lb6 p01-28 cover des1… · forms part of a long-term estate strategy, one that is nimble enough to...

The Essex estate in the 2012 Games spotlight

Maximising profitability with business restructuring

Government support for renewable energy schemes

LandBusinessAUTUMN / WINTER 2011

Debating the future of UK farming

LB6_p01-28_Cover_des1.indd 2 02/12/2011 12:37

Cov

er im

age:

Cor

bis

LB6_p02-03_WelcomeContents_des2.indd 2 02/12/2011 12:59

James FarrellHead of Rural Consultancy

3 strutt & parkerland business autumn/winter 2011

Cov

er im

age:

Cor

bis

LandBusinessAUTUMN /WINTER 2011

Contents Welcome

Published by Sunday, Studio 2, Enterprise House, 1-2 Hatfi elds, London SE1 9PG. 020 7793 2460 www.sundaypublishing.com

The views expressed in this publication are not necessarily those of Strutt & Parker.

James FarrellJames FarrellHead of Rural Consultancy

3 strutt & parkerstrutt & parkerland business autumn/winter 2011

Cov

er im

age:

Cor

bis

Published by Sunday, Studio 2, Enterprise House, 1-2 Hatfi elds, London SE1 9PG. 020 7793 2460 www.sundaypublishing.com

The views expressed in this publication are not necessarily those of Strutt & Parker.

04 News & views The latest for landowners and farmers

08 Facts & fi gures The latest stats on land, property and agriculture

09 Don’t give up on bricks and mortar Edward Blacker looks at property market performance

10 Chewing it over S&P’s George Chichester, James Paice MP and others debate food security at the Conservative conference

13 Climate change is the greater injustice Michael Verity on the impact of global warming

14 On course The Strutt & Parker-managed Hadleigh Farm will host the mountain biking events at the 2012 Olympic Games

18 A changing landscape Philip Hutley explores how business restructuring can help minimise taxation and maximise profi tability

21 Energy policy FITs and starts Alexander Creed on changes to the Feed-in Tariff

22 Variety show Three estates that are diversifying into some unusual crops, from calendula and quinoa to Christmas trees

25 Love thy neighbourhood? Craig Noel on recent changes to the planning system

26 About us Strutt & Parker’s range of services, plus offi ce listings

WelcomeGovernment policy seems

to be a constantly shifting

landscape, and one of the

greatest challenges of running a

modern estate or farm is surely

keeping pace with changing

plans and proposals from the UK and EU. In recent

months we have had the proposed National

Planning Policy Framework and the Localism Act

herald a new era for the planning system. We have

also had news about the proposed changes to the

Common Agricultural Policy. At this stage they raise

more questions than they answer, but in their current

form the proposals represent signifi cant changes

for UK agriculture. Are we going back to set-aside?

Will we have capping for the fi rst time? Active farmer?

This announcement was closely followed by

the coalition’s decision to slash the incentive

payment for solar PV by half with just six weeks’

notice, throwing the industry into chaos and

threatening thousands of projects and jobs.

It was a victim of its own success, with a reported

100,000 householders draining the limited funds

available long before the expected 2015 deadline.

As ever, where there is change, there is

opportunity – it is a matter of recognising that,

and being fl exible enough to take advantage

of it. Along with intelligent business structuring,

succession and taxation planning, energy now

forms part of a long-term estate strategy, one

that is nimble enough to respond to the vagaries

of the economy and the whims of policymakers.

LB6_p02-03_WelcomeContents_des3.indd 3 05/12/2011 12:35

4strutt & parkerland business autumn/winter 2011

Rising water levels

News Views

The latest statistics from Defra show that the total volume of water used in agriculture in England in 2009/10 was 184 million cubic metres. With an average cost of £0.49/m3, the total cost to English agriculture was £90 million. On a rural estate, the volume of clean and dirty water used is significant. Uses range from the agriculture business (whether in-hand, arable or livestock) and let residential and commercial portfolios to forestry, sporting and tourism. With the value of clean water and the cost of disposing of dirty water set to increase, rural estates should understand their water footprint and begin to develop a water strategy, to identify vulnerability to the financial viability of their existing business and future opportunities. Rob Wilkinson, Farming Department

LB6_p04-07_News_des3.indd 4 07/12/2011 14:21

HERITAGE HEADACHES: Current system ‘dysfunctional’


Most rural estates are familiar with the challenges of being responsible for heritage buildings. And all too often they are frustrated by barriers preventing them from making sympathetic changes to the building or its use, especially to generate income. In a recent publication, Averting a Crisis in Heritage; Reforming a Crumbling System, the Country Land and Business Association brands the current heritage management system ‘dysfunctional’, and says that the government’s proposed Heritage Bill is ‘too complicated’. The report claims the government receives more from historic buildings through tax policies than it spends, leaving much of the heritage cost to owners and occupiers. It also makes a number of sensible recommendations for changes.Jane Henshaw, Building Surveying

It is well known that donations to charity attract two forms of tax relief under the Gift Aid arrangements: the charity can reclaim tax from HMRC on the ‘gross’ equivalent of a donation before tax was deducted at the basic rate; and, if the donor is a higher rate taxpayer, they can recover higher (40%) or additional rate (50%) tax relief on the amount of the gift.

Less well known is the relief for gifts of shares and securities or UK land to charity. Any gain arising on the gift does not attract Capital Gains Tax (CGT) and the charity is treated as inheriting the donor’s base cost along the lines of rollover relief. The main benefit here is that, provided the charity uses the disposal proceeds for charitable purposes, the gain escapes tax altogether. Also, the value of the assets transferred can be treated as a deduction from the donor’s tax liability, thereby securing basic and higher/additional rate tax relief in addition to the CGT advantages.

An Inheritance Tax (IHT) opportunity has also arisen for deaths on or after 6 April 2012, where at least 10% of the estate is given to charity. In these cases, the main rate of IHT is reduced from 40% to 36%. For example, if an estate is worth £10 million, and at least £1 million has been left to charity, then the tax would be reduced from £3.6 million to £3.24 million, a saving of £360,000. The net estate passing would be £5.76 million, compared to £6 million had there been no bequest to charity, so the £1 million gift only costs £240,000. However, this attempt to increase bequests to charities may also have the effect of delaying income flow, as lifetime gifts are deferred until death.Nicholas Watson, Land Management

RED TAPE RELIEFDefra has announced more than 200 detailed recommendations to reduce bureaucracy within the farming, fi shery and forestry sectors, which costs around £750 million every year. The independent Farming Regulation Task Force, published in May 2011, aimed to fi nd ways to reduce the regulatory control on farmers and food processors. Agricultural Minister James Paice cited the recommendations as a ‘framework’ for reform. The government will provide a full response to the report in 2012.Will Gemmill, Farming Department

boosting your gift

TOP TIP

S&P SUPPORTS PRINCE’S FUNDStrutt & Parker is proud to announce its support of The Prince’s Countryside Fund. Set up by the Prince of Wales last year, it is, in his words, ‘a unique collaboration of brands and businesses working together to secure a sustainable future for British agriculture and the wider rural economy.’ Find out more at princescountrysidefund.org.uk.

LB6_p04-07_News_des3.indd 5 07/12/2011 14:21


Nature’s worth

Phot

ogra

phy:

iSto

ckph

oto;

Cor

bis

FITs and starts

In a radical yet comprehensive report, the National Ecosystem Assessment (NEA) has placed an economic value on our natural environment and the impact of conservation. Seeking to establish the financial benefits of the implementation of conservation strategies, the NEA used two reports commissioned by Defra – on how much the public would be willing to pay for the protection of Sites of Special Scientific Interest, and on the financial value of biodiversity – to place a value on the service green spaces provide to the wider economy. The report suggests that neglect of our ecosystems could cost as much as £20 billion a year, but if properly protected, they could contribute an extra £30 billion to the economy. The findings have the potential to impact the valuation of land, and the government has sought to use the NEA to influence rural and urban planning. For landowners, the growing evidence of the monetary worth that their care for the environment can deliver is encouraging.Ross Houlden, Land Management

From April 2012, the Annual Investment Allowance (AIA) for plant and machinery will be reduced from £100,000 to £25,000, and the general writing down allowance will drop from 20% to 18%. Businesses should therefore look to complete the purchase of plant or machinery of substantial value before this time. If your accounts year end is between now and April 2012, you could enter into an unconditional contract before the end of your accounting period to secure the higher rate of relief, or even consider a change of accounting date.

Cash flow is the most common barrier to investment, but plant and machinery does not need to be paid for in full. Provided the item is being used and the purchaser has entered into an unconditional contract, then it is eligible for AIA. And if you have already used your £100,000 allowance, you can defer expenditure by entering into an agreement conditional upon delivery. Also, all businesses are eligible to a 100% enhanced capital allowance on certain energy-efficient plant.Nicholas Watson, Land Management

quick buy

TOP TIP

ROLLBACKLegislation in the 2012 Finance Bill will restore CGT rollover relief for disposals of entitlement to payments under the EU’s Single Payment Scheme for farmers. In January 2009, due to a change in the EU Directive, the entitlement fell out of the defi nition for what qualifi es for rollover relief. This will be amended, along with a more precise defi nition of who qualifi es as an ‘active’ farmer.Jonathan Smith, Taxation

LB6_p04-07_News_des3.indd 6 07/12/2011 14:27

The case of Golding v HMRC, known as the ‘Golding Case’, represents a significant victory for the taxpayer in securing Agricultural Property Relief (APR). Mr Golding farmed a 16-acre smallholding in Staffordshire from 1965 until his death in 2007, by which point farming activities had declined significantly. His executors claimed APR on the farm to reduce the liability for Inheritance Tax on the estate, which HMRC accepted in principle, but they argued that the three-bedroom farmhouse was not eligible for relief as it was not ‘character appropriate’. The case was referred to a First-Tier Tribunal. The judge concluded that the historical facts (a room had been an apple store at one time) and Mr Golding’s intentions to carry on farming (he had recently bought some farm equipment), demonstrated that the property was entitled to qualify for APR. HMRC’s arguments appear to be based around the financial viability of the smallholding, whereas the judge favoured a common-sense approach, understanding that the level of activities must change when owners become older.Nicholas Watson, Land Management

sound judgment

TOP TIP

Planning policy potential

TAKE CARE


ADOPTING SEWERSSince October 2011, water and sewage companies are responsible for repairs to all shared sewers and drains that connect to the public sewer. Landowners on rural estates who own private sewers will now be relieved of the financial burden of maintaining them. The new rules also provide an opportunity to reconsider the economics of replacing a septic tank or biodisc, rather than connecting into the public sewer. However, there could be problems where pipes run through potential development land, as the landowner will now have to rely on the Water Industry Act 1991.Ross Houlden, Land Management

The Town and Country Planning Act 1947 set out a presumption in favour of development, which became a plan-led approach in 1991. The emerging National Planning Policy Framework aims to establish a presumption in favour of sustainable development, defined as a balance between economic, environmental and social issues. These three pillars form the fundamental principles against which rural estates make decisions, and so, depending on the final wording of the framework, and on its interpretation by Local Planning Authorities, there could be significant opportunities for landowners. Neil Culkin, Planning Department

Recent statistics have branded agriculture the most dangerous profession in the UK, with 44 deaths in the past year alone. As a result, 16 agricultural organisations have come together to launch the ‘Farm Safety Charter’, a campaign that offers education, training, qualifications and events focussing on safety in the workplace. A worrying lack of safety provisions has been exposed, and those in the agricultural and forestry sector are encouraged to make reviewing their health and safety arrangements a priority. They are also warned of the financial implications of accidents, which cost the sector £343 million last year. Richard Taylor, Farming Department

FUNDING FORESTRYThe Woodfuel Woodland Investment Grant is currently open for applications. The grant offers 60% towards the cost of infrastructure to support and increase the supply of timber from undermanaged or inaccessible woodland areas. The area must have a Woodland Management Plan that demonstrates undermanagement or a barrier to sustainable harvesting. Andrew Thomas, Land Management

News Views

LB6_p04-07_News_des3.indd 7 07/12/2011 14:22


Recent statistics reveal the lie of the land in agriculture, land values, and commercial and residential property

Sour

ces:

Dep

artm

ent o

f Ene

rgy

& C

limat

e C

hang

e; In

vest

men

t Pro

pert

y D

atab

ank;

Offi

ce

for

Nat

iona

l Sta

tist

ics;

Str

utt &

Par

ker

rese

arch

13%INCREASE IN LAND VALUES (over the past 12 months)

9%TOTAL ANNUAL RETURNS ON

INVESTMENT IN RURAL PROPERTY

(Dec 2010)

62%FARMERS

16%LIFESTYLE

PURCHASERS

12%PRIVATE

INVESTORS

475,000

£4.38 billion

330 acres

Facts Figures

1.3%FALL IN HOUSE PRICES ON THEPREVIOUS YEAR (Aug 2011)

PLANNING APPLICATIONS RECEIVED BY DISTRICT LEVEL PLANNING AUTHORITIES IN THE YEAR ENDING JUNE 2011

TOTAL UK INCOME FROM FARMING IN 2010, DOWN 4.3%

AVERAGE ARABLE LAND VALUES

(PER ACRE)

AVERAGE FARM SIZE COMING ON TO THE MARKET

1.82%CAPITAL VALUE GROWTH IN COMMERCIAL PROPERTY (Jul-Aug 2011)

0.2%RENTAL VALUE GROWTH IN COMMERCIAL PROPERTY (Jul-Aug 2011)

4.3%SIX-MONTH RETURN ON COMMERCIAL PROPERTY INVESTMENTS (RETAIL, OFFICE & INDUSTRIAL) (Aug 2011)

INCREASE IN THE SUPPLY OF ARABLE LAND TO THE MARKET, COMPARED TO THE SAME PERIOD IN 2010

TYPES OF FARM COMING TO THE MARKET 51%

ARABLE

13% PASTURE

24% RESIDENTIAL

12% OTHER

£6,874

6.5

%%

FARM BUYERS BY TYPE

LB6_p08-09_Stats_Blacker_des4.indd 8 02/12/2011 14:13

IN 2011, THE UK PROPERTY MARKETcontinued to witness activity in the residential, commercial and rural sectors. Several underlying characteristics common to each of those markets mean that UK property is attractive, even in these uncertain times.

Macro considerations, such as the UK’s stable political backdrop, established legal framework, landlord-friendly common leasing practices and general levels of information transparency across the principal sub-markets, have all encouraged a wide variety of investors, both private and institutional, domestic and overseas, to invest in property here.

Property also plays an important role in diversifying a broader investment portfolio. In times of volatility across the majority of fi nancial media, it can provide a perceived infl ation hedge. Property can also provide an income stream, although the level of return relative to the capital invested will depend on the levels of risk that the investor is willing to accept.

The residential, commercial and rural markets tend to exhibit different

investment characteristics over time. Within each sector

there is, of course, a wide variance of investment performance dependent on the specifi c nature of the individual asset. Overall, the residential sector offers capital returns

similar to the commercial sector, although performance

of prime central London residential, for example, has been

signifi cantly better. Looking at income return, in broad

terms residential property tends to offer a lower return than commercial property; however, it tends to suffer less from obsolescence and so requires less additional capital expenditure to maintain that income. The rural market has witnessed some stellar comparative returns over the past fi ve years, principally in capital returns. Prime arable farmland

values have increased by around 130% over the past five years, and can also offer attractive Inheritance Tax benefi ts. Compared to the residential and commercial sectors, however, the income remains low.

Commercial property offers the highest income returns available in the real estate sector. The Investment Property Databank (IPD) all-property return three-year average is currently 6.3% per annum. That makes it one of the few investment media where the average income return is above the rate of RPI infl ation, which currently stands at 5.6% (ONS). However, alongside the potential for higher income returns, commercial property has a higher risk profile, including factors such as obsolescence exposure and the risk of tenant default.

While it is relevant to have an understanding of the general characteristics of the principal markets, property is not homogenous, and each geographical area within each sector will exhibit different traits. At this stage in the cycle, there is a signifi cant gap between the investment performance of prime and secondary product, which is refl ected in a widening pricing differential. We do not anticipate this to change in the foreseeable future.

Each sector and geographical location offers opportunities as well as threats, and the UK market, with its transparency of information, allows an investor to evaluate the risks based on the specifi cs of the investment and its local market. In a period characterised by either asset price volatility or low growth, the income generated by property can offer an attractive diversifying element to a mixed portfolio. [email protected]

Opinion UK property

‘the income generated by

property offers an

attractive element to

a mixed portfolio’

Illu

stra

tion

: Cru

sh/a

genc

yrus

h.co

m

By Edward Blacker, Property Wealth

Management

Don’t give up on bricks and mortar

330 acres

9 strutt & parkerland business authumn/winter 2011

LB6_p08-09_Stats_Blacker_des4.indd 9 07/12/2011 12:18

10strutt & parkerland business autumn /winter 2011

CHEWING IT OVERt a session hosted by the Conservative Rural Affairs Group at the Conservative Party Conference in October,

George Chichester of Strutt & Parker’s Farming Department, agriculture minister James Paice, Richard Ashworth MEP and Professor Charles Godfray CBE of Oxford University discussed vital questions on food security and sustainability in the UK.

Will European support for agriculture continue, and if so at what level?RA: Unauthorised leaks of the CAP reform proposals have been circulating, but these are not certain as even the members of the Agriculture Committee don’t know exactly what is being proposed. Once this document

is published, Parliament will then take six to nine months to consider their opinion – and they have a 50% involvement in this now. However, there are suggestions that farmers will need to satisfy certain criteria to be eligible for payments, and that there will be a capping implication for larger farming businesses.GC: That said, the EU budget was approved in principle a couple of months ago, which confi rmed continuation of the CAP budget at a similar rate to now. And, although there are proposals for a more uniform rate of payment throughout Europe, the UK is in the middle band and, therefore, will not suffer unduly.RA: The announcements on preservation of the budget were misleading – these were

only approved if the overall budget is increased by 5%, which is unlikely to occur in practice. It is more likely that there will be a fall in allocation, as there are other major priorities in Brussels at present, particularly with the 23 million people unemployed, 20% of whom are under 25, and the need for comprehensive growth in the EU industrial sector.

What is the future for organic farming?JP: Whatever the customer decides! If the customer is prepared to pay a premium for organic produce, it will keep the sector alive; if not, it will wane. However, there are practices that organic farmers use that conventional farmers would do well to exploit, such as sound rotation practice.

A

From EU support and regulation to to genetic modifi cation, what does the future hold for food production in the UK?

LB6_p10-13_Conference_Verity_des4.indd 10 07/12/2011 12:23

Food security

11 strutt & parkerland business autumn /winter 2011

CHEWING IT OVERCG: There are enormous challenges ahead if we are to meet the growing world demand for food. It is critical to pick best practice, and organic farming can teach us a lot about agro-ecological approaches, brand recognition and engaging the public. But it cannot deliver the quantity needed.GC: Organic is a niche market, and there is demand. Its techniques have much to commend them, in particular the reduced reliance on artifi cial inputs (which are in fi nite supply) and the efforts to enhance sustainability.RA: There are indications from the Commission that there will be ongoing incentives for organic farming. However, this is potentially worrying in the light of the world food crisis.

Is current research and development into agriculture sufficient to regain Britain’s leadership in secure and sustainable food production systems?CG: A rebalancing is needed. Food prices have been at historic lows for the past 40 years, and investment into research and development [R&D] has been equally low. This needs to be reversed, both in high technology plant and animal breeding, as well as agronomy, soil science and agricultural engineering. The challenge is to increase both yields and input effi ciency. JP: Inputs are exhaustible. Precision farming is essential, linked as it is to satellite navigation and the variable application of inputs. There is much more to be done on this subject.

GC: World population rose from one to six billion over the two centuries to 2000, mainly as a result of an enormous agricultural revolution involving artifi cial inputs, genetic breeding and mechanical technology. The prospect of a further three billion people to feed by 2050 is alarming, especially as there is no more land available, and considering climate change and changing diets in the developing world. Investment into R&D should be pushed close to the top of EU and world agendas.RA: Both the UN and EU acknowledge the need for greater R&D. Equally, they appreciate the need to increase global food production by 70-100%. We have done it before, but the last generation has taken the ‘low hanging fruit’ and it will be more

Strutt & Parker’s George Chichester, Richard Ashworth MEP (far left), James Paice (below left) and Charles Godfray (below) in discussion at the Conservative Party Conference



Phot

ogra

phy:

Ste

ve M

orga

n

Food security

expensive to progress research to higher levels. It is important that the EU takes this message on board and makes extra funding available.CG: We must use all the tools available, including genetic modifi cation [GM]. GM is not a silver bullet, and over-enthusiastic backing could be counterproductive, but it would be a great mistake to rule it out.GC: GM is inevitable in the EU – it is just a question of when it will be permitted. In the meantime, we should, with great care, get on and embrace the technology, focussing on the more obviously benefi cial developments such as drought tolerance, nitrate fi xing ability and disease resistance.

Do you agree that if farmers are less regulated they could produce more food and fuel, and therefore help to boost the economy?JP: The government is determined to reduce the burden of regulation and has progressed considerably with proposals in this regard in the Macdonald report. However, the government is responsible for the economy of the nation and needs to nurture the entire food and fuel supply

chains, not just UK farming. Food should take precedence over fuel.CG: We are moving from an era of low food prices to one where food production is economically more profitable. One cannot separate what will happen in this country from world events, nor unduly hinder international trade. However, I worry about the enthusiasm for biofuels in the US and Continental Europe, which is in danger of fuelling food price volatility, especially in low-income countries.GC: We are less than 60% self-suffi cient in this country, and only 70% in indigenous foods. Clearly there are some foods that we cannot grow here, and it is not essential to be entirely self-suffi cient. However, in 15 years’ time we will be down to 50% self-suffi cient, and surely that is too low. There is nothing more politically unstable than a population with hungry stomachs.RA: The Foresight report notes that food sufficiency will be of major strategic importance politically in coming years. It is essential that we create a viable, sustainable and competitive food economy, yet there is nothing about this in the leaked CAP proposals. Biofuels are niche crops

that are market driven. The world has two crises on the horizon: food and fuel shortages. The market must determine which is the more important.

Are you concerned at EU proposals for increased greening measures linked to the Single Payment Scheme?RA: I am concerned at how much of this will be required under Pillar I, as opposed to Pillar II. And I worry that these proposals, as well as the possible reintroduction of set-asides and restrictions on arable rotations, will involve more complexity and regulation, which will reduce competitiveness and effi ciency. The same can be said for proposals for capping payments to larger farmers and introducing additional support for small farmers (which is not what the UK would deem ‘small’). Also, the proposed equalisation of payments between member states is concerning, as Greece would see a big reduction in payments when their economy is already perilous. CG: I would prefer the green element were used to correct explicit environmental market failures within Pillar II.

The panel, chaired by Nigel Finch of the Conservative Rural Affairs Group (centre) take questions from the fl oor


MILLIONS OF PEOPLE SUFFERING from the cooling of the world economy will, justifi ably, be feeling a sense of injustice. Regardless of whether the global economic downturn was caused by the sub prime mortgage market in the US or a deeper problem in the mechanics of the developed world’s fi nancial markets, those disadvantaged feel distanced from the cause and can rightly claim that it was somebody else’s fault. The sense of injustice is heightened by the fact that those whose fault it actually was (possibly a continent away) don’t seem to be suffering at all from the consequences of their actions. But as we consider the cooling of the global economy, we mustn’t forget about the warming of the global environment. We cannot distance ourselves from the causes of that. And while the government wrangles over its various carbon emissions reduction policies, it is not an excuse for us to do nothing.

Those made homeless by the floods in Pakistan, Australia and Brazil may feel the same sense of injustice that their lives have been turned upside down by the actions of others. Emotive? Yes. But we have all contributed to polluting the world, and we have all been profl igate with our consumption of energy; there are consequences.

Chancellor George Osborne said recently that ‘we will cut carbon emissions no slower but also no faster than our fellow countries in Europe’. This statement has been highly criticised, as it was in stark contrast to the government’s much-lauded intentions in May 2010. Then, the focus was on making sure the UK took a lead role in reducing carbon emissions and increasing the provision of sustainable energy alternatives. But now, in the depths of the UK’s economic downturn, it looks like there is a serious battle going on between the Treasury and the Department of Energy and Climate Change over the cost to businesses of reducing emissions too

quickly and the fi nancial details of their sustainable energy policies. It is this distancing from its green responsibilities, along with the continuous delays to flagship energy schemes, that is making government policy look chaotic.

At a time when global warming is a critical issue, and rising energy costs are a focus for national debate, some of the key policies to help reduce our energy use are stalling. The Energy Bill, designed to enable a step change in the provision of energy effi ciency measures to homes and businesses, has been delayed and only recently received Royal Assent. The Renewable Heat Incentive, which helps property owners become more energy self-suffi cient, should have been in progress by October, but was also delayed as the government failed to secure European Commission approval for the scheme to start. But the UK is still bound by European targets to reduce carbon emissions and to ensure we

produce 15% of our energy from renewable sources by 2020 – a fi gure that we are

still a long way from achieving.So what should we be doing?

There is a growing awareness among property owners that they need to be doing something. Unfortunately, one of the reasons people are put off ‘greening’ their property portfolios is the

inconsistent government policies, which can create

nervousness among investors about the timescales and values of

energy schemes.Despite the confused coalition, we all have

environmental responsibilities and there are things we can do now that make both economic and environmental sense. Really, there is no excuse. And next time you feel aggrieved about the state of the world economy, think about those who are suffering from climate change.

[email protected]

Opinion Climate change

‘one of the reasons people

are put off greening their

property is inconsistent

policies’

Illu

stra

tion

: Cru

sh/a

genc

yrus

h.co

m

By Michael Verity, Head of Resources

and Energy

Climate change is the greater injustice




Hosting an Olympic mountain-biking event is just one of the features that makes the Salvation Army’s Hadleigh Farm in Essex a unique and diverse enterprise. Tim Abrahams discovers what else the 2012 Games venue has to offer

ON COURSE

LB6_p14-17_Hadleigh Farm_des5.indd 14 02/12/2011 14:45

strutt & parkerland business autumn/winter 201115

Hadleigh FarmCase study

Standing at the start of the 5km track that snakes around a bowl of rolling grassland above the Thames Estuary, it is easy to see why Hadleigh

Farm was selected as the location for the mountain biking events of the 2012 Games. The 900-acre farm, which is owned by the Salvation Army and managed by Strutt & Parker, has all the right natural attributes: fantastic gradients for cycling, beautiful grassland and woodland, great views for spectators and easy access from London.

Hadleigh Farm is also uniquely capable of dealing with specialist demands, as it’s designed to run as an educational working farm rather than purely cultivating for profit, explains David Rice, Director of Risk Management at the Salvation Army.

General William Booth, founder of the Salvation Army, bought the site in 1891. From the beginning, the farm was not just an agricultural venture, but a ‘Land and Industrial Colony’, explains David. ‘The previous year, Booth had published a book, In Darkest England and the Way Out, in

which he described his vision for an integrated social work plan to get people off the streets, out of unemployment and trained up to give them a new start,’ he says. ‘It was the definition of redemption in practice.’ The workers were housed in barracks and dormitories, and the farm was connected to the pier by a steam railway so that goods could be shipped to and from London in the old Thames barges. The range of farming included livestock, arable, poultry, market gardening and orchards, as well as pottery and a



brickworks. Once they were trained, Booth found the men jobs in Britain and abroad.

Today, Hadleigh Farm is still an intrinsic part of the care the Salvation Army delivers. A new training centre, opened in 1990, offers a programme to help young people with special educational needs, mainly from Essex, who are referred by the local authority. ‘We’ve got young trainees working in animal husbandry, but there’s also a carpentry shop, a print and design shop, and a building maintenance division,’ explains David. ‘If you have lunch in the tearooms, you’ll have trainees serving you and working in the kitchen. It’s just about in line with Booth’s vision.’

The farm is also home to the Rare Breeds Centre, introduced under advice from Strutt & Parker in 2004. The centre, which covers around an acre and a half, promotes conservation and education in rare breeds, and boasts Leicester Longwool and Greyface Dartmoor sheep, Bagot and Golden Guernsey goats, and Derbyshire Redcaps and Scots Grey chickens. Charles Ireland, from Strutt & Parker’s Farming Department, is pleased with its success. ‘We’ve had 43,000 visitors this year, even though we close during the winter,’ he says. However, it is in reconciling the potentially conflicting demands of a commercial farm with the social requirements of the Salvation Army that the centre has proved a real success. ‘We link closely with the training centre,’ explains Charlie. ‘We can provide eight full placements a week, carrying out a huge range of jobs. The trainees look after the animals, cleaning them out and feeding them, and do a bit of repair work. In time they’ll have visitor contact as well.’

Strutt & Parker has helped transform the fortunes of the commercial operation at Hadleigh Farm. ‘When we took over the management, there was an 80-cow suckler herd, a poor-performing arable side of the business and that was it,’ says Charlie. There are now 600 acres of both conventional and organic crops, and 300 acres of organic grassland

grazed by Hereford beef cattle. The key, he explains, has been releasing working capital and using contractors sensibly. ‘When we got here, there was masses of capital tied up in equipment. So we got rid of that and got back to basics. We now have one foreman who is employed by the Salvation Army, and we utilise contractors and expertise appropriately. It’s a matter of optimising the external and internal labour structure of the business.’

The farm also abuts both a Site of Special Scientific Interest and a Ramsar site, and itself features ecologically and archaeologically sensitive areas that are managed under an extensive Environmental Stewardship scheme. ‘There are some rare invertebrates that live in the acid grasslands,’ adds Charlie. ‘There are a number of species and they feed on two very traditional hay meadows with lots of wild flowers that have been in stewardship agreements for years.’ Ph

otog

raph

y: W

ill S

ande

rs/T

wen

ty T

wen

ty

Clockwise from above: Strutt & Parker’s Charles Ireland (left) and David Rice (right) admire the new mountain-bike track; a Bagot goat and Scots Grey chickens at the Rare Breeds Centre

Hadleigh FarmCase study



‘the salvation army’s mission is about people as well as farming. in terms of our culture, organisation and structure, we’re not like a commercial outfit – but they work with that’Ph

otog

raph

y: W

ill S

ande

rs/T

wen

ty T

wen

ty; G

etty

Imag

es

In addition, Strutt & Parker manages a number of light industrial and storage lettings, fishing agreements over the reservoir and lakes, and grazing agreements under which an element of the grassland and cattle buildings are let to a neighbouring farmer.

Game onIt was the natural features of Hadleigh Farm that convinced the Olympic Delivery Authority (ODA) to approach the Salvation Army. Having lost time trying to construct a track at another site, the ODA was under pressure to begin immediately. The Salvation Army proved understanding and, says Charlie, was willing to take a leap of faith. ‘They placed a lot of trust in LOCOG [the London Organising Committee of the Olympic Games] and in Essex County Council, and allowed construction to begin before the fine detail and exact clauses of the legacy agreement had been finalised.’

From that point on, things moved quickly. Construction of the new course began in July 2010 and was completed by April 2011 – well in advance of a test event in July. Good lines of communication were established early on to ensure the farm’s regular routine was not affected. ‘Robert Gazely from our Chelmsford Farming Department had months of operational steering group meetings with Essex County Council to ensure there was absolutely no interference with farm operations. That’s been fundamental,’ says Charlie.

The work involved bringing in more than 4,000 tonnes of rock and crushed stone to create the track, which is set on open hillsides with low shrubbery – an advantage for visitors, as it should be possible to see 60-70% of the course from the main vantage points. Spectators around the world will also be

treated to views of the medieval ruin of Hadleigh Castle, which is managed by English Heritage and is one of three Listed monuments on the site.

Use of the track after the Games has not yet been decided, but David and Charlie agree it should be operated by a third party on behalf of the Salvation Army and the council. It will be another interesting set of negotiations for Strutt & Parker, as they juggle the competing needs of their client. ‘They understand that our main objective is not really farming,’ says David. ‘They let us be exactly who we are, and take on board all our requirements while making the best of things for us from a farming perspective. We want to build our mission on the site, and that’s about people as well as farming. In terms of our culture, our organisation and our structure, we’re not like a commercial outfit – but they accommodate that.’

hadleighfarm.co.uk


hings are looking up for many farm and estate owners as activities and profitability from rural businesses change, mostly for the better.

However, this means that the business management and accounting structures need to adapt – and as quickly as possible.

Various factors have come into play in recent years that have led to increased income and the need for review: •Improved profitability from most farming sectors, particularly arable. •Additional revenue from change of use of buildings, whether to let for offices, workshops or storage, or for new ventures such as holiday cottages or a niche business. •Greater income from energy-related schemes such as wind, solar photovoltaics (PV), biomass and anaerobic digestion. •Rises in rents from both residential and agricultural property. •Continued decline in agricultural tenancies. While support was given by all political parties in 1995 when farm business tenancies were introduced, there

has been political drift since then, with tax benefits to those trading on their land rather than letting it to third parties.• The advent of the top Income Tax rate of 50% compared to the Corporation Tax rate of 20% (2011/2012) for small profits.

In many cases people are paying more tax than they need to, and incorporation is the obvious solution to take advantage of lower rates of revenue taxation. But there are numerous factors that need to be considered in a restructuring. Historically, incorporation has not been popular, mainly because of the potential for double taxation (on the disposal of property and again when the individual sells shares), but the Corporation Tax benefit and the retention of indexation of capital profits in companies means it warrants another look. Other options include becoming a sole trader, a partnership, a limited liability partnership or a trust, or a combination of two or more of these (see side bar).

Regardless of which legal structure is employed, the implications of the following

taxes need to be considered:•Revenue taxation (Income Tax/Corporation Tax)• Inheritance Tax • Capital Gains Tax•VAT •Stamp Duty Land Tax (SDLT)

Most people focus on revenue and Inheritance Tax, but ignoring the others may cause unwanted repercussions. Capital Gains Tax tends to become a problem with gifts of rented cottages and buildings, and although VAT and SDLT are less likely to be barriers, there can be issues with partnership interests, tenancies and land opted for VAT.

On the face of it, the question of whether to become incorporated or not should be easier for new business ventures. For example, a young person who has inherited a substantial sum of cash decides to purchase, with the help of a £1.5 million loan, a rural property of 800 acres with a farmhouse to be his home, four cottages and two sets of buildings, one for farming

A CHANGING LANDSCAPEIntelligent business management and succession planning can increase the profitability of an agricultural business. Philip Hutley explores the options

T


LB6_p18-21 Business Structure_Creed_des3.indd 18 02/12/2011 15:09

Financial planning


SOLE TRADER • Simple • Flexible • Least expensive • Liable for business debts • Profits taxed as income at highest marginal rate • Class 2/Class 4 National Insurance Contributions (NIC)

PARTNERSHIP • Complexity of ownership and use of assets • Subject to Partnership Act 1890 provisions or written agreement • Jointly and severally liable for debts of the business (although can have partners with limited liability) • Profits subject to income tax at highest marginal rate • Class 2/Class 4 NIC

LIMITED LIABILITY PARTNERSHIP

As for Partnerships, except • Public accounting • Liability limited to partners’ investment in the business

COMPANY • Public accounting • Limited liability (most companies) • Profits subject to Corporation Tax (currently 20% up to £300,000; 26% main rate) • Directors’ remuneration subject to Class 1 NIC as employees • Taxation of benefits in kind at directors’ highest marginal income tax rate • Profit extraction from the business via dividend or remuneration • Potential double taxation of capital profits

TRUSTS • Trustees personally responsible for the trust’s liabilities • Risk concerns about trading as trustees • Higher levels of Income Tax on trust profit than an individual would pay • Provides protection of capital for beneficiaries • Distributions of income taxed at beneficiary’s highest marginal rate • New trusts involve 10-year charges to Inheritance Tax

Main types of business

Illu

stra

tion

: Lea

ndro

Cas

tela

o / D

utch

Unc

le


purposes with 50kW of solar PV panels, and the other to be converted into offices and a storage facility.

With a potential profit of £250,000 anticipated (before finance costs), a corporate structure may have strong appeal. At this profit level, a sole trader or partners may have an Income Tax liability of £125,000 (50%) whereas a company might only have a Corporation Tax liability of £50,000 (20%), leaving £75,000 available to repay debt. This is an oversimplification, as the ultimate decision depends on the purchaser’s financial position, the method of farming, and the long-term sale or succession plan. But the potential for rolling in profits net of 20% tax in a business is attractive.Another option is for the purchaser to work on the farm rather than having a full-time job elsewhere. However, the need to extract funds from the company for day-to-day living may remove some of the benefits of the company structure.

An older person who has sold a business might approach the acquisition of the same unit differently. Enjoying country life and taking advantage of beneficial capital taxation may be a priority, and

maximising Agricultural Property Relief (APR) and Business Property Relief (BPR) would perhaps be the principal objective. In this case, operating as a sole trader, partnership or company would be the best way to fulfil that aim.

Providing the solution for a new rural business can be challenging, but altering an existing business structure is an even tougher proposition. Professional advisers have often stressed that the answer would be so much simpler if a client were not ‘where he is now’. The first step is to understand the client’s objectives and then ‘make the cap fit’. Advisers will not produce the best solution without a clear understanding of what is required of them.

If a company structure is proposed, the following must be considered: • Whether the company or individuals will be the property owner(s). • The balance of trading and investment activity to ensure the company is wholly or mainly trading for BPR purposes. • The need for cash, and if it is tied up for future investment or debt repayment. • Whether the company will be the trading entity or a corporate partner with a specific role. • The taxation of benefits relating to a farmhouse. • The transparency of accounts in the public domain and the additional costs of managing them.

The use of a company, possibly as a corporate partner, can be appropriate where plant and machinery are owned by the company, which charges for its services to a landowning business (though this may need to be carefully considered in light of the proposals for reform of European Agricultural Policy with the introduction of a form of capping). However, depending on how it is set up, aspirations to maximise APR and BPR may not be met. Decisions in the Farmer and Brander cases have given more confidence to owners and their

advisers, with greater clarity in how businesses are judged as wholly or mainly trading. Also, after many years, there is now a more fixed interpretation of the agricultural value of farmhouses for APR, and more recently for BPR.

The first step in determining the best business structure is for owners to define their objectives, particularly their plans for eventual succession or sale, and also their risk profile. There is no ‘one size fits all’, but with aims as clearly defined as possible, the experts at Strutt & Parker and the client’s wider team of professional advisers will be able to provide solutions.

[email protected]

Quick guide to… tax rates

Income Tax: basic rate 20% (£0-£35,000); higher rate 40% (£35,001-£150,000); additional rate 50% (£150,000+), excluding the basic personal allowance of £7,475.

Corporation Tax: small profits rate 20% (up to £300,000); main rate £26%.

Inheritance Tax: 40% on death; 20% during lifetime (over £325,000).

Capital Gains Tax: basic rate 18% (within the basic rate band of £37,400); main rate 28%, excluding the annual exempt amount of £10,600.

Stamp Duty Land Tax (residential property): 0% (up to £125,000); 1% (£125,000-£250,000); 3% (£250,000-£500,000); 4% (£500,000-£1 million); 5% (£1 million+).

hmrc.gov.uk

Financial planning


in many cases people are paying more tax than they need to, and incorporation is the obvious solution


THE ROLLER-COASTER OF GOVERNMENT policy support continues for renewable energy. In October, the coalition announced a proposed 50% cut to support for solar PV (from 43p to 21p per kilowatt hour) from 12 December 2011 – 11 days before the consultation for this change closes on 23 December. The short notice of these changes has at best jeopardised and at worst halted a lot of projects that have been diligently worked up with a view to completion prior to 31 March 2012. This bolt from the blue will have a long-term impact on investor confi dence.

By investors I don’t mean hedge funds or corporate investors; I’m talking about private individuals, whether owners of houses, farms, country estates or commercial property, who have mostly been motivated by the opportunity to generate their own electricity and benefi t from the green credentials that go with it. The original level of support from the Feed-in Tariff (FIT) had allowed them to justify investment with trustees, business partners or family members, and to secure and fi nance bank borrowing to enable projects to happen. If it really has a genuine ambition to be the greenest government ever, it is this group of investors that the coalition needs to participate in the green revolution it wishes to see over the next decade.

With the economic challenges facing the government and the battles we are seeing between the Treasury and the Department for Energy and Climate Change over funding for the FIT, it is not surprising that we are increasingly seeing a move towards sticks rather than carrots for the delivery of energy effi ciency. With property required to score a ‘C’ rating on an Energy Performance Certifi cate from 1 April 2012 to benefi t from the FIT, the government has fi nally coupled the support payment to energy effi ciency – crucial if we are to meet our carbon reduction targets.

We have been advising property owners for a while now that, although there were opportunities under the FIT and we expect there to be opportunities under the Renewable Heat Incentive, now is the time to take a more holistic approach and consider them within the wider context of an estate energy strategy – one that not only considers the potential to generate electricity and heat, but also identifi es where and how energy is currently being used. As we see pressure growing over the next 10 years to meet emissions targets, along with rising energy prices and growing regulation, understanding your energy use and the effi ciency of your property will be crucial.

To remain ahead of the curve, now is the time to start preparing an energy strategy. This is not just a ‘nice-to-do’ exercise, but should achieve a number of positive outcomes, including identifying waste, reducing costs to increase or maintain profi t

margins in economically turbulent times, creating a marketing advantage by

establishing low-carbon credentials that may be attractive to new

consumers, and protecting investments and new ventures while also demonstrating good stewardship and environmental care. The remainder of the decade will be an exciting time as we go

through the ups and downs of the world’s economy, and

fundamental shifts in both fi nancial and energy policies.

[email protected]

Opinion Feed-in Tariff

‘the short notice of these

changes has jeopardised a

lot of projects that have been

diligently worked up’

Illu

stra

tion

: Cru

sh/a

genc

yrus

h.co

m

By Alexander Creed, Resources and Energy

Energy policy FITs and starts




It’s been in the family for seven centuries, but there’s a new buzz around the elegant Lees Court Estate in Kent that is set to secure the ancient Sondes family seat a place in modern 21st-century history.

Diversifi cation from traditional farming into non-food crops has been taking place within its 6,900 acres (including ownership of the Swale Estuary and Oare and Faversham Creeks) over the past few years under the careful stewardship of the American-born Countess Sondes, whose interest in nurturing the land intensifi ed after the death of her husband Henry George Herbert, the Fifth Earl Sondes, in 1996.

Much of the Estate’s soil is grade one and very fertile. A keen advocate of utilising the established

VARIETY SHOWSome unusual crops are fi nding their way into British soils – and helping to secure the future of farms and estates

LB6_p22-25_Diversification_Craig_Noel_des6.indd 22 12/12/2011 10:28

w

strutt & parkerland business autumn/winter 201123

Diversifi cation

SEEDS OF CHANGERobert Law is quite proud of the fact that he is one of only a handful of mustard seed growers in the UK. He farms the seed plants alongside other conventional crops – such as wheat, barley, oats, rye, peas, sugar beet and turnip – and enjoys the variety of also looking after small seed crops like mustard and salad rape at Thrift, his historic Hertfordshire farm. Robert’s bright yellow seeds are grown under contract to a merchant who then sells them on. At 40 hectares, the enterprise comprises around 3% of his acreage, and 3% of his income.

What’s the great attraction of growing something in such small quantities? ‘I’m on a grade three soil, and in a very dry area of the country, so I can’t grow big yields,’ Robert explains. ‘I’m trying to maximise my potential by growing other crops. Mustard seeds can grow easily and vigorously on the poorest land and, because they are a spring crop, I can grow turnips in the same fi eld over the winter.’ Although there isn’t a huge difference in the actual cropping, farmers who grow mustard can harvest brown or even black seeds, while Robert’s are yellow. ‘Like oil seed rape, mustard seed has bright yellow fl owers, can grow over six feet tall and provides good game cover,’ he says.

Diversifi cation is the name of the game in modern farming, according to Robert, who has been farming for 30 years and is the only member of his family to work in the industry (his father was a Suffolk solicitor). The downside of diversifying is that he often fi nds himself ‘swamped’ in the paperwork generated by looking after so many different crops and letting out various portions of his land.‘Thrift farm dates back to Roman times and there’s no way I’m giving it up,’ he says. ‘I’m doing what any modern farmer has to do – it’s called risk management. But I’ve reached capacity now and won’t be growing anything new.’

assets of the countryside in new and progressive ways, as well as ensuring they are marketed differently and creatively, Lady Sondes originally launched her commercial company, Seeds, with wheatgerm oil derived from wheat grown on the Estate. She went on to trial non-genetically modifi ed crops such as hemp, fi nola and quinoa for use in industry, pharmaceuticals, neutraceuticals, personal care products and biofuels.

Working with Charles Ireland of Strutt & Parker – the fi rm has been involved with the Estate for over 50 years, and advising the Countess on non-food crops since 2003 – Lees Court now grows echium and calendula for their fatty acid oils, which can be used in cosmetics and skincare products, and as an

VARIETY SHOW


-


Diversifi cationDiversifi cation

Wor

ds: C

ate

Dev

ine.

Illu

stra

tion

: Ker

ry L

emon

alternative to fi sh oils. Lady Sondes was awarded the fi rst contract to grow calendula in the UK, and has registered a patent for a combined echium-calendula oil for use in wound healing and cosmetic skincare. ‘This is quite a breakthrough because it’s an area that is usually done synthetically or through animals,’ she explains. ‘Growing it naturally is much better. We are very excited as it’s a very innovative aspect of agriculture and farming.’

Lees Court Estate’s ‘alternative’ crops are relatively small-scale compared to other producers, and the main competitor in the fi eld is Monsanto. But the farm has become a recognised centre of excellence for combinable crops, and Lady Sondes is convinced that nature can win out over genetic modifi cation (GM). ‘I believe that using natural products can accomplish many of the same goals as GM – but without all the risks,’ she says. ‘I am rather enjoying being David in a David and Goliath scenario.’

It’s also important that the non-food varieties compete with traditional crops in terms of profi tability, explains Charles. ‘Gross margins stand up against a yield of four-and-a-half tonnes per acre of milling wheat,’ he says. The price of echium oil has rocketed in recent months, from £2,500 to around £4,000 a tonne, and strong demand is predicted from the EU and the UK over the next year.

In addition to their natural benefi ts, the colourful crops attract plenty of wildlife. Calendula, which is a member of the marigold family, has pretty orange fl owers, while echium is spindly and quite prickly with blue, white and purple fl owers that can grow up to two feet high, creating a strong visual contrast to conventional crops. Lady Sondes says she enjoys the ‘changing colours of the countryside’.

‘We also see these crops heaving with wildlife,’ she adds. ‘There are butterfl ies, bees and other insects. Even to the eye you can see wildlife in many of these crops – as opposed to the fi eld of wheat, which is almost bone dry and arid. Biodiversity is important to all of us. It’s a total fascination to be involved in mainstream agriculture, while at the same time being at the cutting-edge of adventurous agriculture. One still feels like a pioneer.’

leescourt.com

BRANCHING OUT‘You can’t expect premium-quality Christmas trees to grow well in poor soil – you can only do it on good arable farmland,’ says Andrew Hamilton of Strutt & Parker’s Inverness offi ce. Andrew is factor of Fasque & Glen Dye Estate near Aberdeen, which last year sold 60,000 premium Nordmann Fir trees in the UK and Europe. ‘Fasque’s trees are not just shoved off into an awkward corner of the farm to provide extra income; we decided we would plant on the best arable ground and do it properly and professionally. We deer fenced 50 prime acres and planted the same acreage every year for a nine-year rotation. The trees are hand-pruned and inspected regularly for disease and pests. And at 2,500 per acre, that’s a heck of a lot of Christmas trees!’

Domestic demand is growing, and a predicted Europe-wide shortage of some fi ve million Nordmann Firs this Christmas – due to a combination of severe frosts and drought conditions – means the price is likely to shoot up. According to Andrew, the retail price for a premium seven-foot Nordmann Fir this year is around £70, with a particular shortage in larger sizes. But there could soon be competition from bigger growers in Poland, Denmark and Norway. ‘I wouldn’t be surprised if they started rapidly increasing Christmas tree crop on the fertile East European farming estates,’ he says. ‘The trees may grow faster in these deep soils, but you don’t really want them to grow too fast, because the branches become very open. People like lush, dense growth and Scottish-grown trees are good because the wet, wild climate encourages steady growth.’

About a quarter of the arable farmland at Fasque & Glen Dye is now used to grow Christmas trees; the rest to produce hardwood trees for garden centres, organic cattle, sheep and chickens, as well as crops such as oats, wheat and potatoes. Such diversifi cation is necessary for good estate management, says Andrew. ‘Not putting all your eggs in one basket is a safeguard.’


-


Opinion Planning system

‘communities are seizing the

initiative afforded by the localism

bill to infl uence planning within

their local areas’

Illu

stra

tion

: Cru

sh/a

genc

yrus

h.co

m

By Craig Noel, Head of Planning

Love thy neighbourhood?

Wor

ds: C

ate

Dev

ine.

Illu

stra

tion

: Ker

ry L

emon

THE PLANNING SYSTEM has been much in the news recently as the coalition’s proposed reforms begin to take shape. At the heart of the changes is the government’s move to replace more than 1,000 pages of national planning policy guidance notes with a single National Planning Policy Framework (NPPF), the draft of which runs to just 53 pages.

The approach has been broadly welcomed as bringing long overdue simplifi cation

to a contradictory and unwieldy set of policies.

The core of the NPPF is the so-called ‘presumption in favour of sustainable development’. This is a new take on an old concept. Right from the beginnings of the planning system in 1947,

when a landowner’s automatic right to develop was removed,

national planning policy sought to make amends by including a

presumption in favour of development. This approach survived various incarnations

of policy, until it was regarded as incompatible with the plan-led system of development that was introduced in 1992, when it was quietly dropped.

The reincarnation of this touchstone policy (albeit in ‘greenish’ garb) has resulted in speculation about the concreting of the countryside. However, an up-to-date Development Plan policy that restricts development should be suffi cient to counter any developer or landowner’s claims that the new ‘presumption’ should take complete precedence in decision-making. It should also be pointed out that the green belt policy is retained and unchanged.

As far as new plans are concerned, there is a welcome return to Local Plans, replacing the unloved and unwieldy Local Development Frameworks. These will be prepared on a 15-year timescale, with interim reviews. In addition to Local Plans prepared by local authorities, new Neighbourhood Plans may be prepared by parishes or duly constituted neighbourhood forums (approved by local authorities). Although

Neighbourhood Plan policies must be consistent with the council’s Local Plan policies, they will be fl exible so that communities will be able to determine which issues or areas are covered. Where they conform with the Local Plan, the new Neighbourhood Plan policies will take precedence. Also, a new Neighbourhood Development Order will enable communities to define specific developments, or types of development, which will have automatic planning permission without the need for any application to the local authority.

Many Neighbourhood Plans are already in gestation, with parishes and communities seizing the initiative afforded by the Localism Act to infl uence planning within their local areas. This is the ‘bottom-up’ antidote to regional planning with its overtones of heavy-handed government, unresponsive to the needs or wishes of local communities.

For housing, the main objective is to signifi cantly increase the delivery of new homes. Councils are required to identify a 10-year housing supply – ignoring the potential for so-called ‘windfall’ sites – and a 20% allowance to encourage choice and competition. The argument is that the release of more housing land will depress the value of scarce housing sites and improve the affordability of housing, at least in theory.

The NPPF refl ects the austere times in which it has been prepared, with a section headed ‘Planning for Prosperity’. This emphasises the need for local authorities to proactively support business and economic development, working to overcome objections to commercial schemes. Of all the policy changes, the concept of Neighbourhood Plans opens up opportunities for landowners to work together with parish councils on planning matters in a far more effective way. More than ever before, it is important to engage with local groups when contemplating development proposals, as there is every chance that they may be included within a locally prepared and endorsed plan, which district and borough councils will now have to sit up and take notice of.

[email protected]



Rural services

The complete property partner

Strutt & Parker was founded in 1885 by Edward Gerald Strutt and Charles Alfred Parker, who set out to provide estate management services. Today the business has grown to be one of the largest property partnerships in the UK, offering services and professional support in all aspects of property and land. As the business has grown and expanded into new areas, it has retained a belief in the value of professionalism, knowledge and client understanding to provide the best possible service. For a full list of services, visit struttandparker.com

Land Management DepartmentThe Land Management Department manages two million acres of land across the UK, acting for more than 600 retained clients across 450 rural estates of differing size and complexity.

We offer consultancy in:

FarmingWe offer the complete farming service and are proud to have worked with some landowning families for more than 100 years. Our team is made up of more than 30 experts, making us one of the largest specialist groups of our kind. We advise on the huge variety of issues that enable owners to manage and make the most of their land, and our bespoke service means you can come to us for as much or as little assistance as you wish.

Estates & Farms AgencyWe handle the sale and purchase of some 50,000 acres of farmland, residential and commercial farms, and sporting estates every year. We specialise in estates and farmland only, using national expertise and detailed local knowledge.

Rural contactsPlease contact your local offi ce to fi nd out more about our rural services.

• Strategic estate and rural property advice

• Agricultural and residential property management

• Planning

• Valuation

• Expert witness

• Taxation

• Compulsory purchase

• Landlord and tenant negotiations

• Minerals

• Telecommunications

• Renewable energy

LB6_p26-27_Contacts_v2.indd 26 02/12/2011 15:15


Contacts

banburyT 01295 273592E [email protected]

banchoryT 01330 824888E [email protected]

brighton and hoveT 01273 779649E [email protected]

cambridgeT 01799 533100E [email protected]

canterburyT 01227 451123E [email protected]

chelmsfordT 01245 258201E [email protected]

chesterT 01244 354888E [email protected]

chichesterT 01243 832605E [email protected]

cirencesterT 01285 659661E cirencester.landagents@ struttandparker.com

edinburghT 0131 226 2500E [email protected]

exeterT 01392 215631E [email protected]

farnhamT 01252 821102E [email protected]

glasgowT 0141 225 3880E [email protected]

guildfordT 01483 306565E [email protected]

harpendenT 01582 764343E [email protected]

harrogateT 01423 706786E [email protected]

haslemereT 01428 661077E [email protected]

horshamT 01403 246790E [email protected]

invernessT 01463 719171E [email protected]

ipswichT 01473 214841E [email protected]

kingussieT 01540 662020E [email protected]

lewesT 01273 475411E [email protected]

london head office*T 020 7629 7282E [email protected]

ludlowT 01584 873711E [email protected]

market harboroughT 01858 433123E [email protected]

moreton-in-marshT 01608 650502E [email protected]

morpethT 01670 516123E [email protected]

newburyT 01635 521707E [email protected]

northallertonT 01609 780306E [email protected]

norwichT 01603 617431E [email protected]

Key contacts

UK officesodihamT 01256 702892E [email protected]

pangbourneT 0118 984 5757E [email protected]

princes risboroughT 01844 342571E [email protected]

salisburyT 01722 328741E [email protected]

sevenoaksT 01732 459900E [email protected]

shrewsburyT 01743 284204E [email protected]

st albansT 01727 840285E [email protected]

stamfordT 01780 484040E [email protected]

winchesterT 01962 869999E [email protected]

*For full details of our London Residential offices, please visit struttandparker.com

Land Management James Farrell 01423 706770 [email protected] Farming Will Gemmill 01245 254607 [email protected]

CommercialPeter Hunt 020 7397 [email protected]

Estates & Farms AgencyMark McAndrew 020 7318 5171 [email protected]

Estate AgencyMichael Fiddes 020 7318 5192 [email protected]

London Residential Andrew Scott 020 7591 6690 [email protected]

Residential Development Simon Kibblewhite 020 7318 5177 [email protected]

Leisure & Hotels Colin Crosthwaite 01722 344053 [email protected]

Taxation Jonathan Smith 01273 407038 [email protected] AccountingShaun Spalding 01245 [email protected]

Planning & DevelopmentJames Youatt 01243 832602 [email protected]

ValuationsGiles Allen 01473 [email protected]

Building SurveyingJane Henshaw 01273 [email protected]

Property Wealth Management Andrew Yeandle 020 7318 5016 [email protected] Sporting Agency Mark Merrison 01635 576905 [email protected]

LB6_p26-27_Contacts_v2.indd 27 02/12/2011 15:15

struttandparker.com

LB6_p01-28_Cover_des1.indd 1 02/12/2011 12:37

lb6 p01-28 cover des1… · forms part of a long-term estate strategy, one that is nimble enough to...

Documents