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InsideFarmland’s fertile futureSecuring RDPE grant funding Resolving disputes through mediationThe future of food & farming

2010 | savills.co.uk

How cutting costs can help maximise your estate’s potential

Working on the bottom line

Marc Faber, the notoriously bearish market pundit, recently advised investors to buy farmland and gold.

History shows that both asset classes have proved a good hedge against inflation and performed well during times of economic instability, and that has certainly proved the case lately.

Putting monetary attractions to one side though, the burgeoning global demand for food means the need for productive farmland can only increase, and with that, so too will its value.

We published our UK Farmland Value Model towards the end of last year. It projects that land values are likely to rise by an average of six per cent each year over the next five years, although the best quality land could exceed this.

Perhaps not surprisingly, given the growing food security debate, UK agriculture is firmly back on the political agenda. The Government’s Chief Scientific Advisor is on record saying that over the next 50 years we cannot manage land in the way we have done, and at this year’s Oxford Farming Conference, Hilary Benn presented the Government’s strategy for the agricultural sector, ‘Food 2030’. Last month Nick Herbert, Shadow DEFRA Secretary, set out the Conservative Party’s policies for the farming industry.

Sir Don Curry, writing in this publication, is optimistic about the future for UK agriculture, although he stresses the importance of a united farming and food sector lobby in the run-up to the next round of CAP reform negotiations. He warns that the Treasury’s stance, particularly post the General Election

04 Working on the bottom line Rural businesses can emerge healthily

from challenging times by implementing sensible cost-cutting efficiencies

08 Alevelplayingfield Attempting to unravel the issues behind the 2013 CAP reform debate

10 Reaching agreement Resolving dispute in the courts has

been over-ruled by the more satisfactory route of mediation

12 Farmland’sfertilefuture Savills newly established Farmland Value Model forecasts farmland’s future

16 Permissiongranted Discover how a Cornish dairy farm

secured the largest grant of its kind from the Rural Development Programme

18 Futureoffood&farming How will the UK fare in the inevitable shake-up of global food production? Sir Don Curry answers our questions

20 Diggingdeep The complexities of mineral extraction are unearthed to reveal opportunities for landowners

21 Passingthetest The crucial role tax planning plays

in the running of a rural business

22 Ruralmatters A round-up of Savills rural news, diary dates, award schemes and initiatives

26 Officedirectory Savills UK rural offices

Savills|AspectsofLand03

Hugh CoghillHeadofRural

when the public purse will be under even closer scrutiny, could be far from palatable for the farming sector.

Approximately three-quarters of the UK’s land is classified as agricultural, and landowners share a huge responsibility as custodians of the landscape. The growing costs involved in this duty, though, are squeezing profit margins ever tighter. Savings, such as outsourcing repairs and maintenance, or pooling resources with neighbouring landowners, can make a marked difference to the bottom line, particularly when such measures are allied with taking advantage of potential income generating opportunities.

It may not be well known that every County Council in the UK is now obliged to produce a list of prospective sites for mineral extraction to ensure adequate supplies for the next seven years, which must be reviewed every five. Landowners often worry about mineral extraction largely because they are wary of the local reaction and the perceived detrimental after-effect to the estate. It is however a source of valuable income with the additional benefit of part being subject to Capital Gains Tax, which is currently taxed at a lower rate.

I hope you find plenty of interest in our first issue of Aspects of Land for the new decade, one that I expect will see some significant and positive changes in our industry. As always, I would welcome your comments.

INVESTMENT ADVICE Theinformationandopinionscontainedinthismagazinedonotconstituteprofessionaladviceandshouldnotbereliedupon.Specificadvicerelatingtoyourindividualcircumstancesshouldbeobtained.

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Savills is deeply committed to life and business in the countryside. This means that we identify with the needs and objectives of our clients. They know what they would like to achieve and our role is helping them to achieve it – however ambitious it may seem.

It’s a matter of developing good relationships. Savills has been at the heart of the rural economy for more than 150 years, working with clients to grow and develop their business interests. Our services range from estate management & consultancy to agribusiness, through to estate & farm agency and professional services. All of this is backed up by a research department that puts us at the cutting edge of change.

Good relationships help us deliver. We offer a service that provides exceptional value through a depth of knowledge and a wide network of contacts unrivalled in the fi eld of property. It’s about know-how and know-who.

Savills – developing good relationships

Hugh CoghillHead of Rural01223 347 [email protected]

savills.co.uk

Developing

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Aspects of Land | Estate management

As rural businesses begin to emerge from a challenging time, implementing cost-cutting efficiencies

in the short-term could help open up your estate’s investment potential in the future Words: Ross Clark

Working on the

bottom line

W arren Buffett said it is only when the financial tide goes out that you discover who has been swimming

naked. In contrast to banks and other highly leveraged businesses that have been savaged over the past two years, the recession has revealed most rural estates to have been well-clothed.

The long-term thinking which lies behind the running of estates has served their owners well in straitened times. Nevertheless, rising costs and income under pressure have presented a challenge in this sector of the economy as in every other. To maintain income and keep estates intact, it is vital that owners keep costs under control and, in many cases, delay investment until better times.

Weathering the storm Rural estates began the recession well, because commodity prices kept farming incomes high. Estates also avoided large capital losses suffered by other investments. In 2008, let agricultural property produced a total return of 30 per cent. By contrast, residential property produced a negative return of 13 per cent,

urban commercial property minus 22 per cent, and equities minus 30 per cent. Softening land values, however, reduced this to nine per cent in 2009 (although values have been quick to regain lost ground). Commercial assets on rural estates have also weathered the recession well, producing a total return of 8.6 per cent in 2009, in huge contrast to the pain suffered by investors in urban commercial property. Residential property, however, has been affected by the slump in property generally, producing a negative return of 8.2 per cent in 2009.

There are more challenges to come. With the economy showing signs of being slow to emerge from recession, many commercial and residential tenants will continue to struggle to meet their rent. Taxes will have to rise; in some cases they already have. Empty commercial premises in particular leave landlords with a headache. After a three month period of grace owners of empty properties in England are now liable to full business rates. In addition, estates face a potential loss of income from mobile telephone masts as operators begin to amalgamate their networks.

Estates that come through this tricky environment best will be those who take

04 Savills | Aspects of Land Savills | Aspects of Land 05

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Aspects of Land | Estate management

the most effort to understand the needs of their tenants. It is better to suffer a cut in rent than to have land and buildings standing idle. Controlling costs over the coming year will be a more realistic means of maintaining profits than increasing income from rents.

While there will be opportunities to invest, these need to be carefully thought through. In this, the Savills Estates Benchmarking Survey, one of which covers England and another which covers Scotland, provide a vital role. Analysing responses from 200 estates covering a million acres across the UK, they provide a unique insight into where estates are investing their money, and the results of those investments.

One thing that has surprised Ian Bailey, head of rural research for Savills, is the poor correlation between money that is spent on improvements to residential property and the increased rental income that results from it. “Over the course of 2009 estates increased the spending on repairs and improvements to residential properties by 20 per cent,” he says. “This came on the back of increased income from agriculture in 2007/08. But it didn’t result in a corresponding improvement in rental income.”

Expenditure needs to be carefully targeted at small scale improvements which do increase rent, such as energy efficiency and improved facilities.

many Ways to save One thing for estates to think about is outsourcing repairs and maintenance on properties. In-house maintenance staff are an expensive luxury if they are spending time idle, or are being found non-essential work to keep them busy.

On Savills managed estates nationwide, 30 per cent of repair work is now carried out by outside contractors whose services can be called upon only when required. Reducing staff can also free up cottages that can then be let. There are great savings to be made by pooling together resources with other estates. The skills of building teams can be coordinated in order to make the most of specialisms. The 6,700 acre Benacre Estate in Suffolk recently came together with several tenants to create an internal irrigation network with three reservoirs. Costs can also be cut by getting together with other estates and farms in order to purchase fuel, fertilizer and other goods; a model employed by farmers in East Anglia.

Insurance costs have increased in recent years, but you do not have to be caught out by rising premiums. Estates can cut costs by rationalising what they do and do not insure. “Estates can think about reducing

their insurance premiums by not insuring absolutely everything and by accepting a greater excess on their policy,” says Michael Horton, who heads Savills estate management operation in England. Tax-efficiency should be a priority for estates at a time when the Government is under huge pressure to raise its tax-take. Taxes are likely to rise whoever wins the election, and already the taxman has started to show much more interest in rural businesses, such as shoots, to ensure that tax is being paid. Those who keep their books in order will avoid fines.

The conversion, where possible, of successive farm tenancies into farm business tenancies presents one opportunity to increase income. Where a successive farm tenancy in the South of England typically raises £60 to £70 an acre, a short-term farm business tenancy should raise £90 an acre.

seize the chanceWhile the emphasis for most businesses during recession is to cut costs and improve margins, there are also opportunities. One thing for estates to consider is the possibility of bringing redundant farm buildings into alternative uses by accessing grants. Under the Scottish Rural Development programme, for example, grants of up to 70 per cent are available for such repairs to steadings and stables. The Government’s drive to provide more affordable housing has offered estates in England an opportunity to increase the value of land which would otherwise be out of bounds to residential development. It is possible to gain permission to build affordable homes on so-called ‘rural exception sites’. There is unlikely to be a better time to invest in development land. Prices have fallen by 25 per cent since the top of the

market in 2007 as developers have been forced to cut back on building projects and to sell land in order to stay afloat. Banks are beginning to dispose of assets they have acquired from defaulting borrowers, giving estates with a lot of collateral the opportunity to pick up assets at even lower, distressed prices. Tourism remains a growing part of the rural economy, with great scope for estates. “Not all forms of tourism require large amounts of investment,” says Jonathan Dymock of the estate management team in Brechin. “The 1,600 acre Cambo estate in Fife, for example, attracts over 12,000 visitors for its snowdrop weekends alone.” The introduction of smart electricity meters and feed-in tariffs from April 1 has presented estates with a fresh opportunity to provide cheaper electricity for themselves and to sell surplus electricity to the national grid. This is an area which needs to be approached carefully. Not every green form of energy will prove

Contact: Jonathan Dymock01356 628 [email protected]

a conservative election victory: what would it mean for estates?Will there be less red tape under a new government?

With weeks to go until the last date before a general election, the Conservatives still seem likely to form the next government, albeit not with a huge majority. So what would a Tory government mean for rural estates?

Current proposals, which will be developed in the manifesto, are big on talk of cutting red tape, encouraging farming and strengthening local democracy. There is rather less substance, especially when it comes to farming.

The plan to offer MPs a free vote on whether to repeal the ban on hunting with dogs is bound to attract most attention. But perhaps the highlight is a

proposal to give small rural businesses an automatic right to relief on business rates. The Conservatives also plan to redesignate the site of old agricultural buildings as brownfield land. This should facilitate

the redevelopment of redundant farm buildings and put an end to local authorities demanding that buildings be allowed to crumble if no longer needed for agricultural purposes. There is a caveat, however: the proposals state that the

redesignation will only apply to buildings ‘erected before a specified date’, without specifying what that date should be.

There are also plans to use money unused in the BBC’s current digital

switchover to improve rural broadband networks.

As for farming, the Conservatives have said that they want to encourage local food production, but so far they have failed to say how they are going to do this. “Taxes are likely to rise

irrespective of who wins the election, and already the taxman has started to show much more interest in rural businesses. Those who keep their books in order will avoid fines.”

“There are plans to use money unused in the BBC’s digital switchover to improve rural broadband networks.”

viable, but there are estates in Britain that are already investigating the possibility of setting up anaerobic digestion plants. In addition, barns and grain stores offer vast roof areas that may be ideal for photovoltaic tiles, devices which generate electricity directly from sunlight.

clever measures One potential opportunity that estate owners should be considering is environmental credits. At present, these have only been mooted as a policy, but in parts of the US they already exist and have helped farmers earn significant sums.

The concept is this: a house builder, in return for developing a green field

Top: The concept of Environmental Credits could see farmers’ hard work being rewarded financially as well as benefitting the local countryside.

Below: Grants of up to 70 per cent are available for repairs to steadings and stables, under the Scottish Rural Development programme.

Contact: Michael Horton01473 234 [email protected]

Contact: Ian Bailey01797 230 156 [email protected]

for a housing estate, will be required to buy a credit towards environmental improvements, elsewhere. This might be the planting of a wood or the establishment of a wetland nature reserve on existing farmland. In Minnesota, for example, farmers have been able to earn between $4,000 and $35,000 per acre for establishing wetlands, the bill being paid by transportation projects that have developed greenfield land nearby. With an election looming estates should be closely analysing manifestos for possibilities such as environmental credits, as well as for clues as to the legislative and fiscal environment in which rural businesses will be operating over the next few years. Whichever party wins, it is safe to assume that we will be living in straitened times for several years. ❖Five ways

to cut costs

1 Outsource repairs and maintenance on your property.

2 Pool together your resources with other estates.

3 Know the ins and outs of tax and be tax-efficient.

4 Maximise the potential of redundant buildings through

conversion.

5 Consider savings by greater self insurance.


Aspects of Land | Food security


EU policy caps subsidy for the higher level recipients, presumably because they are considered more profitable. It is worth remembering that currently these effects are not felt in the UK because of the higher national modulation.

It would be just as logical to propose that farms with the highest yields, or those that can support the most stock or have diversified, require least subsidy. Other countries have adopted measures contained in the ‘Health Check Reform’ that permits the redistribution of payments. France is not alone in taxing the arable sector to support the livestock sector on poorer quality land for environmental and social reasons.

The argument for subsidy is not just about food production. I suggest that justification is now (as it was in the

past for most sectors) almost entirely for social reasons tied to maintaining a rural population: in other words, more cultural than agricultural support. This may be legitimate social policy, if not economically sound. Maintenance of biodiversity, the environment and reduction in greenhouse gas emissions are all valid objectives and play a major part in making the social justification acceptable.

pre-reform predictions So what will happen in the imminent CAP reform? We now have a new Agricultural Commissioner, the Romanian Dacian Ciolos. He has spent considerable time in France and is expected by many to support the conservative French position. While clearly an astute political operator, he does not yet know his way around the complex operations of the political systems in Brussels, made more complex since the last reform by the increased power of the EU Parliament. It is probable that the next reform will be relatively soft, building on policies introduced during the health check and mid-term reform.

Budget constraints will play a major part in the inevitable political horse trading in the run up to the reforms. Pressure on the EU budget and the requirement of the new Member States to reduce disparities in direct payment levels

Death, taxes and CAP reform are some of life’s certainties. However, it is nearly as hard to predict the content of the next

Common Agricultural Policy (CAP) reform as it is death. Reform is inevitable, but the detail is uncertain.

The current subsidy system is based on national or individual farm activity between 2000 and 2002. By the next CAP reform in 2013, direct farm subsidies will be supporting a system more than 10 years old. Subsidy payments are now completely or largely decoupled from

are likely to lower the value of the subsidy payments. The disparity between the farmers in Latvia receiving payments of €88 per hectare compared to France and Greece receiving €500 per hectare makes some form of equalisation inevitable.

I strongly believe that subsidy payments to farmers will continue after 2013 because they are seen as important by the vast majority of Member States. They are, however, likely to be targeted at environmental gain and support to the rural economy and may include a more progressive modulation.

It is also clear that the new Member States are expecting a fairer share of the budget, but none of the EU economies are in a position to supply more money for agriculture, making redirection from west to east the only option. Devising a policy to deal with market crises, without distorting production and increasing the effectiveness of the rural development measures, will add to the complexity.

Ultimately the plea is always for a level playing field. In reality, people are seeking a playing field tilted in their favour. ❖

Contact: Keith Preston01865 269 170 [email protected]

Above: The requirement of the Member States to reduce disparities are likely to lower the value of subsidy payments.

production, making it difficult to justify payments based on current, let alone historic, production.

The choice of objectives behind the subsidy is crucial to the direction of future reform. Food security is firmly back on the political agenda, but how higher production levels are reconciled with the wider environment is likely to take up many hours of debate.

benefits of coupling There are opposing views on payment coupling. Financially, a farmer is better off with a fully decoupled payment because

Looking for a level playing field

With the next round of changes scheduled for 2013, CAP reform is back on the political agenda. Keith Preston attempts to make sense of it all

he has the flexibility to choose whether or not to farm. For the rural community a coupled payment is preferable as the farmer is tied to the farm to rear stock or grow crops, the feed and seed salesmen have jobs, and so the rural community is sustained. This is more relevant to upland areas, which tend to be reliant on subsidy for farm survival and maintaining rural population, than lowland areas.

The wider benefit of payment coupling is that environmental diversity of the moorland areas is improved by grazing, but not the over-grazing that is encouraged by headage payments.

on the record

“My hope is that we can have a debate with civil society about the broader benefits of our agriculture policy – and open minds about what we can do in future.”

Dacian Ciolos,

EU Agriculture Commissioner

“In the end we do need a strong agricultural policy that is sensible. I am a strong advocate in supporting farmers to deliver the benefits which the markets cannot afford. That is the argument for Pillar 2.”

Hilary Benn, Secretary of State for Environment, Food & Rural Affairs

“Farmers want a straightforward CAP that helps them deal with market fluctuations and rewards them for their efforts in delivering the valuable products society wants.”

Peter Kendall, NFU President

Strong opinion is a certainty in the CAP reform debate…

Aspects of Land | CAP reform 2013

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Aspects of Land | The benefits of mediation


T raditionally, the way to resolve a dispute is to go to arbitration, involving the County Court, the High Court or some other form of tribunal.

Taking legal action in this way requires both of the parties to argue their cases in front of a judge, who then decides the

outcome. The process is often drawn-out, expensive and inevitably one party always has to lose. Often neither party gains a satisfactory outcome.

Clive Beer, Head of Savills Rural Professional Services, explains why an alternative method – mediation – is now increasingly favoured as a more satisfactory means of dispute resolution.

Reaching agreement

animosity. Of course, because one of the two disputants must win, 50 per cent of disputants lose their cases. The other 50 per cent might be able to reclaim only two thirds of the costs after maybe years of anxiety and uncertainty, during which time their business might have to be put on hold. The litigants become mired in negativity, to the detriment of their financial and business interests, not to mention their health.

Moreover, litigation means relinquishing control: the outcome is handed to a third party, the judge, whose impartiality cannot be guaranteed. I have seen judges take against a party, bring in extraneous issues and make moral judgements. I’ve seen strong cases with cast-iron evidence lose, and weak cases with flimsy evidence win.

I cannot think of a situation where the courts are the best setting for solving a dispute in the first instance.

So where does mediation fit in?CB: Mediation involves the two parties agreeing to meet in order to attempt to reach a settlement without recourse

Contact: Clive Beer 01952 239 [email protected]

to litigation, with the help of a jointly instructed mediator. This is a growing area of practice when solving disputes, not only for lawyers but also for Savills.

The courts now expect parties to have attempted mediation prior to a hearing. Refusal to mediate can affect the final cost award handed down by the judge quite significantly. If one disputant refuses to mediate and goes on to win his case in court, the losing party can point out that mediation was offered and the judge can refuse to award costs to the victor. This threat is a major influence on the increasing numbers seeking mediation.

How does mediation work? CB: The disputants and the solicitors or barristers representing them gather together with an independent mediator. The disputants set out their cases to each other with the mediator in an open forum, the disputants then move into separate rooms. The mediator shuttles between these rooms, acting as a go-between to facilitate a resolution and encouraging the parties to make an offer to settle. As he or she talks privately to each party, subtle diplomacy becomes vital.

When the parties are close to settling, a settlement agreement is drafted and agreed. Once it is signed, the dispute is resolved and the parties can move on to a more productive use of their energies.

What is the mediator’s role?CB: The mediator’s role involves providing a focus and a direction, and testing reality: the relationship between the solicitor and his client; the extent to which personal animosity, misguided assumptions or sheer stubbornness is barring the way to a perfectly acceptable solution; or the reasonableness of the issue at stake. Sometimes the solution to the dispute is blindingly obvious. It usually

Neighbourly goodwill Allocating fair blame preserves the peace

Mr Scurlock-Jones’s house was damaged by a fallen tree, which his neighbour, Ms Birch, said would be safe. He felt justified in seeking compensation and wrote a ‘pre-action’ letter to Ms Birch. As a result, both parties agreed to attempt mediation before litigating.

Ms Birch asked her tree surgeon to attend, since

she believed that he was to blame for the damage.

In private, but with the mediator, each party laid their respective cards on the table and agreed a settlement whereby

Ms Birch and the tree surgeon both contributed to compensation for Mr Scurlock-Jones, which, although significantly less than Mr Scurlock-Jones’s original claim, satisfied him.

“In private, but with the mediator, each party laid their respective cards on the table and agreed a settlement.”

involves compromise, which is often far easier to achieve in the non-adversarial situation that mediation creates.

This to-ing and fro-ing between parties can take a long time. I once mediated in a family farming partnership dispute in the Midlands that had lasted for 22 years. The mediation started at 9am and finished at 1.30am the following morning: it was a long day, but in less than 17 hours we resolved 22 years of angst and animosity.

The mediator cannot suggest a settlement – that would mean judging a case, rather than facilitating it – but he or she can bring a genuinely independent, unbiased perspective. A good mediator must be resilient, calm, fair-minded and a superlative communicator, with an understanding of the legal process. He or she can then apply these skills to any scenario, from property, tax and contractual issues to clinical negligence cases and divorce.

What are the advantages of mediation?CB: Mediation has a very high success rate of 85 to 90 per cent. It allows parties to retain control of the settlement because they both have to agree to it, rather than having a judgement imposed on them.

Since the process involves fewer people, mediation is usually quicker, cheaper and more predictable than litigation. Perhaps the most important advantage for the individuals involved is that mediation avoids the considerable stress of a slow court process. As soon as it’s over, both parties can move on to a more positive focus for their energies, with any feelings of resentment and injustice minimised. ❖

Exactly what is involved when a dispute is taken to court?CB: Each party must instruct a solicitor, who will also engage a barrister and usually an expert witness as well to support the evidence. Obviously fees can mount up quickly.

The case can be argued for days, prolonging and stoking stress and

Taking a dispute to court can be extremely expensive and stressful, which is why more parties are turning to

mediation to settle their affairs Words: Oliver Tims

Opposite: Settling through mediaton allows both parties to retain control of the settlement, rather than having it imposed by a judge.

“The solution usually involves compromise, which is far easier to achieve in the non-adversarial situation that mediation creates.”

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Aspects of Land | UK farmland market

When forecasting the future it’s necessary to take note of the past. With the help of the newly established Farmland

Value Model we look forward to the performance of the UK farmland market in 2010 Words: Oliver TimsFarmland’s

fertile future

Savills | Aspects of Land 13

Farmland’s future is fertile, according to the Agricultural Land Market Survey. The research report forecasts continued strong demand for farmland and healthy

growth in prices, perhaps reaching £10,000 per acre for the best land in the next five years. And these predictions are about as reliable as you can get, because they are compiled using the combined experience of more than 35 agents countrywide and a new forecasting model developed by Savills Rural Research department that is the most comprehensive to date.

This new research model – the Farmland Value Model (FVM) – analyses influences on farm income and land values. From subsidies and commodity prices to exchange rates and population density, it collates over three decades worth of historical data to provide the best statistical basis for Savills forecasting. The result is a detailed overview of how farmland values have performed over the past 35 years and how they might develop in future years.

Savills research shows the resilience of farmland values. Over the past decade,

average values have risen by 134 per cent, the fourth-fastest 10 year growth since 1800. And last year the average value for all types of farmland across Great Britain rose to £4,450 per acre, an increase of 5.9 per cent. This took prices almost to the level seen before values fell in the second half of 2008 and the first quarter of 2009 – a remarkable resurgence, and in line with the forecast of last year’s survey.

arable land salesRecently, farmland has performed better than many other assets and remains an attractive long-term investment (see Graph 1). According to the analysis, Grade 3 arable land showed the biggest increase in value during 2009, rising by an average of 7.2 per cent in England and 3.8 per cent in Scotland. Some areas significantly exceeded this, however. In Eastern England, prime quality arable land rose by 12.5 per cent to £5,800 per acre. Individual transactions set new levels. Well-placed bare land in Dorset and Wiltshire, for example, fetched over £6,000 per acre, while commercial farms in East Anglia and Lincolnshire reached £9,000 per acre.

Scotland was also varied, according to Anna Thomas of the Savills Farm and Estate Agency team in Edinburgh. “It has been a tale of two markets,” she says. “Stock farms in the West did not sell well last year

Opposite: Farmland remains an attractive proposition to buyers as its performance continues to shine through good times and bad.

Graph 1Rural assets remain resilient

Source: IPD / Savills Research (some 2009 data est.)

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Farming top 25% Commercial – all

Forestry Equities

Graph 2Proportion of farm buyers 2009

Source: Savills Research

Farmer

New ‘lifestyle’ buyer

Existing private landowner

Corporate / Institutional

and I anticipate a readjustment of their value in 2010. Prime arable farmland on the East coast, however, sold well. Its value rose by nine per cent, to £5,400 per acre.”

These increases were underpinned by demand among farmers. The proportion of farmer purchasers has continued to expand as the recession lessened the number of non-farming ‘lifestyle’ buyers, who increased their share of the market in the early 2000s. In 2009, farmers accounted for 61 per cent of purchasers (see Graph 2), up from 53 per cent in 2008.

“There is still plenty of appetite for the right farm or estate, and finance available for buying,” says Alex Lawson of Savills Farms and Estates Department in London. “Across England we’ve seen greater interest in complete commercial farms of around 1,000 acres, than in smaller properties.”

Ian Bailey, Head of Savills Rural Research agrees. “2009 was a commercial, rather than an amenity, farm market. Some potential lifestyle buyers lost their bonuses while large-scale farmers remained buoyant,” he says.

New lifestyle buyers accounted for 21 per cent of the market, down from 23 per cent in 2008, while corporate and institutional buyers slumped to four per cent of all farm purchases, compared with 10 per cent in each of the preceding four years. Nevertheless, some areas are

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12 Savills | Aspects of Land

Aspects of Land | UK farmland market


still attracting plenty of lifestyle interest. Alex Lawson points out that counties such as Hampshire, Oxfordshire and Gloucestershire will always see demand from commercial and residential buyers: “Farm values fell less than residential and commercial property values and have recovered more strongly. Some are back up to their peak of three years ago.”

Not surprisingly, given the strength of farmer buyers, investment as the primary motive for buying dropped from 30 per cent of sales in 2008 to 15 per cent in 2009, similar to the levels recorded over the previous five years. The principal motivation for buying was expansion by existing farmers, accounting for 43 per cent of transactions in 2009 compared with 32 per cent in 2008.

less demand from abroadIn 2009 there was a decrease in the number of overseas buyers and they accounted for only five per cent of purchases. This dwindling has affected the market in the west of Scotland, where stock farms account for most of the land offered for sale.

“Scotland has been affected by the dearth of Irish buyers in particular,” says Anna Thomas. “Sellers have been slow to adjust their expectations accordingly, resulting in unsold farms. During 2009, over 100 farms of more than 50 acres were advertised for sale in Scotland. Almost half of these have not sold, mostly stock farms on the West and South West coasts. There is nothing to suggest that anyone is set to fill the void left by Irish buyers, so if these farms are to sell in 2010 there will have to be price reductions.” Still, if foreign buyers have shrunk demand in some areas, supply has also contracted, as shown in Graph 3. Farmland publicly marketed over 50 acres last year totalled 143,000 acres across Great

Britain, 26 per cent less than in 2008, when just 193,000 acres were offered for sale.

In England, supply fell by 25 per cent, from 143,000 in 2008 to almost 107,000 last year, while Scotland saw a contraction of 29 per cent, 27,500 acres marketed in 2009, down from 38,600 the year before. Only South East England avoided such restricted volume, but a fall of just four per cent in available land, was due to the marketing of the Tandridge and Chelsham Estates, totalling 3,221 acres.

Regionally, the greatest decrease in supply was in the East, where nearly 16,000 acres of marketed farmland represented a drop of 39 per cent, and in the South West, where volume fell by 47 per cent. This limited supply shows no sign of expanding this year. That said, Savills research suggests that the lack of land has not affacted values to the degree expected.


So who is selling, or rather, not selling? Analysis of Savills farm transactions in 2009 indicates that farmers accounted for just 47 per cent of all sellers, a similar proportion to that in 2008 but significantly lower than in 2006 and 2007, when they comprised around 60 per cent of sellers.

Lifestyle landowners dropped slightly to 38 per cent of sellers, while the proportion of corporate and institutional sellers increased to 15 per cent, up from nine per cent in 2008 – not surprising, perhaps, as the recession hit.

Similarly unsurprising is the rise of debt as a motive for selling in 2009. Low interest rates notwithstanding, debt was cited in 10 per cent of all sales, compared with seven per cent in 2008. Debt-driven sales were not confined to farming businesses: some non-farming landowners used last year’s increased values to raise capital for recession-hit, non-farming businesses.

Selling to invest capital elsewhere was cited in just 27 per cent of sales however, compared with 33 per cent in 2008. Savills is therefore confident that farmland remains one of the safest of all investment assets and expects interest in farmland to continue, especially since feeding the UK’s population has risen up the political agenda and commodity prices look set to remain healthy, if increasingly volatile.

Contact: Ian Bailey01797 230 156 [email protected]

The financial viewOpportunity knocks in the farmland money market

The 2009 farmland market was characterised by a coincidence, according to Mark Ashbridge of Savills Agricultural Finance: the short-term cost of money dropped below the income yield generated from farming assets.

“Agriculture has historically provided an income return of between two and four per cent, usually nearer two per cent,” he says, “while money has, on a long-term average, cost around seven per cent. The gap between the rates makes purchases of land hard to justify in a trading sense and without the benefit of capital growth.

“However, since interest rates plummetted last year, the cost of borrowing is on a par with or below the yield. And because farmland has been resilient

during the recession, rising an average of 5.9 per cent in value last year in comparison with falls of about 20 per cent for residential property and 40 per cent for commercial property, lenders are

keen to lend against it on favourable terms. It also diversifies the portfolios of lenders who may have suffered over-exposure to the residential and commercial markets.”

This tally of yield and the cost of borrowing may be short-lived, since interest rates are bound to increase to more normal levels. Yet it represents a rare opportunity for farmers

to expand or invest in their holdings in the short term, and with five year fixed rates at around five per cent they could extend the era of cheap money for a few years at least.

Now could be the

time to review shelved diversification projects, which could not justify the financing costs of the past.

“Because farmland has been resilient during the recession… lenders are keen to lend against it on favourable terms.”


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Average GB (all types) Model results

Model results:2010: 6.3%2011: 6.0%2012: 5.7%2013: 5.8%2014: 5.3%2015: 4.9%

What is it?The Farmland Value Model (FVM) is a new tool for assessing and forecasting the farmland market in England and Scotland, developed by the Rural Research department. It provides a reliable statistical baseline for predicting future markets.

How does it work?The Rural Research team has analysed all the factors that influence farm values – about 20 in all, including wheat prices, GDP, exchange rates, oil and gold prices, and population density. The correlation between these factors over the past 35 years was examined, then the data was subjected to multiple regression analysis to establish a broad statistical basis with which to compare components of the current market, measure recent growth, and look to the future.

What makes the Savills model different to other methods?A range of factors. Incorporating 35 years of historic data ensures that FVM data reflects actual land values. The model also draws on statistics dating back to 1800 to establish a thorough understanding of growth patterns and the impact of external factors on farmland values. This use of valuable historical data makes Savills research the most comprehensive available.

How can it benefit Savills clients?Successful planning and the maximising of yields require the most reliable information possible. The FVM gives landowners the confidence of knowing that their business decisions are informed by the most robust facts and analysis. Savills hopes to adapt the model so it can be applied to regional markets and other sectors, such as the country house market, thus benefiting an even wider range of clients.

Graph 3Regional supply

Graph 4Average values – future growth

The FVM predicts values to increase by five to six per cent per year until 2015 (Graph 4), with the average value of Grade 3 arable land reaching £7,000 per acre in England and more than £5,000 per acre in Scotland. At that rate, the best land could be averaging £10,000 per acre before then. Growth rates will, however, vary. Issues such as farm type and location, variations in the prime country house market, together with supply and demand will affect regional values.

Savills research suggests the market is far from saturated. In England, the market could bear over 130,000 acres per year without values being affected, while Scotland could comfortably cope with double the 27,000 acres that were marketed last year. Nevertheless, Savills anticipates the supply of land will remain limited. The main reason being there are few reasons for landowners to sell, apart from the perennial three Ds – death, debt and divorce – and a new one, downsizing. Debt is likely to be the principal cause of any significant increase in supply, yet even this is expected to remain negligible.

A positive scenario then, and one which is predicated on solid historical data, thanks to the Farmland Value Model. It seems that when it comes to looking to the future, it pays to keep an eye on the past. ❖

farmland Value modelIntroducing Savills bespoke research method

Top: The supply of farmland marketed in England decreased in 2009; though gems such as the Tanbridge Estate were marketed. Above: Close to Edinburgh, South Dundonald is a prime example of a Scottish arable unit.

Contact: Anna Thomas0131 247 3704 [email protected]

Contact: Alex Lawson020 7409 8882 [email protected]

Contact: Mark Ashbridge07968 553 352 [email protected]


Aspects of Land | Grant funding

The Rural Development Programme has awarded a significant grant to a dairy farm in Cornwall; we discover how the beneficiary secured the funding Words: Suzie Horne

Permission granted


T he South West Regional Development Agency has awarded its largest grant ever to expand a farm-based milk processor near Lostwithiel,

Cornwall. The funding of £5.7 million from the Rural Development Programme for England will enable Trewithen Dairy, at Greymare Farm, to increase its capacity from 25 million litres of milk to 44 million litres a year over the next four years. The project, which is due to start in May, will create 40 new jobs, taking the number of employees to 120, thus increasing

production capacity for fresh milk, clotted cream and buttermilk. As well as providing a larger processing area, improved infrastructure, new offices and staff facilities, the grant will also fund staff training and gives opportunity for a new role of Farm Liaison Manager to build relationships with suppliers.

In addition to the creation of new jobs, the application was successful because it will bring wider benefits to the Cornish economy. It adds value to raw milk, with benefits to local customers and retailers. For now, the dairy buys milk from 17 farms but this will increase significantly –

Above: Dairy owner Bill Clarke and herd. Opposite: Nick Buckland, SWRDA board member, toasts Rachel and Bill Clarke and their son Francis.

although any current supplier farms that are increasing their production will take priority under the expansion plan.

Cornish food processors, independents and corner shops will continue to be core to the business. Trewithen supplies 12 ASDA stores with milk throughout the four counties of the South West.

DetermineD ApplicAtionManaging Director Bill Clarke cautions that putting together an application of this type absorbs a huge amount of time, effort and money. The costs in preparing the application including planning fees,

business planning, engineers, architects, designers, accountancy, and consultancy fees represent roughly five per cent of the grant award, which is fairly typical.

“We have based everything on realistic, conservative sales ambitions. Our plan is rigorously sales driven in far more ways than people could imagine. It’s a very substantial part of the business plan. I have to have confidence in the figures too.”

The expansion plan for Trewithen Dairy is far more ambitious than the business would be able to manage without grant aid, so there was a financial risk in applying. Preparation of the application began in June 2008 and the award was announced in January this year.

Mr Clarke recommends, for others considering an RDPE grant, to make the best use of free advice. “We had great support from David Rodda and his team at Cornwall Enterprise and we leant on them relentlessly, they were extremely valuable to us. The RDPE and the South West RDA worked hard to help us too, but in a different way.

“The choice of Ashley Lilley at Savills as an advisor, to help prepare the business plan and grant application, was down to personality, professionalism and the fact that the firm is large enough to have a pool of specialists on which the project could draw,” says Mr Clarke. ❖

Applying for rDpe fundingCollaboration is at the heart of securing an RDPE grant

Now is a good time to apply for the Rural Development Plan for England (RDPE), if you have a business plan that satisfies the objectives of the scheme.

England, Wales and Scotland each have separate plans for supporting agriculture and the environment. These run from 2007-2013 with a combined budget of almost £6.5 billion. Most of the support falls under what is known as Axis 2, which is for agri-environment and land management schemes focussing on biodiversity, landscape, access, water quality and climate change. This includes energy crops, woodland and the Higher Level Scheme.

Projects that improve both competitiveness and sustainability in agriculture and forestry, as well as enhancing rural opportunity, can qualify for some of the £600 million that is earmarked under Axes 1 and 3. Farm-based

diversification projects typically attract 30-50 per cent grant under this part of the RDPE.

“Projects have to compete for funds and there are certain key aspects that need to be present in the application,” comments Ashley Lilley of Savills Agribusiness. “These include factors such as adding value, job creation or preservation, improving or maintaining social cohesion, improving the skills of the rural workforce, collaboration (where possible), and renewable energy.

“Collaboration is a key theme of the RDPE but, where direct collaboration is not possible, then delivering benefits to other local producers is definitely a positive thing.

“Each Regional Development Agency (RDA) takes a slightly different approach. It is important to understand how the various schemes in your region works to make contact with the

appropriate people.” Ashley suggests that Regional Development Agency websites are a good starting point but that the RDP rural sections can take a bit of finding. In the first instance, go to www.englandrdas.com.

Aside from the RDPE, there are other schemes, which may be available nationally or locally. These include the Bio-energy Capital Grants Scheme (England) which promotes the efficient use of biomass for energy, by funding equipment for biomass-fuelled heat and biomass-combined heat and power projects. Similar schemes are available or currently being developed for Scotland, Wales and Northern Ireland.

“Our business plan is rigorously sales driven in far more ways

than people imagine.”

Contact: Ashley Lilley01242 548 [email protected]

Five top tips for obtaining grant funding…

1 Draw up a timeline, with key target dates for proposed project.

2 Make contact with your RDA and use other sources of information

or help.

3 Undertake a feasibility study and speak to your bank about funding

if required.

4 Ensure you check planning and other statutory requirements.

5 Funding is competitive so make sure you develop and submit a

robust business plan.

Aspects of Land | Food production


that are very real in an economy like Britain. If these issues are ignored, or if resolution is not found, we could become disadvantaged trading in a global market.

We must assume that trade barriers will continue to be abolished and that international competition will intensify. In Britain we have the most sophisticated consumer market in the world and the required standards of production need to be acknowledged and recognised within a global trading agreement.

Compared with some trading blocks in the world, such as the US, we are not a big player, but historically we have played an important role in international negotiations. We should not underestimate the influence the UK can assert. We have punched above our weight in the past and we still can.

How do you see the Food 2030 strategy making UK agriculture more sustainable and less reliant on subsidy?DC: Total Income from Farming (TIFF) illustrates that we are failing to generate more profit than the level of support we receive. We have made progress since the 2003 reforms when support was decoupled from production. As an industry we are adding more value to the commodities we produce.

We have expanded the production of local and regional food, and we also have diversified into other income streams. More than 50 per cent of UK farmers now have an alternative income from diversified activity and, if it were not for the slump in commodity prices last year, we would be in a better, much stronger position now.

We have embraced a significant change over the past 10 years. I think the foundations have been laid for an optimistic future. The challenge for farm businesses is to continue to explore opportunities to develop our businesses and set ourselves challenges to generate

“We should not underestimate the influence the UK can assert. We have punched above our weight in the past and still can.”

significant income, so that we become less dependent on government support.

This does not mean that we should assume we won’t receive support in the future, because the role farmers play in managing the countryside is of an enormous public benefit. To receive public support for that benefit is a legitimate use of public funds.

There is a debate that needs to take place, however, as to the definition of public goods and whether having a secure supply of food into the future is a public good. We need to ensure that farmers are given encouragement to compete in the global food market.

In my view, this does not mean going back to the old-fashioned subsidy system, but it may mean the Government providing financial support to ensure that we have the infrastructure in place, processing capacity and distribution networks to allow and encourage markets to expand.

Regarding greenhouse gas reduction, should the emphasis be on production or on recycling?DC: It needs to be both. We need to find smarter ways of using our inputs, whether nitrates, phosphates or feed for animals in the production of methane.

We also need to invest in science and find lower input methods of production, improve the efficiency of feed through new varieties, and research into better genetics and feed conversion.

We could improve our greenhouse gases emissions by concentrating on better management and through investment in research and development. We also need to recycle and reduce or manage our waste, such as through anaerobic digestion.

T he food and farming sector need to engage with government to get the best out of the future CAP review. We talk to Sir

Don Curry, the Government Advisor on Sustainable Food and Farming and Chair of the Better Regulation Executive, to find out what might be in store for the future of food and how achievable it will be.

What will the Government need to tackle in the next Common Agricultural Policy (CAP) reforms to ensure UK farmers remain profitable?DC: In terms of the next round of reforms negotiations, we need to seriously address the UK’s position on CAP reform within EU context. Whatever comes out of the election, we need to engage with the Government, because if we are not on the inside track of negotiations we will be disadvantaged.

It is essential that we try to achieve a common support system across Europe, including common levels of modulation. We have had no alternative than to opt for higher levels of modulation than our European partners because we were allocated a low level of Rural

What would be your highest research and development priorities? DC: First, we need to reassess priorities in light of climate change and projected global population increases. There is going to be tension on land use. We need to produce more food, more fibre, more fuel, and we also need to improve our environmental performance by reducing inputs and improving our biodiversity.

Secondly, we haven’t spent enough in recent years. The Government has acknowledged that fact and has agreed to spend more: another £50 million through the Technology Strategy Board (TSB) for applied research, with food security in mind.

How far do you think the objectives of Food 2030 can be met before a large amount of legislation is needed?DC:When considering a challenge such as how to retain the environmental benefits of set-aside, you have to ask what the desired outcomes are. Once agreed, the issues are to achieve those outcomes. The results of this type of process led to the Campaign for the Farmed Environment being launched.

Instead of looking to regulate as the only route forward, in many instances we could adopt alternative approaches, such as the voluntary initiative on set-aside. In an industry that takes its responsibilities seriously and is presenting itself as professional and responsible, we could find voluntary approaches that reduce our regulatory burden.

I think farming, in political terms, has not been in a better place than it has been during my lifetime. It used to be said that farmers were only considered to be important during a war when the country was short of food.

However, with all the pressures we now face, climate change, food security, farming is now no longer seen by politicians as a problem, but a hugely important national asset. So politically, agriculture is being taken very seriously once again which is good news.

Contact: Andrew Wraith01522 508 973 [email protected]

Opposite: Local food production has expanded Above: More research is needed to improve the efficiency of animal feed.

Development Funding in the Agenda 2000 settlement. This must be addressed so that we can achieve a level playing field regarding support for rural development, and move to a position of a common level of modulation within the EU.

We need to achieve a united view in the farm and food sector in order to lobby the Government together. If we don’t, the Treasury’s view will prevail. After the election, public spending in Britain is going to be under severe pressure and the Treasury will be looking to reduce our commitment to EU funding. That could have quite serious consequences for the farming sector within negotiations.

How can a UK government influence global food production and what difficulties might the World Trade Organization (WTO) free trade negotiations present?DC: I think it is regrettable that World Trade talks have floundered so far. We need a set of global trading rules which recognises non-trade issues such as: animal welfare standards; higher food safety standards; and the legislative standards that we operate in Britain, and addresses consumer concerns

The future of food & farming

Andrew Wraith, of Savills agribusiness team, asks Sir Don Curry some key questions on the way forward for food production

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With the need to maximise all revenue streams at their disposal, mineral extraction is a rewarding

opportunity that is often overlooked by landowners

Digging deep

There is still much demand from the construction industry for sand and gravel. This is the mineral that landowners are

most likely to own and should be looking to exploit. Our clients come to us after uncovering evidence of deposits on their land, or having been approached by an aggregates company (‘the operator’). We guide them through the entire process, from initial geological survey through extraction to final land restoration, taking in planning, lease negotiation, site-management, strategic tax advice and waste management along the way.

Mineral extraction can be lucrative: a typical sand and gravel reserve might comprise 20,000 tonnes per acre; depending on location and quality, this could easily translate into an income of up to £50,000 per acre over the life of the operation. Then there is the chance to enhance an estate’s landscape and increase its biodiversity through restoration once extraction has ceased.

LAND RESTORATIONEvery county council is obliged to produce a list of prospective sites for mineral extraction to ensure supplies for the next seven years. Every five years the council considers sites to add to the land bank; if a site is allocated, there is a presumption in favour of planning permission being granted. Inclusion in the land bank is therefore an essential first step.

Once the quality and quantity of a mineral deposit has been proven, we negotiate an option and lease on the behalf of the landowner, encompassing everything from the period of extraction to the royalties payable by the operator. We also ensure that the lease properly protects the landowner’s interests and that the restoration proposals are suitable and sustainable for the type of land and local environmental circumstances.

Land restoration and after-use play a significant part in selling the proposal to the county council, so expert advice is essential to ensure the legacy of mineral extraction is beneficial to the landowner,

the community and local wildlife. This might include creating a new lake or reservoir, reinstating wetlands or replanting woodland, depending on the environmental needs of the area.

In many cases, we can manage the operator’s occupancy to ensure compliance with the terms of the lease, including prompt and accurate collection of any rent and royalty payments. If the operator wishes to extend operations, we will oversee negotiations and encourage the operator to maximise the value of the asset to the financial benefit of both parties.

This ability to work with both the landowner and the operator can be the

Above: The Savills team negotiates closely with the operator to ensure that the lease properly protects the landowner.

key to a smooth and successful enterprise. Mineral extraction relies on a positive partnership between landowner and operator; the Savills team is well-placed to facilitate development and address the concerns of landowners; especially if they are nervous of letting operators onto their estates.

Mineral extraction is a fact of life: aggregates are essential raw materials for the built environment, but they must be worked were they are found. Managing this process for landowners and ensuring its legacy is beneficial makes the process easier for all concerned, and that’s where an expert team makes a real difference. ❖

Aspects of Land | Mineral extraction

“Mineral extraction can be lucrative: a sand and gravel reserve can easily translate into an income of £50,000 per acre.”

Contact: Martin Ott01245 269 [email protected]

The intricacies of IHT relief on mixed estates exemplifies the crucial role tax planning plays in the running of a rural business

Passing the test

The scope of Agricultural Property Relief (APR) from Inheritance Tax (IHT) has been reduced by a number of

cases, most notably perhaps Antrobus 1 & 2. The way in which the courts have been interpreting the scope of Business Property Relief (BPR) has recently been more helpful as far as mixed estates are concerned.

There are several relevant BPR cases including Farmer, Nelson Dance and the 4th Earl of Balfour. Out of these cases have emerged some very important precedents.

In Nelson Dance it was decided BPR was available on the transfer of the value even where the property itself is not transferred. This went against the view that the property had to be transferred in order to attract BPR and it gives considerably more flexibility in tax planning.

TAx pLANNINg AvENuESIn Balfour, the court further developed a series of tests that were used in Farmer. In this case, the property on which BPR was being claimed, consisted of a mixed 1,900-acre estate in Scotland with two in-hand farms, three let farms, 26 houses/cottages (let mainly on ASTs) two commercial

premises, woodland/forestry and sporting. The court carefully considered whether the estate had been run as a single business and, if so, whether it consisted “wholly or mainly of the holding or making of investments”, which would have ruled out BPR if it had. The court looked to see where the preponderance of business activity lay and in doing so examined a series of relevant factors including turnover, profit, expenditure and time spent by everyone in the various activities. This extract from what the judge in Balfour said is particularly enlightening:

“My impression is that the management of a landed estate, such as Whittingehame Estate where a significant amount of income is derived from letting income, is overall mainly a trading activity. That is where the preponderance of activity and effort lies.”

Not every estate will pass these tests by any means and the Inland Revenue is appealing. Nevertheless the decision does open some potentially very useful tax planning avenues, which should be considered in many cases. Here are some steps to consider which might enhance the BPR case for your estate:

n Have a single management structure and accounts

n Don’t segregate management of different activities

n Involve staff across all aspects of the estate

n Have a ‘whole estate’ management plan and review it regularly

n Look for residential tenants with long term value to the estate

n Rebalance business sectors n Remove assets that are surplus

to trading requirements n Transfer assets that are obviously

investments into a separate trust

We have the practical experience and skills to help you achieve the optimum overall tax position for your estate and if you think that you might need some help in developing and implementing some of the ideas set out in this article please do get in touch. ❖

Contact: Michael Townsend01392 455 [email protected]

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Aspects of Land | News round-up

22 Savills I Aspects of Land

Savills is deeply involved in the rural community at every level, here is

a round-up of our recent news

Rural matters

Savills I Aspects of Land 23

Above: Rural specialists Charlie Gooch and Tommy Cooper are set to bolster the Property Management

Recruitment team.

Carbon auditing was revolutionised with CALM (Carbon Accounting for Land Managers), the online carbon calculator developed by Savills in partnership with the CLA, launched

two years ago. Now Savills, in partnership with the CLA and Natural England, is enhancing CALM’s capabilities.

An updated version has been developed that will enable land managers to assess the contribution of their Environmental Stewardship agreements (such as ELS, HLS, OELS and the newly introduced voluntary initiative, Campaign for the Farmed Environment) towards reducing their business’s carbon footprint.

In January a series of workshops gave landowners and farmers a preview of the upgraded calculator, before it will be made publicly available in the coming months.

“It is vital for agriculture to reduce its carbon emissions,” says Ian Bailey, Head of Savills Rural Research, “and this can’t happen unless farmers and landowners are aware of what those emission levels are. The enhanced CALM system will track the benefits of Environmental Stewardship agreements and other initiatives, and make it easier for farmers to include carbon emissions in all their business calculations and to understand practical ways of mitigating emissions. I am delighted that Savills is playing a major role in raising awareness of the need to reduce emissions and offering practical ways of measuring success in doing so.”

Savills is extending its Property Management Recruitment team with the recruitment of Tommy Cooper and Charlie Gooch. Tommy

was formerly Senior Partner of the land management company Smith-Woolley, which was acquired by Savills in 2004, while Charlie is a member of Savills Salisbury team.

Antony Lumby heads the Property Management Recruitment department, which specialises in

recruiting senior property managers. “Recruitment is an important extension of Savills rural business,” he says. “It enables us to offer a truly comprehensive range of services and resources.

“Our staff are not solely recruiters. They need to maintain their experience in order to understand the changing role of farm and land managers. Tommy and Charlie bring additional expertise to the team and will be of huge benefit to our clients.”

Britain’s most prestigious angling

award has been relaunched in a three-year partnership between Savills and the Tay Foundation. The Malloch Trophy, awarded annually between 1972 and 1999 for the largest salmon caught on the fly, languished in a locked cupboard for ten years until acquired last year by the Tay Foundation.

Now renamed the Savills Malloch Trophy, it regains its position at the centre of British fly-fishing with the aim of promoting voluntary catch and release programmes, and the conservation of large salmon in particular, on all Scottish rivers.

The Savills Malloch Trophy Committee, met on 10 December to consider this year’s contenders. The first winner is Sandy Walker of Fort William, who landed a 32lb salmon in the River Lochy in June. The sea-liced cock salmon was caught on a home-tied fly in the Tailrace pool of the tidal estuary beat of the Lochy.

Mr Walker’s name will be added to the list on the original trophy. He will receive a sculpture of a salmon, commissioned by Savills from the artist Patrick Mavros, and a £250 voucher from the House of Bruar.

Savills Director Roddy Willis said: “As the new sponsors of the Malloch Trophy, we are confident that the revival of this iconic competition will be a powerful means of promoting voluntary catch and release – the single most important contribution that individual salmon anglers can make to salmon conservation.”

The Royal Agricultural Benevolent Institution (RABI) was founded 150 years ago this year, and Savills will be helping it to celebrate this anniversary by sponsoring a series of events.

RABI is the national charity for farming, providing care and support for retired farmers and farm workers and their dependants. Its priorities therefore lie close to those of Savills, and the two organisations share similar roots, being founded within five years of each other (Savills in 1855, RABI in 1860) by Essex men – Savills was established by Alfred Savill from Chigwell, while RABI was formed in Essex by John Mechi.

“We are delighted to be supporting the RABI in its 150th year,” says Richard Binning of Savills. “Many of our clients

express a desire to support their farming colleagues and, with our shared concern for British farming and farmers, RABI and Savills make an ideal partnership. Like us, RABI is a venerable organisation that has adapted and modernised so as best to serve the sector.”

RABI’s anniversary celebrations include a Charity Race Day at Ludlow Racecourse (1 April); the British 10k London Run (11 July); the National Cream Tea Campaign (27 August–3 September); the RABI Anniversary Challenge at Sherborne Castle, Dorset (10,11,12 September); National RABI Welly Week (9–16 October); and a ball hosted at Belvoir Castle in October

For more information on RABI please visit: www.rabi.org.uk

Helping the young

W ith the median age of farmers rising, Savills is looking to

the future by helping young farmers improve their chances of becoming tenant farmers.

Tendering for a tenanted farm is one of the easiest ways a young person can enter the farming profession, as it does not require a significant capital outlay. However, young farmers who submit a tender can face competition from wealthier, more experienced farmers.

So Savills Clive Beer joined forces with the Tenant Farmers Association (TFA) and the National Federation of Young Farmers’ Clubs (NFYFC) to provide three training days, funded by DEFRA, for any member of the Young Farmers

Club who would like a chance to improve their tendering skills. The training provided both the landlord’s and the tenant’s perspective of the tendering process, showing them how to structure a tender document, as well as advising on conduct if selected for an interview.

The training is in addition to the business development competition, judged by representatives from the Tenant Farmers Association and Savills. Last year’s winners were Nicola Hamer and Jack Hopkins, both students at the Royal Agricultural College, Cirencester.

Above: George Dunn, TFA (left) and Clive Beer (right) present Jack Hopkins and Nicola Hamer with their awards.

R.A.B.I celebrates 150 years

Keeping CALM over carbon emissionsMalloch Trophy returns, with help from Savills

Introducing two new recruits

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Aspects of Land | News round-up

24 Savills I Aspects of Land Savills I Aspects of Land 25

Landowners should note that new regulations concerning private water supplies in

England came into force on January 1. The regulations are to ensure private supplies meet the same drinking-water standards as public supplies. The Private Water Supply Regulations 2009 replace the Private Water Supplies Regulations 1991. They introduce new standards for drinking-water quality and specify new monitoring and risk-assessment procedures.

Peter Start, of Savills Estate Management and Consultancy

team, warns of the need for landowners to be wary. “This is a further increase to the bureaucracy faced by farmers and landowners,” he says. “It will potentially affect a lot of individuals with water pipes feeding cottages and houses, which are now no longer owned.

“Establishing the respective responsibilities for the supply pipe, which are often hidden in deeds, is vitally important when any work to private mains is required. Hopefully, the new charges by the local authorities will be sensibly applied.”

Regulating water standards

Dates foryour diary

Savills will once again be at some of the most significant events in the

agricultural calendar this year. Please visit our stands at the following

shows, where our staff will be delighted to meet you.

May 16 Essex YFC Country Show, Chelmsford

June 2-3 Suffolk Show, Ipswich

June 6 Cambridge Show, Cambridgeshire

June 9-10 The Cereals Event, Royston, Cambridgeshire

June 10-12 South of England Show, Ardingly

June 10–12 Royal Cornwall Show, Wadebridge

June 23–24 Lincolnshire Show, Lincoln

June 24-27 Royal Highland Show, Edinburgh

June 30– July 1 Royal Norfolk Show, Norwich

July 2-4 Scottish Game Fair, Perth

July 13–15 Great Yorkshire Show, Harrogate

July 23–25 The CLA Game Fair, Ragley Hall,

Worcestershire

August 5 The Honiton Agricultural Show, Devon

August 7 Blakesley and District Agricultural Show,

Northamptonshire

August 18 Gillingham & Shaftesbury Show, Motcombe,

Dorset

September 4 Moreton-in-Marsh Show, Gloucestershire

September 4 Alresford Show, Tichborne Park, Hampshire

September 11 Frome Agricultural & Cheese Show, Somerset

October 6 The Dairy Show, Bath & West Showground

A new income stream for landowners and managers could be in the offing if plans to create funds

from developments which affect ecosystem services come to fruition.

The Environment Bank has been created to facilitate and broker new investment into the natural environment by providing a service to ‘offset’ environmental impacts through an initiative called ‘habitat banking’.

“The evidence is overwhelming. The quality of natural landscapes has declined significantly over the past decades, largely as a result of development and agricultural intensification. Habitat banking offers an opportunity to stitch back the fabric of the British countryside” says Dr David Hill, Chairman of the Environment Bank.

The principle is based on the purchase of credits in the ‘bank’ by a land user such as a developer, and the use of those credits by the bank to facilitate the creation and ‘in perpetuity’ management of land for biodiversity conservation, landscape and other ecosystem services.

The Environment Bank envisages entering into agreements with landowners and managers to provide land for the creation and restoration of wildlife habitats, improve water quality, provide flood mitigation, store carbon, and create large-scale landscapes of significant value.

Developers would benefit through greater clarity in the planning process, avoidance of costly delays, reduced costs through avoiding the sterilization of developable land, and

removing the burden of mitigation delivery from them. Landowners and managers would benefit by having access to an additional income stream while at the same time contributing to the safeguarding and enhancement of the countryside in the UK.

“We have to look at new and simpler ways to enable the countryside to harness the value of their environmental assets and offset the affects of development,” says Hugh Coghill, Head of Savills Rural.

The Environment Bank would be pleased to hear from anyone interested in registering potential land with them. They are currently working to encourage the implementation of a habitat banking policy in the UK. Visit www.environmentbank.com for more information or contact Hugh Coghill.

T here must be an election looming: the Government has issued a flurry of initiatives recently.

Among the raft of national planning policy statements (PPSs) issued recently by the Government is the new PPS4, ‘Planning for Sustainable Economic Growth’, which replaces significant parts of PPS7, ‘Sustainable Development in Rural Area’. Part of the Government’s effort to streamline the planning process, it incorporates many of the elements of PPS7.

Crucially it states upfront that the ‘intrinsic character and beauty’ of the countryside should be protected and proposes strict controls on economic development in the open countryside, but is far more positive about opportunities to enhance and diversify the rural economy, including increased support for converting buildings; improving local facilities to serve day-today needs: farm diversification; and equine enterprises that continue to maintain environmental quality and countryside character.

In addition, it includes measures for promoting tourism and leisure developments in rural areas.

PPS4 contains one potentially important difference: PPS7 required that rural development should ‘not detract’ from the attractiveness of the countryside; PPS4 requires the local planning authority to undertake a ‘careful weighting’ of the economic benefit and any environmental harm.

So where clear economic benefit can be demonstrated, there is likely to be increased latitude in what development may be permitted,

provided, of course, that a proposal carefully addresses the issue of countryside protection.

And what of the Opposition? The Conservatives’ recent Green Paper sets out alterations for the planning system. They would transfer power from regional to local authorities, abolishing the so-called regional spatial strategy, which sets housing targets for local authorities, and allowing local authorities to set housing targets themselves, as well as choosing locations for growth.

The Conservatives pledge to prevent development on the most fertile farmland, except in exceptional circumstances, and stop the planning system unnecessarily restricting economic growth in rural communities. While recognising the fundamental importance of farming and land management, they plan to extend the designation of brownfield land to include land previously occupied by agricultural businesses.

Change is in the air, and Savills is ready for it. Our estate management department is expanding, with Iain Hill-Trevor joining the team following years of managing his own estate in North Wales with huge success. His hands-on input into the initial assessment of an estate’s opportunities and the project management of any schemes that ensue will be invaluable as landowners face the post-Election future.

Is habitat banking a new income stream?Future plans for

rural development

Contact: David Jackson01865 269 [email protected]

Aspects of LandAspects of Land


Brechin

Perth

EdinburghGlasgow

Norwich

Salisbury

Clifton

Exeter

Nottingham

Manchester

Wilmslow

York

Lincoln

Ipswich

Cambridge Bury St Edmunds

Peterborough

Leeds

Truro

Bodmin

Chester

Wimborne

Canford Cliffs

Bournemouth

WinchesterSouthampton

Cranbrook

London & the Home Counties33 offices

Micheldever

Locksbottom

Tunbridge WellsSevenoaks

Bishop’s Stortford

Farnham

Chelmsford

HaywardsHeath

Guildford

ReigateHorsham

Summertown

Loughton

Harrogate

Bath

Bristol

Cirencester

Cheltenham

BirminghamSolihull

Telford

Oundle

Banbury

Cardiff

Milton Keynes

Henley

Oxford

Newbury

Southill

Beaconsfield

Harpenden

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.There will be a fee for mortgage advice. The precise amount will depend upon your circumstances and loan amount, we estimate that the fee will be0.67% of the amount borrowed. Savills Private Finance Limited is authorised and regulated by the Financial Services Authority (FSA). FSA does notregulate buy-to-let or commercial mortgages. Approved and issued by Savills Private Finance Limited, 25 Finsbury Circus, London EC2M 7EE. February 2010. www.spf.co.uk

For all your agricultural property finance needs

Contact Savills Private FinanceMark Ashbridge on 07968 553 352 or [email protected] Ducker on 07812 965 450 or [email protected]

Need a loan? Look no further.

18500_SPF_AspectsOfLand_297x210mm:Layout 1 26/2/10 09:33 Page 1

SouthillMark Egar Southill Estate, Southill Park,Biggleswade SG18 9LJ 01462 813 [email protected]

TelfordClive BeerHall Court, Telford TF3 4NF01952 239 [email protected]

WinchesterCharles SeligmanJewry Chambers, 44 Jewry Street,Winchester, Hampshire SO23 8RW 01962 841 [email protected]

YorkAndrew Black13-15 Micklegate, York YO1 6JH01904 617 [email protected]

Bishop’s Stortford John WoottonChequers, 19 North Street,Bishop’s Stortford CM23 2LD01279 756 [email protected]

BodminPaul CressyDreason, Lanhydrock,Bodmin PL30 4BG01208 264 [email protected]

BrechinEwan Berkeley12 Clerk Street, Brechin DD9 6AE01356 628 [email protected]

CambridgeAdrian WilsonUnex House, 132-134 Hills Road,Cambridge CB2 8PA01223 347 [email protected]

ChelmsfordSimon Dixon Smith136 New London Road,Chelmsford, Essex CM2 0RG01245 269 [email protected]

Cheltenham Douglas MackellarThe Quadrangle, Imperial Square,Cheltenham GL50 1PZ01242 548 [email protected]

EdinburghCharles DudgeonWemyss House, 8 Wemyss Place,Edinburgh EH3 6DH0131 247 3700 [email protected]

ExeterMike TownsendThe Forum, Barnfield Road,Exeter EX1 1QR01392 455 [email protected]

GlasgowHugo Struthers163 West George Street,Glasgow G2 2JJ0141 248 [email protected]

Haywards Heath Jason Emrich37-39 Perrymount Street, Haywards Heath, West Sussex RH16 3BN 01444 446 [email protected]

IpswichMichael Horton50 Princes Street, Ipswich IP1 1RJ01473 234 [email protected]

LincolnPaul AinscoughOlympic House, Doddington Road,Lincoln LN6 3SE01522 508 [email protected]

LondonCrispin HolborowLansdowne House, 57 Berkeley Square,London W1J 6ER020 7499 [email protected]

NorwichRoly BeazleyHardwick House, Agricultural Hall Plain,Norwich NR1 3FS01603 229 [email protected]

Nottingham Jonathan Morgan Smith9 Fletcher Gate,Nottingham NG1 1QQ0115 934 [email protected]

OxfordCharles CampionWytham Court, 11 West Way,Oxford OX2 0QL 01865 269 [email protected]

PerthJonathan Henson55 York Place, Perth PH2 8EH01738 445 [email protected]

SalisburyDavid CrossRolfes House, 60 Milford Street,Salisbury SP1 2BP 01722 426 [email protected]

SevenoaksAndrew Highwood74 High Street, Sevenoaks TN13 1JR01732 789 [email protected]

Savills has over 90 offices across the UK with 23 dedicated rural offices, as listed below

KEY TO maP

Office includes rural department

Other Savills offices

Office directory

savills.co.uk

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