Water & Leisure 2019 Market UpdateFenn Wright are leading experts in the valuation and sale of water and leisure related property across the UK.

Water & Leisure

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Overview 20182018 was a challenging year for many sectors of the property market, however demand for water and leisure property remained consistent.

We anticipated a reasonable supply of all property types coming to the market in 2018 and noted that many of these were due to retirement. We predicted that demand would match supply last year and overall, demand has been reasonably strong for those properties which were realistically priced. There were fewer properties offered for sale in 2018, which followed the trend in other sectors of the property market. There has been a degree of uncertainty created by Brexit, but we believe that this sector of the leisure market will remain robust.

In 2018 we were involved in the successful completion (or SSTC) of around 70% of property instructions in the £500k-£1m price bracket. This is an improvement on previous years and reflects the sustained demand for lifestyle properties with diversified income, predominantly in the form of holiday accommodation. We undertook over 100 site visits of various different water and leisure properties across England and Wales last year and have in excess of 2000 applicants registered with us who are looking for their perfect property.

Fenn Wright successfully sold a wide range of properties in the last twelve months, including:

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• Carp fisheries

• Coarse and trout fisheries

• Commercial fisheries

• Coarse Fish Farms

• Fishing rights (rivers)

• Former mineral workings

• Holiday complexes

• Private lakes

• Trout Farms

• Residential properties with water

• Water sports facilities

• Reservoirs

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In 2015, the Environment Agency examined the spending patterns and behaviour of 10,000 fishing licence holders to understand the market value of freshwater angling in England. The report analysed angling activity, expenditure, economic impact and non-market values associated with angling and the results were released at the end of last year.

Fenn Wright have seen first-hand the changes in angling trends through our clients. The shift in the average age of anglers, together with participation in different angling types is particularly evident from visiting day ticket coarse and trout fisheries, as well as speaking to angling clubs about membership renewals.

Environment Agency | Survey of freshwater angling in England

Key findings from the 2015 survey• A total of 22.5 million days were spent freshwater angling in England in 2015.

• Freshwater angling in England in 2015 contributed £1.46 billion to the

economy (expressed as gross value added) and supported 27,000

full-time equivalent jobs.

• Angling for coarse fish (as opposed to salmonids such as salmon and

trout) was the most popular with 19.4 million days spent in 2015.

• Carp were the most popular individual species, accounting for 7.4 million

angling days in 2015.

• Across all types of angling, almost 70% of angling days in 2015 were on

lakes, ponds or reservoirs.

• Anglers each spent an average over £400 on tackle and around £110 on

club or syndicate fees in 2015.

• Fuel and bait accounted for the bulk of expenditure on specific trips.

• Salmon anglers tended to spend more on annual memberships and

accommodation than other types of anglers.

• Most coarse angling trips took place between 5 and 25 miles from the

angler’s home.

• Anglers travelled significantly further for game fishing, with most salmon

anglers travelling at least 50 miles from home to fish.

• Geographical patterns of angling activity tended to reflect the numbers of

anglers living in the respective river basin districts. Visiting anglers,

however, made significant economic contributions in Northumbria, the

English part of the Severn and South West river basin districts (RBDs).

• The total number of freshwater angling days spent in England in 2015 was

22.3 million, a fall of 22% from the 2005 estimate of 28.5 million.

• Fishing was less frequent on all water types however the greatest decline

was seen on rivers and canals.

• From 2005 to 2015, the number of days spent fishing for salmon fell by

over half, particularly in the North West.

The EA concluded that the reasons for the general decline in angling activity

are complex and not yet fully understood.

Fenn Wright probably have the most comprehensive comparable database of sales and rental values for all types of water in the country.

Rental Values

A significant amount of water is rented by angling clubs, syndicates or individuals. The landowners are predominantly farmers, estate owners, utility companies or councils. Most water is either leased for years on a fixed term contract or held on a licence which runs from year to year and in some cases is just a verbal agreement. We have benefitted over the years from having seen numerous agreements drawn up by solicitors, but many are not fit for purpose. Some in particular make no mention as to the ownership of fish stocks or how improvements, for example otter fencing, are to be treated.

Rental values are normally fixed at the beginning of an agreement and often increased annually by the Retail Price Index. Agreed rents vary enormously across the country, often depending on whether or not the landowner took professional advice in the first place.

Rivers | Historically, most river fishing was let by its length with a rate applied. This methodology was suitable on those rivers where coarse fishing was the main sport and where the fishing was consistent along the length of the respective beat. This method is not appropriate for rivers where the quality of the fishing is influenced by natural features such as weirs and pools. At the top end of the market is prime barbel fishing and at the lower end, more modest, inaccessible river fishing for mixed coarse fish species.

Lakes and Gravel Pits | The rental value of inland water is usually calculated on an acreage basis. Water suitable for coarse fishing tends to be valued higher than if used for trout fishing. This partly reflects demand and that most trout fisheries are ‘put and take’, with the additional cost of stocking. In most cases smaller waters stocked by landlords command the highest rents and large gravel pits which are un-stocked often have the lowest rents.

Water Sports | Rental values are dependent on the water area, location and use. There is no specific methodology used for assessing values for these uses and from past experience we know that each site is unique.

Fish Stocks | The cost of stocking fish can be considerable and many clubs and individuals have stocked waters over the years without any reference in their agreement as to their long term ownership. We strongly recommend entering into an agreement, whether as a landlord or tenant, and that professional advice is sought on how fish stocks are to be documented.

Improvements | We have come across a number of cases where tenants have invested in various improvements such as otter fencing, which comes at a significant cost. With no agreement in place with the landlord it can become a contentious issue when it comes to apportioning cost. We regularly advise landowners and their respective solicitors to prepare agreements which reflect both the ownership of fish stocks and improvements, whether they are made by the landlord or the tenant.

Outlook | We are of the view that rental values have reached a peak and, in many cases, there is justification for a lower rent. Many angling clubs are seeing falling numbers in membership with the result that their annual income is dropping and this has to be reflected back in the rental values paid for leased water. However, the strongest demand is for syndicates looking to rent water for specimen carp fishing.

Fenn Wright regularly act for landlords and tenants in providing valuation advice for rent reviews, new leases and lease renewals on a range of asset types.

We expect the water and leisure market to remain stable in 2019, despite political uncertainty, with

an increase in demand for lifestyle properties.

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Outlook 2019One month into 2019, we have been surprised by the number of sale and valuation enquiries received. These do not necessarily translate into new property immediately entering the market, but activity has not slowed and there are a number of active buyers in the market. Whilst buyers requirements can vary, we have noticed that the relative scarcity of new property in this sector has resulted in buyers being more flexible in their search criteria, particularly in terms of location.

Despite obvious and ongoing political uncertainty, we believe this sector of the leisure market will remain stable as consumers will continue to pursue fishing and other water based leisure activities. Whilst the Pound is relatively weak against the Euro, staycations in the UK are likely to remain popular, benefitting domestic leisure businesses. The greatest demand is still for lifestyle properties or fisheries with an emphasis on specimen carp fishing. Fisheries which rely on pleasure and match anglers and which do not benefit from any other forms of income are likely to have a lower demand, unless they have potential to be developed and provide some form of holiday accommodation.

Planning is an area which frequently weakens a valuation or sale, but equally provides an opportunity to add value and/or increase marketability. This will continue to be important in the year ahead and we anticipate more property owners seeking planning advice prior to marketing.

We believe interest rates are unlikely to change significantly in the next 12 months, bank lending is still available on reasonable terms and for those looking to retire, Capital Gains Tax is at a historic low.

Tom Good - A qualified Chartered Surveyor with a BSc (Hons) in Aquaculture and Fisheries Management, Tom joined Fenn Wright in 2011. Having worked in fisheries and fish farming previously, Tom is an expert in this specialist area and can offer advice on all aspects of water and leisure properties across the UK.

tjg@fennwright.co.uk01206 216546

We’ve gotthe UK coveredFenn Wright’s Water and Leisure team have built a solid

reputation as experts in this niche area of property encompassing

fisheries and all water related properties. The team is made up

of Martin Freeman FRICS and Tom Good BSc (Hons) MRICS.

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Martin Freeman - Having managed Fenn Wright’s rural division since 1990, Martin specialises in water and leisure properties, and in particular, fisheries. Martin’s role has been to develop this part of the business, dealing with sales, valuations, professional and planning work.

mjf@fennwright.co.uk01206 216541