peaked and a competitive mortgage market driving down lending rates to house buyers, the market should start to regain some momentum.
There is also a realisation within the house building industry that owing to the slowness of the planning system and the increasingly challenging process of achieving a consent, that there is a real shortage of sites coming forward. House builders need to buy land over the next 12 months or so, if they are going to be in a position to sell houses in 2 to 3 years time. This should help to support development land values this year and we have a number of sites close to achieving planning permission which will be an interesting test of the market.
A number of house builders and promoters are also actively seeking longer term strategic opportunities. With a change in government seemingly an odds-on bet, developers are anticipating a more pro-development administration, albeit with a potential sting in the tail in terms of tax!
Please contact Alistair Brodie, Peter Moore, Andrew Middleditch or Chris Templar to discuss any planning and development matters.
Residential Lettings:
2023 has been yet another busy year for Lettings, improving on 2022. As well as managing and looking after our existing portfolio of properties, we welcomed 20 new properties onto our books during 2023, with many of these properties coming onto our Fully Managed service.
The private rented sector continues to be subject to increased levels of government scrutiny and intervention, which highlights the need for the professional management of residential properties. The Bill for the right to rent reforms had its Second Reading in Parliament in October 2023, and the first sitting of the Public Bill Committee took place last month. Our Membership body, Propertymark gave evidence at the first sitting, calling on the government to tackle redress and to keep fixed term contracts. In an easing of climate change policy Rishi Sunak announced, in a recent speech about Net Zero, that no legislation will be introduced requiring property owners to make energy efficiency improvements and that extra money will be made available to those wanting to replace current heating systems with a Heat pump or Biomass boiler.
A anticipated change in government this year may see further changes to policy and, as Propertymark members, we are kept abreast of new legislation heading our way and are proactive in keeping our Landlords informed and compliant and will continue to do so through 2024.
If you would like more information on the service which the Bletsoes Residential Lettings team can provide, please contact Teresa Mutton, Lauren Alexander or Jo Govier on 01832 732188.
