Rural Outlook 2019

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Rural Outlook SUMMER 2019

Court battles

Housing targets -








Contents 14


and there are Countryside Stewardship payments for their management



that could affect you this year

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PLANNING RULES TO ENFORCE BIODIVERSITY GAINS environment experts will be in demand




how to make a successful farm handover to the next generation

new generations and new angles


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we spot similarities with today’s tariff debates




PHONE OPERATORS ARE TRYING TO NEGOTIATE LOWER RENTS – but future levels of payments are now in the hands of the court


but confusion in calculating housing targets may mean some plans are open to change and challenge

DEVELOPMENT LAND SALES CAN HIT ALL SORTS OF CHALLENGES make sure a well-worded contract is in place to maximise returns



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letting Batcheller Monkhouse do the admin

Opportunity at a time of change The UK was due to leave the EU in March. This date then slipped to April and then May and, as we go to print, it might be any time up to October 2019. It remains to be seen if it actually takes place at all. How is any rational business to cope in such times of uncertainty? The simple answer is in the same way that we as an island nation have secured the fifth biggest GDP in the world, despite being 21st by population size and 78th by area size. Brits are grafters who analyse the known facts, make a qualified assessment of future risks and act on opportunities. The rural economy, and farming in particular, will not and cannot stand back and wait for the politicians to sort this all out. In putting together this edition of Rural Outlook we have looked very closely at where known risks and opportunities lie now. This might be remodelling the farm and allowing the younger generation, be this a member of the family or a new entrant, to take over. It might be in strategic land allocation for residential development or tapping into the growing tourism and drinks industries. As ever HMRC is always looking for new ways to increase its revenue and it is important to know what action is needed to minimise the tax burden for you and your dependents.

What is apparent is that the pressures on private enterprise, and the rural economy in particular, do not simply derive from our membership of, or departure from, Europe. We are already grappling with proposals from the UK government to reform agricultural and residential tenancies, amend inheritance tax rules and most recently, withdraw general licences permitting avian vermin control. At the same time we are seeing the reduction in permitted herbicides and fungicides which will change the farming landscape very rapidly indeed. As always the best equipped to take on board change will not only survive but prosper. We hope that the following articles will help shed some light on key areas and give food for thought to help you develop your businesses and livelihoods.

Leo Hickish, Head of Professional Services

Leo Hickish • • 01892 509281 Rural Outlook 2019


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2020 Septic Tank Regulations

Having backed down a few years ago the Government is now refocused on ending the practice of septic tanks discharging directly to a local watercourse. Under the General Binding Rules (GBRs) created by The Environment Permitting (England and Wales) (Amendment) (England) Regulations 2014 anyone with a septic tank discharging into a watercourse must replace it or upgrade it by 1 January 2020 or sooner if the property is sold before this date. It is recommended that all treatment systems are checked to ensure that they meet the relevant standards and have sufficient capacity.



to note for 2019 Countryside Productivity Small Grants Scheme (CPSGS)

The £30m CPSGS will reopen in 2019 to provide funding for purchases of new smaller items of machinery from a prescribed list. Whilst this was promised last autumn we now anticipate a delayed launch this summer.


NPPF Update

A revised version of the National Planning Policy Framework (NPPF) was published on 19 February 2019. The document does not include any significant changes but provides important clarity to councils on calculating five year housing supply against local need. Perhaps most significantly the revised document sets out that the presumption in favour of sustainable development will not apply where the plan or project is likely to have significant effects on habitats. A well-prepared environmental case can however override this potential hurdle.

Funding is between £3,000 and £12,000 to cover up to 40% of the purchase price. Eligible kit includes specific items for livestock farmers as well as precision farming and resource management equipment for arable farmers. This is one of the less bureaucratic grant schemes and worth consideration.


VAT Digitalisation


VAT registered businesses with a taxable turnover above the VAT threshold (currently £85,000) are required to keep digital VAT returns using Making Tax Digital compatible software from 1 April 2019. This means all businesses will have to keep digital financial records and file their returns from them, rather than the current system of submitting only the final calculated figure.


Homes (Fitness for Human Habitation) Act 2018

From 20 March 2019 landlords will be subject to new legislation which aims to boost the standard of rented homes for the health, safety and welfare of tenants. It means that tenants have a new route to request improvements with an implied covenant requiring all rented homes to be fit for human habitation. As with the EPC regulations, which caused anxiety for many landlords, these measures can readily be implemented cost effectively if well planned.


Changes to Capital Gains Tax

At the moment, if you sell or make any other qualifying disposal in the tax year 2018/19, any tax is payable by 31 January 2020 as part of the annual self-assessment cycle. This represents up to a 22 month payment delay. There is a proposal in draft legislation that from April 2020, CGT will be payable within 30 days of the sale, gift or disposal being completed. Ideally the valuer needs to be instructed in advance of completion to allow sufficient time to undertake the valuation and apportionments. Late filing penalties and interest will apply in case of failure to pay within 30 days. This rule change will be of particular relevance to anyone selling a private dwelling where part is not eligible for main residence relief from CGT. It is recommended that a robust assessment of CGT liability is prepared and submitted immediately on sale.


Countryside Stewardship Scheme

Signing up to the CSS could help bridge the inevitable funding gap which will open when basic payments start to fall in 2021, but before the Environment Land Management Scheme (ELMS) is available in 2024-25. Government has given assurances that if any future scheme is better than the mid-tier scheme then there will be an option to switch. Farmers can choose to make a full mid-tier application for maximum flexibility in terms of options. Alternatively they can apply for one of four wildlife offers where management options are limited but the application process is simpler. The deadline for requesting application packs is 31 May with a deadline of 31 July 2019.


Non-residential label will reduce stamp duty


Assets of Community Value (ACV)

HMRC had sought to raise the Stamp Duty Land Tax (SDLT) on a derelict bungalow from ÂŁ1,500 to ÂŁ7,500 arguing it was residential and a company was making the purchase. However, purchaser P N Bewley Ltd successfully argued non-residential rates of SDLT ought to have been applied, and so reduced the tax payable on the acquisition. Not only is it welcome to see the tribunal side with the taxpayer and encourage people to invest in this type of property, but it is important for estate agents and surveyors to understand the tax implications of the wording in their reports and marketing. It could mean a huge cost saving if a residential surcharge is not payable, or mixed type percentage is applied.

The recent case of Banner Homes Limited v St Albans City and District Council illustrates how the ACV scheme can scupper a development plan. In this case Banner Homes owned a field bisected by two public footpaths. For over 40 years the public would stray and use the field for recreational activities such as exercising dogs. A local residents association nominated the land to be listed as an ACV which was confirmed by the local authority. Banner Homes appealed the decision on the basis that the actual use by the local community was unlawful. An internal review by the local authority confirmed the listing and Banner Homes was unsuccessful in its subsequent appeals. The Court of Appeal did not accept that the actual use of the field by the public needed to be a lawful use. The learning is that direct and active measures must be taken to oppose and stop trespass as soon as it is identified.


Community Fibre Broadband

Communities where BT Openreach and mobile operators have failed to provide superfast broadband are turning to third party providers such as B4SH (Broadband for Surrey Hills) in the hope of eventually connecting to reliable fast broadband. If you are not in this catchment, and unwilling to set up your own community provider, you may be able to kick start improvements in your area by demonstrating your interest in upgrading by registering on the Community Fibre website run by Openreach. ( This also has a link to the government voucher scheme which helps to bring down the cost for property owners and occupiers.

George Chapman

Kate Richards 01798 877515 01892 509280 Rural Outlook 2019


The future of


The reality of no Basic Payment Scheme (BPS) income is sending shock waves through the farming community, despite the fact that this has been on the cards for years. This seismic change may however seem minor when compared to likely tariff and currency moves and climate change. Understandably these influences are driving a re-think of agricultural enterprises. From this re-think we can draw many positives and set up our industry for future prosperity. Although removing BPS is causing a massive shake up, for young farmers it could be seen as an opportunity. It has the potential to revitalise agriculture, open up opportunities for younger farmers to expand, enabling it to compete in a world market. It will take knowledge of husbandry, technology, markets and customers to make the difference. There is a lot of ticking-over farms. Even where the land is only suitable for livestock there is always something that can be done by a driven person to improve the productivity. Farm reviews offer fresh eyes and expertise to take a look at what works and what does not work as well as future proof the business. These reviews work through different scenarios: scale up; scale


down; change focus; rent land; let all or part of the land; diversify or sell up. If there is no need for the owner to be trading to maintain tax relief on the farmhouse then a tenancy, share farming agreement or contracting arrangement with another farmer might well provide the right solution. What is clear from our experience is that, contrary to popular opinion, there is strong interest in such opportunities from both established and younger farmers.

Lost generation There are lots of young people out there with drive and ideas and who are technically very good. They are searching for opportunities and desperate to be given a chance to show what they can do. A young tenant can revitalise a farm. These 25 to 35 year olds are very good at their job; technically minded; business savvy; knowledgeable and keen. Unless they are given the land to go out and farm a whole generation is going to be lost to the industry and agriculture will not move on as it needs to. In a tender for a tenancy on a 500 acre farm in East Sussex we received 17 formal tenders from farmers, all around the age of 35. There is so much talent out there waiting for the chance to make a go of farming. Even for those who want to carry on farming themselves a farm review can introduce new angles and ideas to use the land better. Different buying and selling policies of stock can turn a negative balance sheet into a positive one. Farmers are not alone in being slow to discuss succession planning. It has to be worked at, but many have successfully integrated their children into growing enterprises to provide an income for all involved. However, there are others who refuse to think about the next generation or face up to the decisions to be taken. As a result the next generation can become despondent and find alternative careers. It is a serious loss of skills and knowledge for farming. Similarly those looking to develop their own careers in agriculture have found the way forward blocked through lack of opportunity.

50 years relying on support payments Ben and Jo Foy, tenants of Brickhouse Estate At Brickhouse Estate, Etchingham we carried out an extensive farm review which started in 2017. As we went through the process - looking at the revenue streams; drilling down on costs and returns; speaking to accountants; looking at practices – it was clear there was plenty of scope to make good returns for the estate. The trust liked our ideas, including letting out a 500 acre block of grassland and buildings to a young farmer. After a tender process the new tenants took over in 2018. So in just over a year there was a new regime bringing life to a farm that had lost money for a number of years. The estate can now focus its resources on other income streams.


In some ways subsidies have not helped agriculture. They have allowed businesses to tick over, as they have not had to focus on making a profit from the core business. Farmers have relied on support payments for nearly 50 years, so a whole generation has always had them to fall back on. This has had the effect of stagnating the industry. You see a lot of land not being used to its best ability. So often a retiring farmer scales back, getting by offering sheep keep or cattle grazing and perhaps relying on cottage or barn rents. This usually means there is less and less investment in fencing or buildings. Few farms have seen proper investment in infrastructure since the agricultural development grants of the 1970s. The point is reached where a farm becomes so run down that the capital investment to get it functioning again becomes a real issue for the next person wanting to make a go of it.


“There is so much talent out there waiting for the chance to make a go of farming.”

One thing we can be certain of is change. BPS is planned to come to an end in 2028, with progressive reductions to payments starting in 2021, and Environmental Land Management Schemes (ELMS) phasing in as a replacement. Change can provide opportunities that will not only give us a better farming industry but will deliver a sound future for the family farm or estate.

Diversification propping up farming Diversification is often covering up problems in the core business, or even enabling the core business to continue. Focusing on the agricultural enterprises makes sense. It needs to be as profitable as it can be. That is how other businesses operate, and farmers need to have that firm resolve when addressing their biggest land use. There is always a need to review, assess and plan to be better.


land holders over 65


land holders under 35


of farms failed to make an income in 2016/17


of farms failed to make an income when unpaid labour was given a value


At Boxtead Lodge Farm the Apps Family has farmed for a number of generations. Richard Apps moved back home in 2016 after university. Since then, the farm has adapted the business in a number of ways: not only to make use of the opportunities they have available but also expand and future proof the business as well as creating a role for Richard on the farm. The family installed an AD plant. This plant not only produces electricity to sell back to the grid but also contract dries grain and woodchip for third parties. This makes use of the excess heat source produced from the AD process. In addition, Richard has driven the research into a straw based pelleting system produced from the combinable arable crops on the farm. The straw pellets cannot only be used in the AD plant but also as a valuable source of animal bedding. Over recent years the farming business has grown and adapted to a changing market from primarily an in-hand arable and sheep unit to an arable farm, AD plant, farm contracting and now soon to be a straw pelleting enterprise. Richard is 28 years old and although has benefited from having a family farm to return to his father has enabled him to grow within his role on the farm allowing him more responsibility as he gains experience.

Charlotte Pearson-Wood • • 01892 509280 Rural Outlook 2019


A short history of tariffs and why they matter

While the debate on Brexit splits parties and the country, we see from history that this is not the first time the debate over tariffs has caused resignations and demonstrations.

Michael Gove’s recent announcement that in the event of a nodeal BREXIT tariffs would be introduced to protect farmers in the livestock sector was greeted with fury in some parts of the Treasury with the former head tweeting “Mr Gove’s determination to protect British Farmers removes the best economic argument for BREXIT : cheap food……did Robert Peal repeal the Corn Laws for this? So why did Sir Robert Peel repeal the Corn Laws in 1846 and split the Tory party for good measure? A brief interruption to the war against Napoleon and a few good harvests had led to a drop in corn prices after 1801. In 1804 a corn law was introduced setting a tariff on imported grain and this was enacted “as the first attempt by a parliament of landlords to legislate purely in their own interest as owners of arable soil” - Sir Llewellyn Woodward “The Age of Reason”.

“dangerous to rely on foreign grains” Resumption of the war and a series of bad harvests kept grain prices high until 1814. Parliament appointed a committee to consider further action as prices tumbled. It took advice from the prominent economist David Riccardo who argued for the stimulus to manufacturing and trade from cheap food, and from the Reverend Malthus who believed it dangerous to rely on foreign grains. Familiar arguments which have echoed down the years. The committee concluded that grain cost 80/- a quarter to produce and parliament legislated on that basis to protect home production. By the late 1830s agitation had begun to grow against the principle of tariffs on foodstuffs. Richard Cobden, son of a Midhurst farmer, was one of the leading agitators against the corn law. Using modern communication methods, the penny post and cheap pamphlets, he


and the newly formed Anti-Corn Law League captured the popular imagination. “Bread-stealers, chawbacons and clodplate” farmers were reviled. The argument was as much against the “landed interest” as against tariffs. By 1845 Sir Robert Peel had been convinced that the repeal was necessary: a view subsequently reinforced by famine in Ireland. A cabinet split followed with resignations to be followed by Peel himself. He resumed power a fortnight later but his party split irreconcilably. As the measure battled through parliament his fiercest critics were from his own party, particularly Benjamin Disraeli. After five months of debate, the third reading passed the Commons on 28th June 1846 reducing duties to a nominal 1s a quarter. By the late 1870s the whole of Europe became locked into a steep agricultural depression. The cause was expansion of farming in America: US railways, the triple expansion steam engine and the binder. Between 1860 and 1880 US railways tripled. The triple expansion engine revolutionised steam shipping and the cost of carrying a ton of grain from Chicago to Liverpool fell from £3.7s in 1873 to £1.4s in 1884. With limited labour available to the pioneers mechanisation, such as the binder, enabled them to bring greater and greater areas into cultivation.

“the only chance for any young or enterprising person in the countryside was to get out of it.” Europe turned to tariffs to protect their farmers and rural communities. The two most industrialised countries, Britain and Belgium, did not. With no limit on imported wheat the price in England fell sharply from 56s a quarter in 1877 to 31s in 1888. The area sown to wheat fell by 28½% in the period: a million acres. “…the only chance was to lower standards...for twenty years the only chance for

any young or enterprising person in the countryside was to get out of it.” - Sir Robert Ensor: England 1870-1914. As tariffs grew then scope widened. Continental manufacturers argued successfully to be given the same protections as their farmers and increasingly British-made goods were priced out of more and more markets. Even the US, who had benefited from Britain’s free trade policies in agricultural products, introduced the McKinley tariffs in 1890 to protect her nascent industries. In 1882 the steamship ‘Dunedin’ delivered the first cargo of New Zealand mutton to London. Two years previously the ‘Strathleven’ had delivered 40 tons of frozen beef and mutton from Australia. A new source of competition had arrived and there was no prospect of the government intervening in the trade. Within a decade New Zealand was supplying two million carcasses a year. After a small rally in 1891 and 1892 prices then fell further to a low of 19s a quarter – a price not seen for a century. Rents fell again from a gross of £59 million in 1888 to £42 million in 1901. Whilst Britain had rejected without much political dissension calls for tariffs to protect home produced food during the 1870s and 1880s there rose in the next decade a new champion for the cause: Joseph Chamberlain. This charismatic and popular Conservative (ex-Liberal) promoted the cause of ‘Imperial Preference’ to establish the British Empire as a trading bloc protected like the EU by is own tariff wall. In doing so he ran headlong into the entrenched free trade views of the Conservative establishment. The Tory Prime Minister Arthur Balfour tried to strike a middle course and was shouted down from both sides. After much acrimony five cabinet ministers from both sides of the argument, including Chamberlain, resigned.

“the party swept to power in 1905 having successfully campaigned against food taxes.” To the Liberal opposition it was a godsend and the party swept to power in 1905 having successfully campaigned against food taxes. Once again, the Conservatives were out of office, not returning to government until 1915 when they were invited to join Asquith’s war effort. Unrestricted submarine warfare had brought Britain to the brink of starvation in 1917. In haste the government passed measures to protect home production and kept legislation in place after the war. Rents and land values boomed; and so did wages and prices. However, within a few years the newly elected Conservative government withdrew protection. Wheat that had sold for 80s 10d a quarter in 1920, had dropped to 42s 2d in 1923. Wages fell in line from 47s per week to 27s. The comprehensive round of tariffs introduced by Neville Chamberlain were designed to protect industrial goods. “Stomachtaxes” were unacceptable. In 1939 the lessons from the First World War had been learned and British agriculture was quickly on a war footing with emergency provisions prioritising the growing of cereals and potatoes in particular. After the war there was a general consensus that agriculture should not be allowed to fall back to its pre-war state and the Agriculture Act 1947 established a basis for the future. Along with technical support and capital funding there were to

Richard Cobden

“deficiency payments to provide support for production” be deficiency payments to provide some measure of support for production. This remained in force until 1973 when the United Kingdom joined the European Economic Community. The Common Agricultural Policy had evolved during the early sixties largely to placate the French and their prickly President Charles de Gaulle. This, by a combination of direct payments, intervention buying and tariffs created a free trade area within Europe and protected European farmers from external competition. It was quickly realised that the system was flawed, and a series of reforms have followed. The first priorities were to control costs and eliminate the surplus stocks caused by intervention buying. More recently under pressure from the World Trade Organisation, amongst others, support has been decoupled from production hence area payments rather than commodity payments are now made. There has also been increasing pressure to dismantle or reduce tariffs. This pressure will continue as the larger trading blocs lobby for access to the lucrative European market for their agricultural products. In or out of Europe this is a pressure that UK farmers are going to feel. Inevitably tariffs will reduce and import quotas increase in return for market access for European/British services and technology with the developed world. Whilst arguments over food standards will persist it is difficult to see why countries like South America can be excluded in the long term if they produce a product to the same standard and traceability. Tariffs have once again become a ‘hot topic’ as the US and China battle it out. History is not a guide to the future but it is a pointer. The tariff barriers created in the 1930s were a result and a cause of a depression which saw unparalleled unemployment in the coal pits of South Wales whilst the Brazilian railways were powered by coffee beans which could not be exported. Will the special exemptions that agriculture has, which allow for far greater protection than other products under WTO rules, be allowed to continue? Not if Donald Trump has his way. Will the Michael Gove view prevail? No and for the same reason as tariffs were rejected in the 1840s, 1880s and 1890s (and for food in the 1930s) an urban industrialised country will not accept ‘stomach taxes’. The “landed interest” ceased to count in 1846.

David Blake • • 01444 412402 Rural Outlook 2019


Elephant Poaching

Are tax reliefs becoming endangered species?

The Government plans to change tax regimes under the banner of “simplification”. But while we wait to see what this may bring, its stance on existing legislation appears to be focused on dismantling established “elephants”.

Tips to stay one step ahead of HMRC

1. 2. 3. 4.

Assess carefully and well ahead the likely tax arising on any future transaction.

Take remedial measures where appropriate to mitigate against such liability.

Present arguments robustly. A well-presented case, with suitable evidence, is far less likely to be challenged.

Be prepared. Where a challenge is issued, be prepared to stand firm and protect the elephant.

For example in the past it was pretty well understood what could be described as a farmhouse. This was known as the elephant test: something that is hard to describe but you know what it is when you see one. Admittedly it was subjective but nevertheless a pragmatic approach to this test was accepted by both parties.

The farmhouse definition challenged Agricultural Property Relief (APR) can deliver 100% relief from Inheritance Tax (IHT) when the deceased has owned and occupied the farmhouse for the two years prior to death. (And if let for agriculture it must have been owned for seven years.) However, we are now seeing even the most obvious and “appropriate” farmhouse is being questioned. These cases need to be robustly defended. A well-presented case will win. If, however, the case for the farmhouse is weak, steps need to be taken such as expand the farming business or make provision to meet a future tax liability. A further concern is amenity value. Following a tribunal decision in the Antrobus case, HMRC now seeks to impose IHT on 30% of the farmhouse value. This is a crude rule of thumb that we have shown in all instances to be a gross exaggeration of the “amenity” value argument. Next in the HRMC sights is the two year rule. Unless the deceased was actively farming almost up to the date of death APR on the farmhouse may be removed. Every effort must be made to demonstrate and prove that the deceased was actively farming throughout his/her life. Otherwise, appropriate steps must be taken to reduce the latent liability to IHT on death. The farmhouse can be a major sticking point where maintaining active participation on the farm is not practical or desired. Perhaps the older generation may need to move to another dwelling and rely on their IHT nil rate band (currently £325,000 each) and residential nil rate band (rising to £175,000 each) to reduce IHT liability.


Farmland must be actively farmed We are now seeing that, other than when the land is intensively farmed, HMRC is challenging whether the land is still in active agricultural use. In one recent case involving a 200 acre grassland farm the challenge arose because the client stopped keeping her own livestock and sold grass keep. We were able to make the case for active management. This is a common scenario and the argument centred around how much field work was necessary to demonstrate active farming. The lesson learnt is to ensure that the farmer can readily demonstrate a suitable degree of field work carried out by the farm: not simply maintaining boundaries and ditches.

Chipping away at the main residence Full relief from Capital Gains Tax (CGT) is given on the main or private residence when it is sold. The issues start to arise on larger houses or properties with more extensive grounds. Principle Private Residence Relief (PPR) is defined in the Taxation of Chargeable Gains Act 1992, as applying to the dwelling, gardens and grounds extending to up to approximately 1.25 acres. However, this is subject to the qualification that a larger area could be applied where such area is “required for the reasonable enjoyment of the dwelling”. In the cases we have challenged (see box) the key to success was an analysis of historic records, listed buildings principles and comparative analysis of similar property types. The work secured relief from CGT amounting to several hundred thousand pounds. With average house occupation having now risen to 15 years, and house price growth over that same period exceeding 50% the tax at stake is significant. From April 2020 the tax payer will only have 30 days to pay the necessary CGT and, if appropriate make their case for PPR on larger areas. Our concern is that more and more home owners will find themselves faced with expensive tax bills if not prepared.

Challenge to lower stamp duty One important concession in the recent stamp duty hikes was to allow a 5% tax rate on mixed use property, such as a house and farmland. But two recent cases highlighted that this elephant is also now under attack. Clients purchased a house with farmland, and applied the 5% mixed use stamp duty and land tax rate. HMRC challenged the tax basis which in one case was worth over £90,000. Quite extraordinarily the officer at HMRC was more worried about the status of the purchaser as opposed to the nature of the land. Batcheller Monkhouse was able to prove that the land was indeed agricultural and not amenity. The tax payer eventually won the case but after several months of unnecessary anxiety of the potential additional expense.

Lessons learned HMRC is routinely issuing the challenge on what would previously have been open and shut cases in the expectation that tax payers will capitulate and accept the increased burden.

HMRC challenged: Batcheller Monkhouse won main residence relief (CGT) for the following Listed house in landscaped gardens and grounds extending to 8 acres.

Country house with gardens, grounds extending to five acres, extensive outbuildings, a tennis court, swimming pool and private orchards.

Eight bedroomed country house with landscaped parkland of 20 acres, 300m long drive and entrance lodge occupied by the house keeper.

A rural dwelling with four acres of pony paddocks and stables.

But following advice (see tips box to the left), and a better knowledge of elephants than HMRC, the tax may not have to paid.

Leo Hickish • • 01892 509281 Rural Outlook 2019


Take a fresh look at

the value of woodland This is a good indicator of how DEFRA views woodland as it moves forward with the Environmental Land Management Schemes (ELMS). There is already a growth in public use of woodlands - large and small – and government will be keen to see further uptake. Activities might include adventure day trips, forest schools and camping.

DEFRA VALUES on woodland

Recreation and landscape


Carbon sequestration

£1.2bn Biodiversity

Brexit – imported vs homegrown timber

Air pollution absorption

Recent increases in woodfuel and timber prices have made it financially viable for more woods to be actively managed. Better use of our homegrown wood would help reduce a reliance on imports which currently account for around 80% of all timber used in the UK. For instance, we currently import more than 32,000 tonnes of firewood a year, mainly from the EU, much of which could be produced sustainably in the UK. After Brexit there are likely to be changes to prices of imported timber and firewood.

£0.8bn Millions of pounds are locked up in the UK’s unmanaged woods and forests. Currently only 59% of woods in England are under active management. Raising this to 75% would provide an extra £20m income annually to owners in terms of timber and woodfuel sales. But this is a fraction of the untapped environmental and social benefits which DEFRA values at £80m.



Once trees reach a certain maturity their ability to lock up additional extra carbon reduces. If they are harvested, younger trees already growing on the forest floor can flourish. The result is an overall increase in the carbon storage values. Responsible management plans within woodlands should ensure a sustainable renewal of trees either from natural regeneration or from underplanting.


Wood processing


There will also be value in providing habitats for wildlife from insects to mammals. Plus there will be some areas where trees will be seen as a valuable lung to clean air or an important sponge to absorb rain water. Provisional studies show that flood alleviation may be worth up to £250 a hectare in some areas.

This is against a background of increasing prices. Standing timber in the UK is worth twice as much as it was five years ago. After felling and extraction costs this has greatly increased the potential income from forestry works. For commercial woodland owners this creates great potential for increasing returns. Even ‘lop and top’ (smaller branches) now has a value for biofuels. Chestnut coppice is also seeing a growth in interest as many fencers move away from treated softwood products – because many treatments are banned - to chestnut.






DEFRA FUTURE FOCUS from tree health survey

Update the Ancient Woodland Inventory. Encouraging natural regeneration, species and provenance choice and management practices which improve resilience. Better integration of trees and woods within agriculture, including agro-forestry. Encourage diversification and promoted processes that underpin genetic adaptation and resilience. Promote public access, engagement and learning opportunities to ensure public value woodlands.

Support the Deer Initiative and Squirrel Accord.

Duty to consult prior to felling street trees.

Planning income streams

At a time when land management is frequently criticised for greenhouse gases, species decline and water management, woodlands present a great opportunity to provide positive news about the contribution land managers can make to moderate such problems.

The price increase may make work viable. In addition felling, coppicing and woodland restoration can bring great environmental benefits through habitat restoration and creation. There are existing stewardship grants – and ELMS in the future - available for woodlands, that owners should consider to see how they can play their part managing and creating habitat. We have also had success applying for grants that help owners manage public access, control diseases and cover the cost of professionally prepared management plans.

Occasionally, a policy of non-intervention is appropriate to meet specific management objectives, but in most cases woodland needs to be sustainably managed if it is to flourish and to be economically viable for owners to continue to maintain and plant them.

We assist in reviewing felling programmes, rescheduling works to take advantage of the income available and appointing contractors. Many estates are already taking advantage of this but the smaller woodland owners and farmers with say 20 acres of woodland at the margins of their land are yet to realise the opportunity. £30

As we head towards a future where farmers and landowners are expected to provide public goods and natural capital is valued, woodlands have an important part to play. The income opportunities can help facilitate a range of benefits to the woodlands, their owners and society as a whole.

Standing timber price £/cubic metre on the up
























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Alex Wilks • • 01798 877520 Rural Outlook 2019


Reaping rewards from

worms and pollinators

Farmers were disillusioned by the implementation of environmental stewardship which was badly managed by Natural England in the early days. But now is the time to revisit the schemes which really can offer the opportunity “to have your cake and eat it�.

The right scheme will not only secure financial payments but also increase productivity. There really is the opportunity to benefit twice from implementing pollinator habitats and soil improvement plans on your land. Under current and expected future policy, farmers who are proactive in these areas can receive income from grants for environmental work on top of maintaining the same – or possibly better - returns from the crops. Studies have shown that implementing soil health measures and providing habitats for pollinators can be done without reducing yields. In fact an abundance of earth worms can lead to a 25% increase in crop yields. This is particularly so in lower input systems as the positive effects of earthworms taper off when soil nitrogen availability is high. It seems that earthworms stimulate plant growth predominantly through releasing nitrogen locked away in residue and soil organic matter. These findings imply that earthworms are of crucial importance to fill the yield gap of farmers in a situation where nitrogen fertilizer cannot or should not be used.

Yield up with pollinators Here is another eye-catching statistic: providing land for pollinators can increase some arable yields by up to 35% (with beans being


the highest beneficiary). The research carried out at the Hillesden Estate in field trials over a six-year period demonstrated yields were maintained, and in some cases increased, when 3 to 8 % of the field area was taken out of production and replaced with pollinator habitat. If overall production can be maintained despite using a smaller cropping area then, in addition to the ecological benefit, the reduction in inputs on top of any stewardship payments means that the overall impact on farm profitability looks positive. While commentary on the importance of soil health and pollinators has been prevalent within certain areas of the industry for some years now, it is figures such as these that make more conventional farmers stop and take note. The majority would be only too happy to be able to improve their soils, the environment and abundance of wildlife on their holdings, if they believed this could be done while maintaining production and profitability. What the research behind the above statistics shows is that this may well be the case. Environmental improvement in terms of soils and pollinator habitat is a means of improving production rather than a burden. Support for pollinators is already firmly established in agricultural policy through the existing agri-environment schemes and BPS greening measures. Soil health is an area DEFRA have tried to

What is it that farmers should be doing? To benefit from increased pollination, the key aim is to maximise the number of nectar sources near crops, particularly beans and oilseed rape. The pollinator refuges must provide nectar throughout the periods when the crops are not in flower. This keeps the pollinators alive and within the vicinity, ready to be put to work on your crops. As for soil health, the key aim is to facilitate the development of a good soil structure, which improves aeration and water retention, and to increase the level of nutrients and organic matter in the soil. There are numerous steps that can be taken towards this, a few of which are highlighted below.



Avoid ploughing in favour of direct drilling or minimum tillage cultivation, which prevents damage to the natural soil structure and loss of organic matter as well as encouraging earthworms.

Try to avoid working land or grazing livestock when the ground is wet in order to reduce soil compaction and poaching.



Try to add as much organic matter into the soil as possible through use of farmyard manure, straw cutting and unharvested cover crops (green manure).

Avoid leaving soil bare and make use of catch and cover crops, which encourage earthworms and the roots of which improve soil structure and organic matter content.

influence before. However, the Soil Protection Review was unpopular and its only benefit appeared to be extra revenue for the Rural Payments Agency from cross compliance penalties. There are now numerous indications that soil health is going to be one of the cornerstones of future policy and it is something farmers should be considering.


What support is there to assist? The cost of adopting measures such as these should be covered in the long term by improvements in productivity and a reduction in necessary inputs. However, there is also support available from a number of sources which helps offset the initial cost. Support from government is currently available through the Countryside Stewardship scheme. This has a number of management options that support soil health and pollinators, some of which benefit from good payment rates that should cover the costs involved. Under the Basic Payment Scheme, catch and cover crops can be used as part of your Ecological Focus Areas for arable greening requirements.


Nectar flower mix - £511/ha


Flower-rich margins and plots - £539/ha

Looking forward, once fully developed, DEFRA’s new Environmental Land Management Scheme, due to replace the Basic Payment and Countryside Stewardship, will almost certainly contain provisions relating to improving soil health and supporting pollinators.


Winter Bird Food - £640/ha


Two year sown legume fallow - £522/ha


Autumn sown bumblebird mix - £550/ha

Private companies and organisations, in particular water companies, also often provide advice and run their own grant schemes for farmers within their catchments. Payments for ecosystem services is growing in importance as a concept and it is likely that there will be future opportunities for support available from a variety of sources for those who keep an eye out.

GS2 Permanent Grassland with very low inputs (outside SDA) - £95/ha

There is a wealth of advice and support relating to soil health available from the government’s Catchment Sensitive Farming initiative.

Ultimately, your soils and pollinators are two of your farm’s most important assets and it is in your interest to protect and enhance them. If this can be done through the support of a stewardship grant then all the better!


Management of species rich grassland - £182/ha


Winter Cover Crops - £114/ha

SW9 Seasonal livestock removal on intensive grassland £88/ha

Harry Broadbent-Combe • • 01798 877555 Rural Outlook 2019


Plan ahead to secure your

family farm’s future


to answer

Who is/are the primary successor(s)? Does the older generation want to retire – fully or partly? Who will live where? What income can all parties expect? What will be the job roles for the siblings? Do siblings want to continue the business or retain the assets but put in a manager? What is a fair payout to non-farming siblings? How will money be raised for a payout? When will changes happen?


Family rifts, poor farming decisions, loss of income and paying more tax than necessary are all consequences of failing to plan who will be running the farm in the future. There is everything to gain and almost nothing to lose by timely succession planning. In common parlance it is a “no-brainer”. Yet the sensitivities surrounding coming to a decision mean that too often the discussions that need to be had do not start until it is too late: children are disenchanted, farms run in a direction not suited for the future and siblings are left in a state of permanent jealousy and suspicion.

When to start succession planning It is never too soon to be talking about a generational shift of responsibilities and ownership, even if that may be a generation away. The discussions may take place on and off, and may proceed over a couple of years. It is a huge decision, and people need to think over their futures and discuss them over time to ensure all consequences have been thought through. Not everything needs to be done at once, so long as there is no imminent crisis. Careful, thoughtful steps and steady progress can benefit all parties. To ensure a full range of options is considered, a third party is a valuable asset. This person needs to have a good understanding of the individuals involved; how the farm works and what it might look

Succession planning need not be complex or expensive – indeed too much complexity is a bad thing – but stopping and considering the subject is always far better than inertia and the sooner the better.

“To ensure a full range of options is considered a third party is a valuable asset.”

like in the future. The external pair of eyes and ears must be trusted by all those involved to act as an independent arbitrator. At the same time the adviser is there to bounce ideas around and add knowledge to the discussions, without showing favouritism.

Step by step approach The first step is to talk to all parties individually and find out what they want to achieve; what they really want in life; and what future they see for the land and the family members. These discussions will produce the first building blocks. Inevitably some will have to be discarded, but some will create the foundations for the new structure. A lot of information comes out of these initial, informal chats. Family members can say things and raise ideas which they might not want to put in front of relatives. Even in close-knit families people make assumptions about their loved ones which can be completely wrong. An expert third party can assist here to ask those questions family members dared not ask or forgot to ask.

Mediator and guiding hand Taking on this role as third party your Batcheller Monkhouse land agent is in effect chairing the discussions. We bring experience into play, and advise on all the technical and legal ramifications of proposals. Once an outline plan has been put in place there is a need to deal with the practical changes; and of course taxation is at the top of the list. The taxable assets will fall into a number of different categories. The status of the land is one question, and is usually fairly straightforward. The tax position of the main house is more difficult. For instance, inheriting a £1,000,000 farmhouse could come with a £400,000 tax bill. Few people can pay sums of that size without re-mortgaging or disposing of assets – but with forethought they should not need to. Usually farms and estates have one principal house, and often the older generation are keen to move out of it and see their children (and grandchildren) using it as a family home. Taking a longer view allows such assets to pass between generations, and other homes to be built, converted, or bought or perhaps be rented out, to generate income, until they are actually required. If the older generation wants to remain in the principal house they must be able to argue that they are actively involved in running the farm.

Estate solution Every case is unique, and thus the answers are never the same. Batcheller Monkhouse handled a case where an arable farmer wanted to retire and split the assets and responsibilities between his three sons. A solution which met everyone’s ambitions was for one son to take on the arable farm itself. A second played to his strengths by managing the property arm. The third – who is passionate about outdoors sports – started a now very worthwhile mountain biking business which was created in the estate woodland. Thus the estate was preserved intact, all three brothers remained share-holders of the holding company. Their father could retire, delighted that his legacy is both preserved and prospering.

Family farm solution Many family farms are too small to support several siblings. Often in this case some may go and take on alternative careers while one remains on the farm. In a worst case situation the family may be faced with selling the farm to split inheritance equally. To head off this scenario the principle of sweat equity has grown. The sibling who remains and works on the farm in effect builds up equity in proportion to the difference between their actual salary or drawings and the commercial salary that might otherwise have to be paid to a third party. (See table) Trying to agree that figure retrospectively, following the death of a father or mother, is difficult, and is better worked out at an early stage.

Calculating sweat equity for a buyout The table shows how this might work for a £2m holding. In this instance the son who stays on to work on the farm accrues equity of £150,000.





Farm Worker – 5 years




Manager – 10 years






Sibling Share – Two Siblings


Sweat Equity


Cost of buying out non-farming sibling


Chris Tipping • • 01444 412402 Rural Outlook 2019


Batcheller Monkhouse

Telecom Sites under management


Courts deciding

telecoms contracts As predicted in our last Rural Outlook, mobile phone operators are using the new Electronic Communications Code to argue for reduced income for landowners. Rather than using the code to acquire new sites to improve rural coverage, the telecoms operators have diverted their attentions to driving existing rents down on lease renewals. Such action has meant that new mast installations have virtually ground to a halt across the country and goodwill between the parties has, at best, waned. The introduction of the new regime, regulating the relationship between landowner and operator, has brought the industry to a standstill where it is likely to remain while we wait for tribunal decisions. The new code was introduced on 28 December 2017 as part of the Digital Economy Act 2017. Its purpose was to enable more masts to go up and enable significant growth of the communications infrastructure. With the prospect of 5G technology and business success often dependent on fast digital communications, the government wanted to see operators investing in a more robust world-leading network to provide the public with a choice of high-speed telecommunications services.

New agreements plummet The reverse has in fact happened. Before the new code was introduced thousands of agreements were signed nationally. In the period between then and March 2019 we are told that only a handful of the new code contracts have been agreed across the UK. The lower the number of agreements being completed, the poorer the roll out of new or upgraded sites. The code was introduced by the government in the belief that landowners were holding operators to ransom by demanding high rents. The idea, under the new code, was that new rents would not be based on market value (say £6,000 to £7,000pa for green field rents and £11,000 to £30,000pa for roof top rents) but pinned to the value to the landowner and based on the requirement for a “no network” assumption. By removing any value attributable to the operator, average rents would fall and the operators could then use this saved money to invest in more mast construction and the latest technology. The government commissioned a report in 2013 to calculate the impact on rents (“Modelling the Economic Impacts of Alternative Wayleave Regimes”, Nordicity, 2013) which concluded that it expected values to reach an equilibrium at up to 40% lower than current rates.

“Operators continue to take an aggressive stance over rental values, and are interpreting the valuation provisions in a literal and, in our opinion, misguided way.”

Rent offers pinned to farming value Operators continue to take an aggressive stance over rental values, and are interpreting the valuation provisions in a literal and, in our opinion, misguided way. For instance, they are limiting their values to the patch of ground or roof the mast is built on. So, where a mast occupies a 50 square metre patch of grassland, they are offering rent of £5 a year or £50 for a 10 year term. This is the sort of sum they say it is worth in its existing state for grazing. They have not been taking into account the host of other areas of disturbance the landowner might suffer or the impact on the owner’s adjoining property. With operators seeking a drop in rent of one thousandth of its former rate and landowners predicting perhaps only a 40% drop in income, the stand off can be understood.

Operators enjoy wider rights The changes allowed by the new code do not stop at the price of agreement. They also enable the operator to have rights over the landowner’s adjoining property. The operators are interpreting this as enabling them to change the location of the mast to anywhere on the landowner’s property. Similarly, they feel that they have complete flexibility to build any height they deem necessary and restrict other wider development plans the landowner might have that might affect signals reaching the mast. To date, it feels as though the changes are being tightly controlled by the lawyers. The legal teams of the operators are holding firm over the interpretation of the new rights because they fear that any deals that might be struck will set a precedent for others to follow. Hence there are now 48 cases waiting to be heard by the Land Tribunal Upper Chamber. This is breaking new ground for the court system which only handled four cases over the 33 years of the old code. The cases are going through slowly. One case (CTIL v London Borough of Islington) did touch on the assessment of consideration (but not compensation) and declared a value of £1,000pa for a London roof top compared to the £21,000pa agreed prior to the new code being enacted. With only this and one other main judgement issued so far, also in the operator’s favour, agents representing property owners are anxious for the future. We await with interest further clear guidance from the court not only on the question of valuation but also on issues of entitlement to a new code agreement in the first place.

The “Access Test” Much of the contention in the tribunal is focusing around the wording of Paragraph 21 in the code – the “Access Test”. This considers whether the landowner will be prejudiced under the proposed agreement and whether that prejudice will be outweighed by the public benefit. Batcheller Monkhouse, like many other agents, is arguing that the landowners will suffer greater prejudice from the new agreement. This might be in terms of visual impact; access by contractors; and cabling across adjoining land. In some cases, the prejudice might be very Continued on next page...

Rural Outlook 2019


Telecoms continued...

5p a week offered for mast on farmland

48 cases

waiting to be heard by the Land Tribunal Upper Chamber


contracts concluded by Batcheller Monkhouse

Formerly £21,000, now £1,000 pa London roof top rent imposed by tribunal

Continued from previous page...

significant and the financial consequences difficult to assess. In one case on our books, the owner’s land could only be sold for development with vacant possession. Therefore, the presence of a mast and the proposed 10 year agreement (without break) had considerable repercussions.

Are existing contracts safe? Fortunately, the legislation is not designed to be retrospective. Existing or “subsisting” agreements can carry on with rents and site share income, if paid, continuing at existing levels. However, there may be knock on problems with existing sites. As we report above, operators are not using the new code to roll out new sites to improve their networks, but to reduce rents on renewal. Perhaps it is only a matter of time before they seek to terminate subsisting agreements mid-term and immediately seek to replace them with new code agreements at lower rents.

Given that the main purpose of the legislation was to improve the service for the public benefit, our view is that this objective is being lost as operators draw battle lines over rent and seeking draconian rights over property rather than simply getting on and upgrading existing or building new infrastructure. Was this really the purpose of the Digital Economy Act? Land and property owners are happy to support the quest for a greater connected Britain and are, in the main, happy to carry on with their existing contracts so that services can be maintained. After all, farmers depend on mobile communications to run their farms and equipment; and property owners depend on electronic communications for their businesses and tenants. They are all as keen as any other member of the public to see a state-of-the-art digital network.

GOVERNMENT POLICY OBJECTIVE The overarching policy objective is to reform the code to make it fit-for-purpose as a framework that supports the rollout of modern communications technology. By implementing the Law Commission’s recommendations, we seek to strike a balance between the contrasting interests of code operators and landowners, and also the interests of the public who require access to a rapidly evolving communications service. Broadband and mobile networks contribute significantly to UK economic growth and their success is premised on infrastructure provision. Reforming the code to work better for landowners and network operators will ensure that the agreements that enable this infrastructure can be more effectively facilitated, achieved and regulated.

Tom Bodley Scott • • 01892 509280


Housing targets

built on shifting sand Housing targets are a core part of local authority housing strategies, but confusing messages from central government have created uncertainty and left local authorities vulnerable to appeal from landowners and developers. On 24th July 2018 the government released the latest version of the National Planning Policy Framework (NPPF). The changes were vast but the topic which caused the greatest level of debate was how local authorities calculate their housing targets. The NPPF 2018 was supposed to create a greater level of certainty of how much housing was required. Unfortunately, it failed to deliver this certainty in the way we had hoped. The advice on the housing calculation failed to provide core definitions and details. Minor changes were introduced in February 2019 to help clarify the situation. This has resulted in further delays for authorities in the early stages of preparing their local plans.

What does this mean for local plans? The good news for authorities in the advanced stages of drafting their local plans was they were allowed to use the former NPPF guidance, if their plans were submitted to the Secretary of State by 24th January 2019. However this ‘grace period’ produced its own complications as many local plans were rushed through the system.

What does this mean for house builders and landowners? Unfortunately, these rushed plans are likely to require review almost as soon as they have been adopted. Therefore more local authority resources will be pumped into plan making and data collection, rather than focusing on delivering the large scale planning applications and infrastructure projects required. This may mean continued delays for developers. Also authorities are unlikely to be in a stronger position against speculative applications. Although there are clear downsides to this, it does provide continued opportunities for our clients who are looking to make speculative applications in broadly sustainable locations that may otherwise not be supported by the council. If you would like to know if these changes impact your land please contact our team for more information.

All local plans submitted by 24th January 2019 will be considered at examination against the March 2012 NPPF policies, which are now considerably out of date. Anything post 24th January 2019 will be assessed against the NPPF 2019 and must include the standardised methodology. Our main concern is that this has resulted in authorities rushing their plans through the statutory preparation process. This means their plans will either be found unsound at examination or, if adopted, they will only truly be sound and robust in terms of housing delivery for a number of months rather than years. These plans will either fail the examination process or will be too short term in relation to housing targets (with the promise of early reviews) to be truly effective. In the South East we witnessed Wealden, Tonbridge and Malling, Rother, Tandridge and Thanet all submit their local plans just in time for the January 24th deadline. Our planning team will be attending the majority of the examinations, representing a range of private landowners and developers. The sites we are currently representing in these areas could cumulatively deliver well over 1,000 new homes in highly sustainable locations.


Local Plan adopted pre August 2018 Local Plan submitted between August 2018 and 25th Jan 2019

Local Plan submitted pre August 2018 This map demonstrates the progress of Local Plan Local Plan under review but not yet submitted submissions in our core market area. It shows that a significant percentage of local plans were suddenly submitted between August 2018 and January 2019 to avoid authorities’ from having to reassess their housing targets to reflect the standardised methodology.

Harriet Richardson • • 01892 509287 Rural Outlook 2019


Finding the right value for

development land

Gaining a good return from selling development land is not easy despite a background of the government setting a target of building between 240,000 and 340,000 homes a year.


Topography, infrastructure, local authorities and demand will all have significant effects on the price and if and when any sale will actually be made. As a rough guide the price of development land generally tracks house prices. And the developers themselves are keen not to see a price drop in new homes, despite more availability, so they drip feed developments through.

Cheaper areas see bigger profits There is a growing level of demand from national housebuilders for sites located in traditionally weaker areas. A major factor in this has been the government Help to Buy scheme which offers assistance to those applicants with an annual household income of no more than ÂŁ80,000 who are not currently home owners. This has inflated the local market by as much as 15% where a significant number of properties meet the Help to Buy criteria. Batcheller Monkhouse acted on behalf of the landowners to secure a land promoter for the strategic site and provide advice on restrictive covenants. Catesby Estates was the selected land promoter and is now working with our planning department to submit a planning application for a 770 unit scheme. It is anticipated that the planning application will be submitted by Autumn 2019 at which point Batcheller Monkhouse will market the land for sale with planning permission in place.Â


Less attractive Difficult onsite conditions such as the topography, site clearance works, previous contamination issues, or flood alleviation schemes will increase construction costs and therefore decrease the land value. Similarly utility connection costs and higher Section 106 costs or Community Infrastructure Levy (CIL) costs, as well as the new Ashdown Forest Special Protection Area (SPA) payment which affects sites within the Wealden District make some sites less appealing.

Stage of local plan The current position of the Local Planning Authority also has a bearing upon values. A prime example of this is Wealden where, as a result of the Ashdown Forest SPA, there has been minimal development in the district over the last three years. This embargo appears to be lifting, with the first new development sites being granted planning approval. The dearth of permissions over the last few years has led to a pent-up demand and this should be reflected in higher land prices, as house builders will be keen to sign up for new sites in the area.

Who pays for planning applications? Landowners can go it alone, but given the costs usually associated with securing planning permission on a large scale scheme, finding a development partner is the usual way forward. This brings in their planning expertise and reduces the landowner’s associated risk.

Other parts of the agreement would include a cap on deductible costs. As the development partner funds the whole planning application they will then deduct their planning costs from the sum achieved for the land. It is vital not to let these costs escalate. The structure of any agreement can vary significantly and therefore the negotiation of the right terms is critical at the outset. We are often called in to advise on poorly worded agreements when the planning permission has already been obtained. In these circumstances, it is our role to negotiate the market value for the site. A poorly worded agreement can create significant uncertainty and make the task of agreeing the value almost impossible. Certainly the land owner would see a significant reduction in their sale proceeds.


These arrangements take one of two forms: an option or promotion agreement. Under an option agreement, the land owner typically gives the developer the right to buy the land either at a fixed price or by reference to a formula such as a percentage of market value on the grant of planning. The developer will typically pay an option fee on signing the agreement and then take on the costs and responsibility of securing a suitable planning consent. Under a promotion agreement, a specialist land promoter will be instructed to pursue a suitable planning permission and would cover the cost of the process. Crucially the promoter does not have the right to buy the land once planning has been obtained. The promoter is entitled to a set percentage of the sale proceeds together with agreed costs when the land is sold.

Promotion agreements bring results Selling the development site on the open market is a major advantage of a promotion agreement, as both the land promoter and the land owner are incentivised to maximise the sale price. In one case where Batcheller Monkhouse sold two thirds of a large scheme on the open market, our clients received 25% more per acre than the owners of the other section of the site whose land was acquired by a house builder under an option agreement. Sadly, all too often the assessment of market value under option agreements ends up in dispute causing substantial delays and incurring significant cost on both parties. Unless robustly drafted, or whether other circumstances dictate, our normal advice will be to adopt the promotion agreement route.

Avoiding the pitfalls Selling development land is fraught with issues and professional advice is highly recommended. Before signing any agreement with a development partner many questions need to be explored. One area is to ensure protection is built-in in terms of value. This involves agreeing a minimum which prevents the possibility of the developer effectively leaving the landowner with nothing. Setting a minimum number of units or minimum housing density in the agreement is a useful tool to ensure that the developer is maximising the value of the site to the owner’s advantage. This can in turn be tied to a minimum average plot value which, used in connection with the minimum land value, provides additional security to the landowner.

Following the granting of planning permission, Batcheller Monkhouse was instructed by the landowner and promotion partner to sell the site on the open market to a housebuilder. The site has outline planning permission for 183 units and a sale has now been secured to a national housebuilder.


Batcheller Monkhouse has provided advice to landowners and the promotion partner in order to secure planning for 103 units. The land is within the ownership of multiple landowners and therefore it was imperative to put in place a collaboration agreement as well as promotion agreement. The site has been granted planning permission and Batcheller Monkhouse will be bringing it to the market in Summer 2019.

Oliver Robinson • • 01892 509286 Rural Outlook 2019


Positive planning decisions boosting rural businesses

Destined for visitor accommodation at

Elbourne House

Over 60% of farms in the UK have now diversified in some way, with diversification projects now accounting for 22% of income on farms. This is only likely to grow with the prospect of reduced rural payments and the changing position of agriculture within the UK economy.

Visitor accommodation

The importance of such projects to the farming industry is now increasingly recognised within the planning system. The more recently prepared Local and Neighbourhood Plans take a positive approach to forms of economic development not traditionally found in rural areas. Such support alongside permitted development powers means the range of uses that redundant land and buildings can be put to is myriad.

Another similar project is Elbourne House in Washington where permission was granted to convert a domestic outbuilding into bed & breakfast accommodation. Adjacent stables and close proximity to the South Downs Way meant this would be a perfect location for walkers and horse riders wanting to explore the countryside.

The most popular diversification projects include tourism, storage, workshops, bespoke food and drink production and sales, and creative industries. All are typically well suited to a rural environment, with farm holdings offering a high quality and authentic environment. Opposite are some examples of projects that our planning teams have been involved in.


Tourism is a growth area in Britain. More people than ever are opting for a staycation but in many areas, for example the South Downs National Park, there is a shortage of visitor accommodation. Conversions of redundant farm buildings to form accommodation from bunkhouses to hotels or the introduction of camping on fields that are no longer needed are all popular projects which tend to be well received by planning authorities. One such project is the Manor of Dean, near Petworth, where permission was recently granted for the conversion and partial rebuild of redundant farm buildings to form a self-contained holiday let. The buildings are located close to visitor attractions, wedding venues and footpaths making them ideally located for the proposed use.

Commercial Commercial uses are the most common farm diversification contributing a significant amount to landowner incomes, as well as being a use that sits comfortably alongside on-going farming activities and generating jobs in rural areas.

Manor of Dean outbuildings to be converted to holiday lets. Wapsbourne Manor Farm is a former strawberry farm near Lewes which features a number of now-redundant farm buildings. Two such buildings were recently converted into offices and a storage unit as a form of permitted development. The buildings required little investment to enable them to accommodate their new purposes which are now providing a regular source of income for the landowner.

Destined for visitor accommodation at

Wapsbourne Manor Farm

Some planning authorities are willing to ‘trade in’ these permitted development consents for a new build scheme where there would be benefits in doing so, such as securing a better design or quality of accommodation.

Micro distilleries Around 150 micro distilleries have been established in the UK since 2015. Farms are popular places for distilleries as an authentic rural location adds to the marketing profile. Winning formulas often include brewery visits and tasting days. The Gin Kitchen, Dorking is a relatively new venture which has opened premises at Goldenlands Farm in Dorking. Facilities include a distillery, tasting room and shop. The business is going from strength to strength and plans to extend its offering to include an events room. There are many other possibilities for diversification projects. The only limitation is your own imagination!

Deer handling building to be replaced with three houses New build opportunity The residential conversion of farm buildings has been made significantly easier following the extension of permitted development rights which now allow for up to five dwellings to be created within a holding. Called a Class Q consent, such a project can help to raise cash to reinvest in the farming business, or provide a regular rental income to supplement farm income. A Class Q consent was recently granted for the creation of three houses within a former deer handling building on Old Camp Farm near Horsham.

The Gin Kitchen extends its offerings

Clare Bartlett • • 01798 877555 Rural Outlook 2019


Environmental factors to carry more weight


SANGs (Suitable Alternative Natural Greenspace) and SAMMs (Strategic Access Management and Monitoring) payments are routinely collected for developments impacting a Special Protection Area (SPA) such as the Ashdown Forest, Thames Basin Heaths or the North Kent Marshes.

Larger housebuilders adopting biodiversity gain policies

As the government looks at ways to achieve its long term goal - to be the first generation to leave the natural environment in a better state than it was taken on - more stringent planning policies relating to biodiversity are in the pipeline. While the government is looking to introduce policies to improve the environment in several areas, one of the primary missions is to introduce objective measures for securing biodiversity enhancement through development. In the 2018 update of the National Planning Policy Framework (NPPF) the guidance was revised to include securing improvements in biodiversity, directing “development to identify and pursue opportunities for securing measurable net gains for biodiversity”.

Wealden District Council is currently committed to implementing a financial tariff to assist in preventing further degradation of the Ashdown Forest SAC by reduced air quality, which runs alongside the SANGS and SAMMS payments already in place for the forest.


biodiversity metric

The DEFRA consultation’s proposed method of assessing biodiversity impact is to use a metric which scores different habitat types (eg woodland, grassland) according to their relative biodiversity value and adjusts this depending on the condition and location of the habitat. Different habitats within a development site are assessed for their biodiversity against a standard set of criteria – distinctiveness, condition, strategic significance and habitat connectivity. Then a calculation using the scores and the area of the habitat gives a number of biodiversity units that represents the value of that habitat parcel. Collectively across a site this provides the baseline position. The calculation is run again for a post-development scenario taking account of any on-site measures to retain, enhance or create additional biodiversity.


The ‘post development’ units are then deducted from the ‘baseline’ units to give a value for the extent of change. If a ‘net gain’ is achieved on site there is no need to consider off-site measures. However, if there is no scope for additional on-site compensation or enhancement, off-site measures will need to be considered. The metric assessment supports the existing principles of the mitigation hierarchy to avoid, minimise, remediate and compensate. In practice and in policy the hierarchy sees compensation as a last resort. Therefore off-site measures to secure net gain should only be needed where gains cannot be secured on site.

Local authorities already boosting biodiversity

where they cannot secure on-site biodiversity mitigation. The set tariff is likely to be linked directly to the quantified unmitigated loss in biodiversity.

A standardised method of calculating biodiversity impact has been the subject of a number of pilot schemes over the last few years. Some local authorities are already using their own varying methods. For instance Warwickshire, Solihull and Coventry have adopted mandatory biodiversity net gain policies.

A standardised approach is likely to give more certainty to developers when looking at development economics, programming and delivery. However, there will be higher up-front costs involved in dealing with biodiversity assessment and mitigation. Also introducing the tariff element has the potential to place yet another cost on development. Where we are acting for landowners, this will be of particular interest as any additional upfront costs will be factored into the price offered in development land deals.

The Government would like to see one consistent approach to be applied across the country. This was the subject of a consultation by DEFRA in the early part of 2019. A standardised approach to calculating the impact of development on biodiversity is intended to secure improvements in biodiversity, rather than simply mitigate the effects. A target 10% net gain was put forward in the recent consultation. Most developers and local planning authorities (LPAs) already seek to provide environmental improvements through well-designed development. However, outcomes are largely subjective and based on individual professional opinions. There is no attempt to actually measure losses and gains. While the details of the scoring system (metric) are yet to be agreed, a standardised approach should provide a more transparent and clear means of calculating biodiversity loss and gain. This will ensure more consistent delivery of net gain which is happening sporadically across the country now.

Larger housebuilders get ahead with eco gains Some of the larger national housebuilders are gearing up for this and have their own internal policy for securing biodiversity gains. Berkeley Group in particular has committed all new schemes from May 2017 onwards to create a net biodiversity gain. It already has experience in delivering high quality, biodiversity rich developments such as Kidbrooke Village in Greenwich. The most controversial part of the consultation suggests developers pay a financial contribution on a tariff-based system in scenarios

The principles of the approach are sound. The proposals should work well if clear guidance and policy is given; the process is managed properly and consistently; and developers positively embrace the extra requirements. Implementing such changes to the way in which the planning system deals with biodiversity impact undoubtedly calls for a new generation of biodiversity experts working for both developers and planning authorities.

“a positive step to meet environmental objectives” Critical to the success will be LPAs having the funding to employ the professional ecological expertise to make the assessments and to enter into meaningful and constructive negotiation on mitigation. At a time when local authorities are experiencing record lows in funding this could be challenging. Nevertheless, securing a more rigorous means of testing biodiversity impacts and securing improvements would be a positive step forward to meet sustainable development and environmental improvement objectives.

Kirsty Castle • • 01892 509287 Rural Outlook 2019


Market keeps calm

and carries on

A glance through the last five years shows that each year has brought its own share of upheaval. However, despite the political uncertainties at the start of 2019 there were record numbers of viewings across all of our offices and it looks as though if people really want to move they will. In January and February 2019 there were 609 viewings. This was 9% more than 2018 and 80% more than 2017. There is little doubt therefore that, whilst there has been so much disruption over recent years, the British public has become resilient and definitely follows the mantra “Keep Calm and Carry On”. Another factor is that with several years of stable or lower prices a new wave of buyers may feel that the market has bottomed out. This presents opportunities for sellers as well and there is more of a ‘can do’ attitude evolving where ability to proceed is often as important as price.

Selecting the right buyer A cash buyer with nothing to sell often makes for a less complicated sale. Too many sales flounder when caught up in a lengthy conveyancing process and our advice is generally to select a buyer who has the least associated risks.

Attracting those buyers in the first place is where it is important to have an agent that understands the market and where flexible pricing has a role to play.

Realistic pricing pays There is no doubt that we are working in a choosy market. Buyers are more sensitive to pricing. Those properties new to the market, which have been priced with a full grasp of the current conditions, are selling quickly to motivated buyers. Those still available from last year are generally facing a reduction in price or are opting to withdraw from the market completely. Given the current strong list of potential buyers, most already living in the south east, the properties that have struggled should see a new lease of life with a flexible approach to pricing.

Multi-discipline approach adds value Batcheller Monkhouse has a variety of in-house professionals working closely with our clients’ solicitors. Being proactive in finding solutions to issues may involve assisting with planning irregularities or other sales barriers, such as rights of way and boundary issues. Having access to professional planning advice can be invaluable. For example, in a recent sale we were able to lift an agricultural tie that had gone under the radar - this is a prime example. Had the restriction remained the market value would have been reduced by around 20%. But through our success the vendor was able to hang on to the sale at the original offer.

Health check before marketing



There are many issues that may crop up on a sale and so a legal health check is highly recommended before placing a property on the market. All title, covenant and boundary documents should be checked through. If any building work has been undertaken it is essential to ensure all planning consents are in place and that completion certificates have been obtained. We have seen that confidence in the economy can easily change in a short time eroding the purchaser’s confidence, and resulting in a sale falling through or a reduction in the offer. A recent example saw a reduction of £80,000. The key is to do everything possible to keep the conveyancing time tight.

Tubwell Farm, Maynards Green Guide Price £1,100,000 - £1,300,000

OUR TOP TIPS • Remain flexible on price. Being realistic does not mean selling cheaply • Avoid pitfalls with thorough preparation • Consider the quality of buyer as well as price • Engage a solicitor experienced in your type of property

Simon Henkel • • 01444 453181



Buyers are busy

Summerhill Barn, Five Ashes


Buyers in waiting are on the up. Our current list of potential buyers at the beginning of 2019 is in fact four times larger than it was at the same stage in 2017.

Guide Price £1,250,000 - £1,350,000

So despite the political uncertainty and the slowdown in the London residential market there is still a ground swell of demand as people try to plan the next stage of their life.

The towns we cover are highly sought after in their own right, with character and good road and rail links. Over time we have found that buyers extend their search to encompass surrounding villages and this radius expands year on year. Our reputation as both town and country agents ensures that we are best placed to secure a deal.

Guide Price £925,000


Whether looking for a town or village property demand is partly fuelled by those moving to achieve a “lifestyle change”. Young families might prioritise educational options, whilst retaining a commute to London. Different amenities will suit different age groups. For instance older couples might want to downsize to a smaller house and garden, within walking distance of a tea room, entertainment or general store. Importantly there are so many variations within the catchment area of our offices - large and small, terraced houses or semis – that there is plenty to suit all budgets.

17 Blunts Wood Road, Haywards Heath


Applicants living in London have dropped by 15%, however this drop has more than been made up for by people already resident in the South East wanting to move to one of our market towns. With this broad selection of buyers Batcheller Monkhouse has a robust database of house movers waiting for the right property to come on the market.

Grecian Road, Tunbridge Wells Guide Price £550,000 - £600,000

Mark Haffenden • • 01892 512020 Rural Outlook 2019


More activity ahead LAND PRICES PER ACRE Per acre:


A busy second half of the year is anticipated as potential sellers are likely to decide to get on with their plans, following months of uncertainty. However the uncertainty did not put a dampener on demand for land and farms in the South East over the previous year. Both global warming and buyers looking for tax advantages of rolling over returns from development land sales have produced this demand. Another factor has been the low number of farms and land parcels coming to market as sellers waited to see what Brexit might bring.


Many buyer types in play £5k


Grassland Grassland Woodland Woodland <10 acres <10 acres

© Batcheller Monkhouse Research

Much of the land that did come to the market through 2018 was snapped up for viticulture. South facing land of free draining green sand or chalk is well-suited to vineyards. And with the prospect of Central France becoming too dry to make the best Champagne, many producers have set their sights on the South of England becoming the best growing conditions for sparkling wine. Small investors have also been getting in on the act, hoping to make their own mark on the expanding market. All land still remains a useful long term investment as values have risen steadily over the past 10 years, particularly land adjoining ones own property is a significant asset, as it can add value or aesthetics or peace of mind. Another strong group of buyers is those wanting to invest in land to gain Agricultural Property Relief. Once invested in horticultural, agricultural or forestry land the money is no longer subject to Inheritance Tax. This has always been a mainstay of the market, and continues to be a significant factor in holding prices firm. Institutional buyers have also been active, speculating on what might be development land in years to come. The only type of buyer who has been struggling has been the farmer looking to expand. He/she will usually have to borrow to take on the extra land, and lenders have been cautious. This has led to farmers not always being able to offer what others might be able to.

“Another strong group of buyers is those wanting to invest in land to gain Agricultural Property Relief.” Lepride Farm, Henfield 148.2 acres of pasture and woodland with period house and buildings Guide Price £2,600,000


So with a large range of buyers and a shortage of farms or land coming to the market, prices are firm. Commercial farm land has been making between £7,500 and £10,000 an acre. And small blocks, of say 10 acres, are achieving £10,000 to £15,000. Small woodland plots continue to be popular as they provide affordable recreation opportunities, or tourism concepts. This might involve camping, walking, treetop activities or outdoor living skills.

 Ready to burst Writing this in early April there is a definite feeling of pent up activity. There are many potential buyers waiting for the right land to come on the market, and potential sellers show signs of being fed up with waiting for the political situation to become clear, and as the Agricultural Bill progresses through parliament the future for farming will start to take shape.

Bough Oast, Burwash Weald 141 acres of farmland with oast house Guide Price £2,000,000 - £2,200,000

Court Lodge Marsh Farm, Hooe 96 acres of pasture land and 10,000 sq ft of agricultural buildings Guide Price £725,000

Coming Soon

between Tatsfield and Biggin Hill 144.3 acres of mixed farmland, two 3-bedroom bungalows and two large agricultural barns Guide Price £2,600,000

Russell Parkes

Matthew Braxton 01798 872081 01424 775577 Rural Outlook 2019


Admin burden for renting grows

Honeywell House, Langton Green Rented for £5,700 PCM

In 1989 the UK’s private rented sector stood at 7% of total housing. It is now at 21% and industry sources predict that by 2050 it will be 50%. To a great extent this growth can be credited to the relaxation of lettings legislation and the Housing Act 1988, which brought in the Assured Shorthold Tenancy. At the same time the Right to Buy, permitting qualifying tenants to purchase the freehold of their council house, has been in full force resulting in a sharp decline in the public rented sector. The private rented sector has clearly risen to the challenge and continues to grow. At the same time, however, regulation and taxation issues have become more onerous. In the UK rented accommodation was originally designed for people who could not afford to buy, rents were low, and the standard of property was often poor. There was little or no safety legislation and thus the role of the managing agent was far less onerous.

Spire House, Catsfield Rented for £1,375 PCM


The Assured Shorthold Tenancy greatly boosted the residential lettings market and provided an important incentive to landlords to invest in providing better property. Prior to that date it was not uncommon for poorer quality residential property to be demolished rather than re-let, due to costs of refurbishment and low rents. Agents and landlords now have to do ten times more work than they did and the risks associated with letting a property are much higher, but at the same time rents have increased, and now provide an appropriate return on the landlord’s investment.

Changes started with gas legislation in 1995. Letting became much more complicated in 2005 after the introduction of houses of multiple occupation (HMO) and deposit tracking legislation. Also a significant burden introduced in the 2004 Housing Act was the Housing Health and Safety Rating System. Recently safety has been ramped up again in several areas. There have been provisions to avoid Legionnaires disease, check smoke alarms, check identity documents and provide “How to Rent” guidance.

“It is more important than ever to have the correct paperwork in

The Summer House, Pulborough

place as fines and penalties have

Rented for £895 PCM

been increased. Fines can be up to £30,000 and significantly errors can lead to the loss of right to gain possession of property and even imprisonment.”

The Minimum Energy Efficiency Standards (MEES) were brought in in April 2018, restricting lettings of F or G rated properties. This caused a few headaches for listed or older properties. There has also been a lot of scaremongering on the costs of meeting these standards. Our experience is that in many instances there are simple improvements, like insulating the loft, that can be carried out to improve the rating.

Radar House, Wartling Rented for £1,250 PCM

The key to success is to attract and retain the right tenant at suitable rents. The increasing legislative burden can seem daunting. Some private landlords have already voted with their feet and sold up. On closer analysis, however, this is normally due to poor tenant selection or failures in management. Our experience remains that well managed property can continue to make the residential sector an extremely useful source of investment. It is more important than ever to have the correct paperwork in place as fines and penalties have been increased. Fines can be up to £30,000 and significantly errors can lead to the loss of right to gain possession of property and even imprisonment. Dealing with this legislation on a daily basis means Batcheller Monkhouse can not only ensure that all the necessary boxes have been ticked, but that the cost burden is kept to a minimum and yields maintained or even improved. Whether you have a flat or a farmhouse, seeking the advice of a professional agent will ensure you are compliant and stressfree every step of the way.

Arun House, Pulborough Rented for £1,995 PCM

Clare Sheffield • • 01424 236145 Rural Outlook 2019





































Haywards Heath


Tunbridge Wells

01424 775577

01444 412402

01798 877555

01892 509280


Anything but standard Secured against your land, our Standard Loans can offer you more. Available for 5 to 30 years and without annual reviews*, so you’re free to get on with what you do best.

Talk to Batcheller Leo Hickish 01892 509280 Chris Tipping 01444 412402 Alistair Cameron 01798 877555

Monkhouse Tunbridge Wells Haywards Heath Pulborough


to AMC credit criteria and your obligations to AMC continuing to be met. The Agricultural Mortgage Corporation plc. AMC loans available for business purposes only, provided on a secured loan basis. Minimum AMC Standard Loan ÂŁ25,001. To meet customer requirements, lending criteria will vary. Lending is subject to status. We adhere to The Standards of Lending Practice which are monitored and enforced by the LSB: Rural Outlook 2019



Haywards Heath

01424 775577

01444 412402


01798 877555

Tunbridge Wells


01892 509280

Mayfair Office

Batcheller Monkhouse offices Battle

Tunbridge Wells



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