Galbraith Rural Matters Summer 2021

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Regenerative agriculture What is it all about?

New life for old buildings Life in lockdown for a graduate rural surveyor Land use vs. land ownership A conversation with W P Nel

Summer 2021

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Traquair House A rural business in the heart of the local community

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New Life for Old Buildings

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Support for farmers in a difficult year

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Alistair Christie in Conversation with WP Nel

10 New wedding venue the icing on the cake for Rosebery Estates

Welcome to Rural Matters As this latest version of Rural Matters goes to print, we are in full grip of spring with the blossom appearing on the blackthorn, cherry and hawthorn trees and hedgerows. It’s a wonderful time of year as the farming year explodes into life!

13 Dipping your toes into Reservoir Ownership 14 Navigating Natural Capital 16 Valuation of Fishing...

A Finely Balanced Task 18 New & Extended Permitted Development Rights in Scotland 19 Life in Lockdown for a Graduate Rural Surveyor 20 Food, Fun & Farming 23 A House in the Country...

You can Bet on It

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ow to make the best use of land is the question that people who live and work in rural areas repeatedly ask themselves. For many of them, their livelihoods depend on answering the question successfully.

Climate change, post-CAP arrangements, natural capital, biodiversity net gain, regenerative agriculture, new legislation and regulation are all recurring themes that exercise the most imaginative of rural minds.

But where lies challenge, lies opportunity too and it is immensely heartening to see the enterprise and innovation that helps rural businesses survive and thrive.

We hope that this edition of Rural Matters will provide you with some excellent examples of business success, together with stimulating insight into issues that are front of mind.

With best wishes to all our readers, Ian Hope

Ian Hope 07968 209 543 ian.hope@galbraithgroup.com Head of our Rural Department

24 Market Analysis 27 Morton’s Milk 28 Regenerative Agriculture – What is it all about?

29 Future of Farming 30 Land Use vs. Land Ownership 32 Changes to Fire Regulations Scotland 34 Torrisdale Castle Estate Coping With Covid 35 The Electronic Communications Code

Galbraith is a leading independent property consultancy.

Drawing on a century of experience in land and property management the firm is progressive and dynamic employing over 200 people in offices throughout Scotland and the North of England. We provide a full range of property consulting services across the commercial, residential, rural and energy sectors. Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.

Follow us on twitter: @Galbraith_Group Like us on Facebook: www.facebook.com/GalbraithPropertyconsultancy See us on instagram: www.instagram.com/GalbraithGroup Join us on Linkedin: www.linkedin.com/company/galbraith

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Now is the Time to Take Control Last year and the first quarter of 2021 have, without doubt, been challenging and have driven a significant amount of change - even within the agricultural and rural sector. COVID-19 has certainly prompted kitchen table discussions regarding succession and future planning for businesses.

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uccession planning is a topic often avoided for the simple reason that people can be reluctant to discuss the matter, with younger generations feeling it isn’t their place to mention it or are unwilling to pluck up the courage to raise the issue. Many decisions are being made regarding the direction of travel of businesses and there is a feeling that senior generations are now becoming more accepting that the ‘young ones’ should be given their place and allowed to drive things forward.

With change comes opportunity and the chance to consider options around such issues as personnel, diversification, enterprises, partnerships, financial strength and investment.

Many of these decisions require capital expenditure or restructuring of existing debt into a more streamlined and consolidated package.

The Agricultural Mortgage Corporation (AMC) specialises in

rural business funding and is focused on long-term borrowing between 5 and 30 years. The margin of a loan from AMC is guaranteed for the full term without the risk and uncertainty of breaks or renewals.

This sets it apart from other banks, which tend to set 3, 5 or 10-year reviews at which loans or lending margins can be renegotiated and additional fees charged. Depending on the specific bank's appetite, it can also result in the re-calling of a loan at that stage. As always, the devil is in the detail of the small print.

This certainty on margin on a loan from AMC provides a significant amount of peace of mind, knowing that the loan terms will not alter.

Confidence in investment is key and this can be an excellent facilitator whether looking at capital investment in land, property or infrastructure. AMC prides itself on providing its borrowers with the funds required, while letting them get on with running their businesses.

A wide variety of loan structures are available to fit the borrower’s specific requirements with fixed rate, variable rate and interest only options available – or indeed a combination if so desired. The flexibility of varied loan structures and the correct structure is key.

Our highly experienced team of AMC agents and valuers, who are all rural chartered surveyors, understand rural business and the intricacies of borrowing money. It is crucial to have support from someone who understands your business and can talk you through the process. So whether you are reviewing your business’s financial structure or seeking long term stability, please contact one of our agents and we’d be delighted to discuss your requirements. n

Alistair Christie 07500 794 201 alistair.christie@galbraithgroup.com 3

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Traquair House A rural business in the heart of the local community

A diverse estate in rural Peeblesshire, Traquair provides an excellent example of the flexibility which has been required in the past year. Mike Thompson reports on the challenges of the pandemic and exciting developments for the future…

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raquair House is a leading visitor attraction, welcoming 30,000-40,000 people per year, with guests coming from all over the world to this most romantic of historic houses.

Celebrated as the oldest inhabited house in Scotland, Traquair dates back to 1107 and has been home to generations of the Stuart family since 1491. The famous Bear Gates at the top of the main drive were

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closed in 1745 following the visit of Bonnie Prince Charlie when the 5th Earl promised they would never be opened again until the Stuarts returned to the throne.

Catherine Maxwell Stuart, 21st Lady of Traquair, runs the estate with her husband Mark, supported by Galbraith as estate managers.

The house hosts a varied programme of events and exhibitions throughout the year and also offers luxurious B & B accommodation. The wider estate interests include a 9-bedroom self-catering property, forestry, fishing, tenanted farms and business premises let to local craftspeople, situated within a former sawmill and stables.

The Traquair Brewery is a celebrated element of the estate’s activities and recognised as a pioneer among micro-brewers. It dates back to the early 1700s and was originally a domestic brewery serving the house and the estate. It gradually fell into disuse in the 1800s until 1965 when it was rediscovered by the 20th Laird.

Today the original equipment is used to create four distinct ales, with customers all over the world, although this is still a small-scale

operation. The brewery employs two full time brewers and is a wonderful link to the history of the estate, while embracing contemporary culture.

In common with many other tourism and rural businesses, the past 12 months have proved very disruptive for Traquair, with a significant impact on revenue. Some aspects of the estate’s activity have been able to pivot to a new means of distribution, such as online sales of beer and products from the gift shop.

However, these have not compensated for the much higher sales figure which would have resulted from visitors to the estate in person.

The requirement for social distancing and government restrictions have played to Traquair’s strengths of being able to offer small outdoor weddings and intimate dining experiences. Small outdoor weddings have been provided within government restrictions, which has offered couples a unique experience.

Personalised tours of Traquair House have also been on offer.

A high-point of the past year has been the opening of the new footpath, which provides an off-road

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| Rural Matters | Summer 2021 route to Traquair from the nearest village, Innerleithen. The route provides a beautiful and varied 4.5km circuit around the grounds of the estate, encompassing glorious woodland, river and hill views.

The WIAT scheme (Woodlands In and Around Towns) supported the creation of the footpath and at the time of writing the signage is almost complete. This impeccable timing has enabled Traquair to build links with its local community at a time when their support was much needed.

Catherine Maxwell-Stuart explains: “People who only live a few minutes from the estate haven’t necessarily been frequent visitors but since the pandemic they are enjoying the grounds regularly. Usually there are between 20-30 people every time I walk along the footpath, which is wonderful to see.

“Visitors who buy a season ticket can also access the entirety of the

grounds for the whole year, which enables us to form a relationship and let them know about future events.

For example the restaurant in the walled garden opened between July and October 2020 for outdoor service and bookings were very good. We had created a gazebo, and marquees in case of rain and made the experience attractive to diners while ensuring people felt safe in terms of social distancing. The support from the local community really helped at a time when almost all of our operations had been closed down.”

Supporting the local community has long been a focus of the estate.

Estate buildings are let to crafts people who run their own business.

At present these include a leatherworker, personalised textile gifts, and ceramic design. This allows local people to develop successful businesses, which benefit from the visitor audience.

Visitors who buy a season ticket can also access the entirety of the grounds for the whole year, which enables us to form a relationship and let them know about future events

In addition to the house, brewery, craft workshops and café, the grounds of Traquair House also offer the largest hedge maze in Scotland, fishing, holiday accommodation and a chapel which is also used for weddings.

Future developments at Traquair include the launch of glamping pods in the grounds, which are currently in the planning stages and a further development of the estate’s forestry interests.

There are 300 acres of forestry at Traquair, comprising a mix of commercial planting and broadleaved trees, with the ancient woodlands around the house proving a superb addition to the beauty of the grounds, including an ancient yew tree circle and European firs.

The woodlands have been expanded in recent years, making use of incentives for new planting. The forestry is managed to enhance biodiversity and produce a sustainable income to meet all forestry expenditure. Today there is a sustained interest in carbon offsetting which offers potential for an additional source of revenue.

In the early 1500s Traquair was a hunting lodge in the middle of the vast Ettrick Forest, but the trees were largely cleared in later centuries. Restoring some of the woodland is very much in keeping with the history of this magnificent Scottish estate.

Looking to the future and building on the history of Traquair Estate, gives a strong basis for the Estate to build a sustainable model for future growth. In the coming year the estate is looking to build on the lessons of the pandemic, such as greater involvement of local residents, along with a return of outdoor events such as the outdoor theatre and Beyond Borders Festivals. Going forward Galbraith will be able to work with the estate to develop more exciting projects and bring benefits to the wider community.

At the time of writing it is hoped that Traquair House will be open for small guided tours, and the workshops, café and grounds will be fully open from 1st May. n

Mike Thompson 07867 977 632 mike.thompson@galbraithgroup.com 5

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New Life for Old Buildings Scotland’s rural landscape traditionally comprised numerous small farms, each with a stone built farmhouse, surrounded by a range of vernacular buildings sitting centrally within the farm land. Our farming businesses have modernised over time, farming much larger areas in order to benefit from economies of scale and spread fixed costs. But what do you do with the traditional farm buildings that once comprised part of a smaller farm unit and are no longer fit for agricultural use?

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here are various opportunities for alternative use of these traditional buildings which not only serve to preserve these assets, but often provide opportunity for diversified use. From central Scotland, I can give you one such example of a simple, yet effective conversion of these traditional buildings.

The farm in this instance is owned by a farming partnership. It is located approximately one mile outwith the local village and close to the main trunk road network. The farm extends to approximately 65 hectares (160 acres) of predominantly arable land and is accompanied by a fourbedroom farmhouse and a range of farm buildings, which includes a Ushaped traditional stone built steading range and two Dutch barns.

The project essentially involved considering alternative uses for the farm following renunciation of a secure agricultural tenancy under the Agricultural Holdings (Scotland) Act 1991. The outgoing tenant was a retiring farmer and they came to agreement with the estate to buy out their tenancy as well as purchasing the tenant’s other farm,

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which neighboured the estate. This allowed the tenant to pay off borrowing, downsize and retire. From the estate's perspective, it allowed them to expand their land area, and created the opportunity to offer additional land on the estate to young, local farmers. While encouraging the next generation of farmers is a positive story enough, it has had the benefit of hopefully future-proofing the estate’s in-hand farming enterprise.

The farming partnership already farmed approximately 325 acres of arable land. When the farm came back in hand, the land was added to the existing contract farming arrangement.

The U-shaped steading building was of stone construction under a pitched slate roof surrounding a broken concrete yard area and the buildings were in poor condition when they came back in hand. Various options were considered, whether interest could be obtained for a commercial let of the whole site to an individual business or whether to split the building into smaller units. One key objective was to avoid incurring significant upfront expenditure in renovating the buildings until interest from potential tenants was established.

Little interest was shown in renting the buildings as a whole, conversely there was a great deal of interest from small, local businesses in renting individual units. The layout of the buildings and internal walls provided obvious apportionment into five separate units. Renovation works to the buildings were carried out as and when terms were agreed with potential tenants. Works have included re-roofing the buildings with installation of doors and windows, painting and removing old cattle pens, fencing the site for security and installing separate supplies of electricity to each unit.

Through local marketing a huge level of interest was obtained from a number of small local businesses ranging from fencers, florists and gardeners to plumbers and electricians. The site was gradually redeveloped as a mini mixed use commercial enterprise with the buildings gradually being let as workshops and storage. There is also of course benefit to our client of having local skilled tradesman based on the estate.

Admittedly there has been some capital expenditure incurred to get the buildings secure and wind and watertight. However, the rental level of the farm has increased to more

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One key objective was to avoid incurring significant upfront expenditure in renovating the buildings...

than four times the rent received when let as a farm unit. Therefore, despite the capital expenditure incurred, we are anticipating an approximate four-year return on investment once the units are fully let.

The capital value of the asset should also be considered in a project such as this, which has not only been maintained by preventing the buildings from deteriorating further, but has been increased by the works carried out to maintain them and provide alternative uses.

This has been a real success story and a beneficial use of buildings which were no longer fit for use for farming purposes. Whilst in this instance, our client was in a fortunate position in terms of the location of the farm, accessibility and ability to invest in the buildings, it is a fine example of what can be achieved by restructuring in order to maximise revenue. Our rural team worked closely with both our commercial and building surveying team in order to provide specialist advice where required. n

Annie Lane 07747 471 715 annie.lane@galbraithgroup.com

Support for farmers in a difficult year

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he cancellation of agricultural shows has been keenly felt by the agricultural community. After the rush of spring work, a trip to a show – whether it’s the Royal Highland Show or one closer to home – is something to look forward to and was very much missed last year.

Working in agriculture can feel relentless, and agricultural shows offer vital time out – a chance to down tools and take a break from the day-to-day work.

Social connections are good for our mental wellbeing and the social aspect of agricultural shows should not be underestimated.

Agriculture can be an isolated industry, with many people living and working on their own in remote and rural areas. Catching up with friends, meeting new people and just generally getting the craic are incredibly important aspects of agricultural shows.

RSABI supports people in Scottish agriculture emotionally, practically and financially. Last year as lockdown set in and shows were cancelled, we recognised that there could be increased risk of loneliness and isolation as people missed their usual social gatherings.

We sometimes think of loneliness as being something that affects mostly older people, however a survey in 2020 of 3,000 people in rural areas found that people aged 18-29 were most likely to report feeling lonely some or most of the time.

In May 2020 we launched the #KeepTalking campaign, fronted by Perthshire farmer and comedian Jim Smith with auctioneer ambassadors across the country taking part. The four-week campaign encouraged the agricultural community to stay connected and pick up the phone or chat online to friends, family members and neighbours – and to call RSABI if they were feeling low

or lonely. The message is more important now, in 2021.

Our helpline – 0300 111 4166 – is open every day of the year from 7am to 11pm and we also offer a call out service for the lonely and vulnerable. During the various lockdowns we saw a significant increase in demand for our call out service. And our staff and volunteers continue to make many of these vital calls.

One of our clients said: “The regular calls have helped me a lot, especially during covid-19.”

While the Royal Highland Show is not able to go ahead as usual this year, the showcase of the best of food, farming and rural life promises to bring the essence of the event to people’s homes in high definition. Events like show jumping, sheep shearing, livestock judging and cooking demonstrations will be live streamed from the showground in Ingliston, and will be a muchneeded morale boost for the industry.

And although it does feel like there is light at the end of the tunnel, most agricultural shows are cancelled for 2021 again, which means people will continue to miss out on vital social interaction.

That’s why RSABI will continue to promote the #KeepTalking message this year. We’ll be encouraging people to get in touch with someone they haven’t spoken to for a while, perhaps a friend, relative or neighbour who lives on their own and could be feeling fed up and lonely.

We’d also encourage anyone feeling low or lonely to give us a call. If you, or someone you know, would like a regular call from RSABI get in touch on 0300 111 4166 and we can arrange. We’re here to support people in the Scottish agricultural industry and provide a friendly, confidential listening ear. n 7

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Alistair Christie in Conversation with WP Nel To celebrate the partnership between Galbraith and Edinburgh Rugby, Alistair Christie caught up with club stalwart and international W P Nel, who who recently extended his stay in the capital, with the tighthead prop putting pen-to-paper on a brand new deal.

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he South African-born prop has carved a scintillating career for both Edinburgh and Scotland since arriving in 2011. The 34-year old is a fan favourite at BT Murrayfield whatever colour jersey he appears in - a far cry from growing up on a sheep farm in his home town of Loerlesfontein.

Alistair Christie chats to him about his rural upbringing, career so far and life after rugby.

AC: Firstly WP I would like to congratulate you on passing 150 appearances for Edinburgh Rugby and of course signing a new contract, extending your stay at the club.

WP: Thank you Al! Let’s just see how long I can keep this body going.

AC: It’s been a tricky year due to the Covid-19 (Coronavirus) pandemic. How have you managed to keep yourself motivated and fit whist also balancing family life throughout the last 12 months?

WP: I think that family is the biggest thing that’s kept me going this past year. The first lockdown you only had your family around you, so I tried to be as positive as possible. I tried new things and kept people busy and occupied especially with a little baby.

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In fairness for me it was probably good to rest the body. It was actually a good time with the family and they were the cornerstone of my lockdown.

AC: Did you have to bubble with any of the players or anything like that?

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| Rural Matters | Summer 2021 WP: No at the start it was all on Zoom. We got watt bikes delivered to the door and would have morning and afternoon sessions, so that was good company. We bubbled in the house and met on Zoom with our bikes so it was a win/win.

AC: Going back to the start, you moved to Scotland from South Africa when you signed for Edinburgh in 2012. What was the main motivation to come over?

WP: Probably opportunity. Back home the main motivation to look overseas was when the Springboks head coach at the time came round the club and said: “You’re not going to be in my picture for selection.”

My coach at the time (at the Cheetahs) said it was maybe time for me to look for something a little different. Edinburgh was the opportunity we went for and here we are 10 years later.

AC: Well it certainly worked out for the best here with both Edinburgh and the National set up. We are certainly grateful!

AC: Obviously WP a lot of the work we do at Galbraith is rural and I know you have a strong background in that.

Can you give us an idea of what your upbringing was like back in South Africa and why you have an interest in rural life?

WP: Yeah, I was born into a small town with a small community, almost all farmers, so it’s in my blood. As much as you try to get rid of it, and I have tried hard this past 10 years, it’s difficult. I was brought up in a farm with sheep and my dad is still doing it.

Every weekend when you’re not in school I’d be on the farm. It is part of my life.

AC: I imagine there’s quite big differences in agriculture between Scotland and your native South Africa, much of it determined by the climate! Do you see yourself going back into agriculture after rugby?

WP: Yeah Al you know we have had a couple of chats back and forth and I would love to after rugby, like I said it is part of me. There is a big

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I was born into a small town with a small community, almost all farmers, so it’s in my blood.

As much as you try to get rid of it, and I have tried hard this past ten years, it’s difficult. difference how farmers operate back home to here. The land is much bigger over in South Africa because of differences in climate and rainfall, so you have to have massive land for your sheep and cattle. If I look at the farmers though it all comes down to the same things and the key is to be productive and see how you can get the best out of your sheep and lamb at the market.

AC: It’s looking like you might get to face some of the South African teams in next season’s Guinness PRO14 competition. Would you be looking forward to that challenge if it all goes ahead as planned?

WP: I think there will definitely be some banter! I think the teams will bring a different challenge, there will be some running rugby and new challenges than with the teams in the northern hemisphere. We are really

looking forward to getting them over and involved in this competition.

I think it will attract new viewers as well. In South Africa they are one big rugby community so to have them as part of the competition will be brilliant as well. It’s exciting!

AC: And of course there’s been big investment at BT Murrayfield with their new stadium now completed.

Are you excited to get out on the pitch and enjoy some fast running rugby?

WP: Haha I don’t know about the fast running rugby! I think it is good for us as a club. We have had a couple of sessions on it now and it does feel like home. It’ll be great for us to get the supporters in there and play somewhere new – a new home and a new environment.

AC: That sound’s great WP. I can’t wait until we are allowed to get along and see it on match day when it’s safe to do so. Lastly, I’d just like to take this opportunity to say we are absolutely delighted to be onboard as sponsors for another two seasons and we can’t wait to see you running out there many more times with an Edinburgh jersey on. Thank you for your time.

WP: Thank you Al and thank you for the support from Galbraith and keeping faith in us.

Alistair Christie 07500 794 201 alistair.christie@galbraithgroup.com 9

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New wedding venue the icing on the cake for Rosebery Estates One of the most beautiful luxury wedding and events venues in Scotland has been created on a historic estate, representing the culmination of six years of planning.

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osebery Steading is situated on the glorious Rosebery Estates, home to the Earls of Rosebery since 1662.

Galbraith has worked with the Primrose family for many years, assisting the factor Jonathan Burrow and also advising on specific building projects through the Galbraith building surveying team.

The steading dates from the early 19th century and was originally a ‘farm toun’ with accommodation for farm workers, stabling and agricultural stores.

The architecture of the steading is particularly attractive, with locally 10

quarried stone walls, traditional slate roofs and the main buildings enclosing a central courtyard. The clock tower is particularly handsome, with a spectacular steeple above the doo’cot (dovecot) and traditional carriage-arch.

As part of an ongoing strategy of diversification, the ambition was to renovate the steading and create a premium venue for weddings, conferences and private events.

The estate had recently completed the renovation of Barnbougle Castle, a 13th century castle with spectacular views over the Firth of Forth. Rosebery House, a superb country mansion with beautiful grounds, is also available to

hire for exclusive use, with accommodation for up to 20 guests.

The transformation of Rosebery Steading into an additional venue would therefore create a portfolio of spaces to suit events of different sizes, providing the maximum flexibility for guests.

Jonathan Burrow, factor of Rosebery Estates said: “In the very early stages we considered creating residential let properties at Rosebery Steading but the legislation in Scotland governing lettings meant that this would have led to a loss of control in a sensitive location. We then considered holiday lets but very rapidly we decided to

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create an events space, capitalising on the beauty of our surroundings and the advantages of our location.”

Louisa Kerr, head of sales and marketing for Rosebery Venues said: “We are targeting a national and international market, as the history of the estate and the role of the family in British political and cultural life attracts interest from all over the world. The venue will appeal to corporate clients looking to host an event for up to 100 guests or perhaps a working retreat where colleagues can get away from it all for a few days. We are only 30 minutes from Edinburgh and Edinburgh Airport, yet very secluded

and surrounded on all sides by rolling countryside.

“For weddings, we have a private chapel on site and the grounds and parkland offer a variety of beautiful backdrops for photography. We offer accommodation for up to 28 guests at the steading and further accommodation on the estate if desired for larger parties, all in luxurious settings. The investment in first-class interior design by Edinburgh-based interior designers Remus, coupled with the use of lovingly restored family antiques in the accommodation, has worked incredibly well.

“In recent years there has been an interest in weddings that are combined with an activity weekend for guests, so we also offer weekend packages.

“The estate can supply premium catering for events of all sizes with a focus on sustainability, working with local suppliers and growing as much produce as possible on the estate itself.

We even have our own vermouth, which is hand-made in batches on site and flavoured with herbs grown in our gardens.”

The Galbraith building surveying team has overseen the building work from 2017 to the official launch in 2020.

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Robert Garrett of Galbraith said: “The steading conversion began with the planning application in 2016 which was relatively straightforward. The estate was committed to retaining the sympathetic character of the buildings while modernising and updating the interiors. Much of the original fabric of the building was in good order and could be retained.

Some new components were added – for example the cobbles in the courtyard are not original but have become an important design element of the outdoor space, along with the timber seating, and fire-pit, so guests can spill out to the outdoor areas on summer evenings or even hold their ceremony outdoors.”

Two expansive, light-filled barns – the Hayloft and the Threshing Barn – have been created. The Pumphouse Bar occupies an area which once housed an electricity generator and the original viewing screen has been retained. Innovative audio technology from KEF and a state-of-the-art lighting system ensure that every party is truly memorable.

The final stage in the renovation was landscaping part of the parkland with new woodlands comprising native hardwoods and

some specimen trees, a new pond and the restoration of a curling pond dating back over a century.

Rosebery Steading’s official launch was scheduled for March 2020, a date now etched indelibly in all of our minds as the start of the first lockdown in the UK. Despite this, Louisa Kerr is confident about the future for the estate’s portfolio of venues: “We are now on the cusp of opening for a full summer season and we are almost fully booked. All the couples who had to delay their wedding in 2020 have stayed with us and we also have a good number of new bookings.

“We are so delighted with the finished result and the way that the historic and modern touches have combined to create something truly special. There is nowhere else like it.” n All photographs copyright: Adrian Houston. https://roseberyvenues.co.uk/

James Bowie 07824 141 810 james.bowie@galbraithgroup.com

The estate can supply premium catering for events of all sizes with a focus on sustainability, working with local suppliers and growing as much produce as possible on the estate...

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All photographs copyright: Adrian Houston.

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Dipping your toes into Reservoir Ownership A rural estate can comprise a diverse range of assets but ownership of a reservoir is probably not the first thing that springs to mind.

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f an opportunity arises to own an expanse of water, it’s best to know the risks and the rewards before taking the plunge.

Scotland’s reservoirs are regulated under the Reservoirs (Scotland) Act 2011. Any reservoir with a volume of at least 25,000m3 must be registered with Scottish Environment Protection Agency (SEPA). SEPA maintains a publicly available register of controlled reservoirs which contains key information about each registered reservoir including reservoir manager details, panel engineers associated with the reservoir and an inundation map highlighting the area of land that is likely to be flooded in the event of an uncontrolled release of water from the reservoir.

The Reservoir Act defines certain people with responsibility for the reservoir and reservoir safety as follows: • The Reservoir Manager – the person with responsibility for the day to day monitoring and maintenance of the reservoir (in accordance with any recommendations made by the Supervising Engineer). This is usually the owner but responsibility can fall to the occupier if the reservoir is leased, depending on the lease terms.

They are required to maintain the necessary records and provide these to the panel engineers upon inspection.

• Supervising Engineer – registered with the Scottish Government

under the Supervising Engineers (Scotland) Panel. The role of the Supervising Engineer is to carry out inspections of the reservoir under section 50 of the Reservoirs (Scotland) Act 2011. They will provide a written statement to the reservoir manager and SEPA providing advice and direction on the ongoing maintenance and monitoring of the reservoir up to the date of the next inspection.

• Inspecting Engineer – must be approved by the Scottish Ministers under the All Reservoirs (Scotland) Panel. They are civil engineers with specialist knowledge of reservoir safety.

Their role is to oversee the safe construction, operation and maintenance of reservoirs.

Reservoirs are classed as high, medium or low risk based on the adverse consequences of an uncontrolled release of water from the dam on the area downstream of the reservoir. This takes into account the consequences to human health, economic activity, cultural heritage and the environment. The risk level of the reservoir determines the level of supervision and inspection a reservoir requires. Low risk reservoirs will require a lower level of inspection than a medium or high risk reservoir.

• Low Risk Reservoirs – Do not need to commission a supervising or inspecting engineer but reservoir managers should make regular checks of the reservoir and seek advice if concerned.

• Medium Risk Reservoirs – must be supervised by a supervising engineer on a regular basis (at least once every 12 months or more frequently if any concerns).

A medium risk reservoir is only required to be inspected by an Inspecting Engineer if recommended by the Supervising Engineer.

• High Risk Reservoirs – require regular inspection by a supervising engineer (at least once every 12 months or more frequently if any concerns are raised) and an inspection by an Inspecting Engineer at least once every 10 years. The inspecting engineer and supervising engineer are required to produce a report following their inspection which must be provided to the reservoir manager and SEPA. Any construction or alteration to the reservoir must be overseen by an all reservoirs panel engineer, approved

by Scottish Ministers.

Whilst the regulations have only been brought into force for reservoirs of a capacity of 25,000m3 or more, the Reservoirs (Scotland) Act 2011 provides that regulations will be brought into force at a later date for reservoirs of a capacity between 10,000m3 and 25,000m3. n

Annie Lane 07747 471 715 annie.lane@galbraithgroup.com 13

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Navigating Natural Capital

We know about capital.

So what is ‘natural’ capital.

We know about capital. As Adam Smith, the Father of Capitalism, wrote 245 years ago: ‘His whole stock is distinguished into two parts. That part which, he expects, is to afford him revenue, is called his capital. The other supplies his immediate consumption, as it gradually comes in’;

Natural capital is simply planet Earth: its rocks, soil, water, atmosphere, plants and animals. But it is Earth viewed from a specific perspective: its ability to generate the ‘revenue’ — oxygen, water, food, building and clothing materials, disease control — which supports human life.

Smith went on: ’As every individual endeavours to employ his capital, every individual is led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of the society more effectively than when he really intends to promote it.’

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When populations are low, the revenue is there for the taking. But as populations grow, we hit natural capital barriers. It seems likely that the invention of farming was partly driven by hungry people outcompeted by higher-status huntergatherers. Their innovation has enabled population to keep growing to this day. Humanity has taken food production seriously, and cracked

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it — although we know that if climate change, phosphate shortage or pollinator extinction were to devastate Earth’s food-growing capacity, it would be a fundamental catastrophe.

Our more recent history shows food is not the only resource we cannot take for granted. In late Medieval Britain, deforestation resulted in a long fuel crisis which checked prosperity until large-scale use of coal enabled population growth and urbanisation. The super-insulated turf houses of Iceland were invented because wood for building and heating was quickly used up by the original settlers. The Rapa Nui lost their seafaring culture once there were no more trees on Easter Island to build boats. The East India Company instigated forest protection in St Helena when the water supply which underpinned their business plan was in jeopardy. Shortage results in adaptation, innovation, or disaster.

So far we have been considering biological natural capital. Yet in our modern world, it is another form we are squandering most disastrously.

Food can be farmed, forests

Instead of nutshells, we have climate change, oceans of plastic, nitrate pollution, rivers destroyed for sand mines...

harvested sustainably: we can see how to spend the revenue and invest in the capital. Yet with minerals like coal, oil, phosphates, sand, iron ore, we have only capital. Abundant, but not infinite, we have been splashing capital about with disastrous consequences: climate change, pollution, and habitat destruction.

Investing in natural capital This is where natural capital meets and interacts with three other concepts: ecosystem services, circular economy, and regenerative farming and forestry.

Ecosystem services are the revenue of natural capital. Not just food, clothes, houses and transport, but those we take for granted: stable climate, breathable air, drinkable water, medicines, mental wellbeing.

Yet now that our wasteful use of natural capital is putting these under threat, we need to include them in our calculations.

Circular economy is not about recycling, but about production.

Economic activity to meet our needs, has historically been as linear as a dormouse taking a hazelnut from a tree, eating it, and dropping the shell.

This works in a balanced ecosystem, but we have too many humans on the planet, and have delved too deep into its resources, for nature to pick up the rest of the cycle. Instead of nutshells, we have climate change, oceans of plastic, nitrate pollution, rivers destroyed for sand mines.

Circular economy is taking responsibility for the whole cycle: ensuring that what we produce is renewable, regenerative, and reusable. It means using our mineral resources so wisely that they are a closed loop — without extraction or pollution. It means new inputs (such as food and timber) are from systems which are not just sustainable, but regenerative — restoring ecosystems damaged over millennia. Economy has caused environmental destruction; but circular economy would restore Adam Smith’s benevolent ‘invisible hand’, driving ecological restoration.

This is where you come in, and why we are hearing more and more about our third concept: regenerative agriculture — we must also include regenerative forestry. Managed land, producing and restoring

simultaneously, is the engine of circular economy.

Where is it leading?

Are all these proliferating concepts passing fashions? I don’t think so.

They are part of a fast-developing, interconnected theory of how we can supply our needs while reversing environmental destruction, at the end of a trend which we can trace back throughout human history. Fans of Adam Smith were shocked when, 50 years later, industrial revolution had created smoke, exploitation and misery. His ‘invisible hand’ got a bad name; but consumers, industrialists, and governments developed regulations on food standards, child labour, health and safety, air quality, and much more which we now take for granted. Faced with ecological disaster, we have the same imperative to constrain our market, and channel it into restoration.

The practices for delivering this shift — from cover crops to carbon credits — are evolving even faster than the concepts. In the real world of emerging business, marketing is allimportant, but ‘greenwash’ is a real danger. The carbon price is likely to soar, but it could also bubble. We need to ‘think global and act local’, understand the big picture as we apply concepts like NatCap valuations, biodiversity offsets, charismatic carbon, and rewilding.

Amongst the storm of buzz-words, messy growth and heated debate, we need to navigate the current of taking responsibility for the whole cycle. It starts on the land.

Galbraith has been helping farmers, woodland and landowners manage their land for decades, managing Natural Capital is not new to us, it is what we have been doing for years.

There is a new language alongside new constraints and new opportunities; our team of specialists in the field of Natural Capital is ready to help you steer a steady path through the options opening up along the route to net-zero. n

Dr Eleanor Harris 07585 900 870 eleanor.harris@galbraithgroup.com

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Valuation of Fishing...

A Finely Balanced Task At Galbraith we are often asked to value salmon-fishing, either as part of a wider estate valuation, or on its own as a (sometimes overlooked) discrete asset.

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t can be a mysterious business.

Recent sales carried out by the firm indicate that an English salmon is worth more than a Scottish one, despite the popularity of Scotland as a destination for visiting anglers. You would think it would be the other way around.

The starting point for many is to establish the capital value of a single fish, and multiply this by the average catch for the last 10 years.

The problem with this is that all salmon are not the same, rather like all land is not the same. We do not value land in this uniform manner; we work out the value of the land

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according to a host of factors. So it is with the valuation of salmon fishing.

Average catch records can hide a multitude of sins. If the 10-year average is not available, you should ask why; be wary of a 5-year average which disguises a poor longer-term trend.

The Atlantic salmon is enigmatic.

As numbers in the sea have fallen to perhaps 25% today compared to their numbers 30 years ago, their value has not increased with their scarcity. Counter-intuitively, it seems that a salmon when one of a multiple catch is worth more than a salmon on its own.

A fishing beat might be intensively fished with fly and spinner, and achieve an average of 100 salmon; a similar beat fished lightly by family and friends with fly only might have a lower average catch.

But which beat is more valuable? It is likely to be the more lightly fished beat, with the lower average catch record.

Anglers know what a good beat looks like. In an era of falling fish numbers, where you are and how the experience can be enjoyed are important factors. You can have an enjoyable day’s fishing without catching anything if you are in with a chance, and have the glorious

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But which beat is more valuable?

It is likely to be the more lightly fished beat, with the lower average catch record.

British countryside to yourself and your friends. That is more difficult to achieve if the river bank is popular with walkers; the main pool is under a motorway bridge; and there is no fishing hut for a get-together with your fellow anglers.

Whether you are looking to purchase or sell salmon fishing, it makes sense to know its true value. As always on the river bank, it is best to be well-informed before you start. n

Hugo Remnant 07718 523 051 hugo.remnant@galbraithgroup.com 17

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New & Extended Permitted Development Rights in Scotland The Town and Country Planning (General Permitted Development and Use Classes) (Scotland) Amendment Order 2020 came into force in early April 2021.

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he order concludes the first phase of a wide-ranging Scottish Government programme to review and extend permitted development rights (PDR) in Scotland. It relates to the following five development types: digital telecommunications infrastructure, agriculture, peatland restoration, active travel and aquaculture.

Subsequent PDR review phases will consider hill tracks, pond creation for habitat enhancement, micro-renewables and energy storage, amongst others.

In relation to new agricultural buildings, outwith designated areas (such as National Parks), the size limit has been increased to 1,000sqm.

Within designated areas, the previous size limit of 465sqm still applies. For extensions or alterations to existing buildings, a 20% increase in the cubic content now applies.

Taken together, these changes roughly double the size of new agricultural buildings that may be erected under PDR (subject to following a prior notification/approval process) outwith designated areas, and double the size of extensions to existing agricultural buildings that may be carried out without requiring prior notification/approval. All other previous criteria such as building heights, distance to classified roads etc. continue to apply.

The order also introduces new PDR for the conversion of existing agricultural (and forestry) buildings to residential and other uses. In the case of agricultural buildings, cumulative limits of up to five dwellings (none of which may exceed 150sqm) and up to 500sqm flexible commercial space apply in respect of the preexisting farming unit. In the case of forestry buildings, the limits relate to each individual building.

The term ‘flexible commercial use’ means Class 1 (shops), Class 2 (financial, professional and other services), Class 3 (food and drink), Class 4 18

(business), Class 6 (storage or distribution) or Class 10 (non-residential institutions) of the Use Classes Order 1997.

As well as authorising the change of use of agricultural and forestry buildings, the new PDR also permits certain building operations that are reasonably necessary to carry out the conversion. They are not however intended to permit extensive building works. For that reason, only those building operations specified in the legislation may be carried out under the new PDR (e.g. installation or replacement of windows, doors, roofs, exterior walls or utilities services, to the extent reasonably necessary for the building to function in its new use).

Additionally, development cannot extend the external dimensions of the building that is being converted (excluding guttering, pipes, flues and aerials).

Such development is subject to a prior notification/approval process (considering design and appearance, transport and access, flood risk, noise etc.) in lieu of full planning permission.

Importantly, the new PDR do not apply to buildings that were constructed after 4th November 2019. A building may only be converted under these measures if it was solely used for the purposes of agriculture (or forestry) on this date or, if it was not in use on that date, it must have been used for such purposes when last in use.

Additionally, the new PDR do not apply to listed buildings, buildings on croft land, or buildings within a site of archaeological interest, a safety hazard area or a military explosive storage area. n

Nicola MacGruer 07899 914 865 nicola.macgruer@galbraithgroup.com

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Life in Lockdown for a Graduate Rural Surveyor The last year has seen our lives adapt to what is being called the ‘new normal’ – working life is no exception to this. We are all now experts on Zoom calls, Teams calls, and working from home. In some ways it has saved an enormous amount of time and money in travelling and meetings.

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here is something to be said for being in an office with colleagues discussing the ins and outs of a rent review, or the figures on a complex valuation, or even just the weather. This is something we have all had to adapt to, with our own individual set of challenges Now, there is hope on the horizon for returning to our pre-lockdown lives. However, businesses everywhere are questioning if going back to the way things were would be preferable. The idea of flexible hours and flexible working locations has opened up the conversation around productivity, office space and daily routines – as well as allowing greater freedom in our personal lives to live and work somewhere outwith commuting distance from an office. For me, as a graduate, working from home has almost been the ‘norm’ as I started my rural surveying position with Galbraith in October 2020. Since then, we have continued to carry out outdoor site visits, which has allowed me to meet a handful of fellow colleagues. The weekly scheduled catch up meetings keep everyone in the loop, as well as daily, often hourly phone calls and screen sharing on Teams meetings allows us to carry out the same work as always.

There is something to be said for an office environment. The buzz

of agency sales, the thorough discussions of a unique valuation - even just for catching up.

Going forward, I am excited to be able to meet colleagues that I have only discussed work with on a video call. Even more so, I look forward to meeting the other graduates, having face to face study groups, getting real time Continuous Professional Development and engaging with clients.

As a business, Galbraith has adapted to working from home.

We are set up with what we need, with the latest software packages and training in order to make working from home as smooth as possible. At this stage, many businesses are at a turning point for the future of office working. Engaging with staff in order to figure out the smoothest and best way to exit this period has been vital for determining our future working patterns.

Whether it be a hybrid scenario of working between both home and office; or more flexible hours and working locations. There are discussions to be had across the property and rural sectors. If the pandemic has highlighted anything, it is that communication is key for staying on top of both our professional and personal lives. n

Katie Marr 07824 435 087 katie.marr@galbraithgroup.com 19

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Food, Fun & Farming

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Successful diversification has proved the bedrock for major growth at Craigie’s Farm & Farm Shop, a tenant of Rosebery Estates at South Queensferry.

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raigie’s Farm has transformed over the past 15 years from its origins as a beef and dairy farm to a diversified agri-business with a 200-seater café, farm shop and deli, butchery and direct sales to the public of fruit and vegetables on a ‘pick your own’ model. The farming element today represents just five per cent of turnover.

Husband and wife team John and Kirsteen Sinclair have founded their diversification strategy on enjoyment of high-quality fresh and local food. Forty per cent of the food sold at Craigie’s is grown on the farm and a further 45 per cent is grown in Scotland. The family’s ethos of supporting local food producers chimes well with the aims of Lord Rosebery and the wider estate.

John Sinclair says the success of the business has been founded on two key ingredients.

“Firstly we are in a good location, in a scenic area close to Edinburgh. Within a 45-minute drive there is a population of 1.5 million people and within a 60-minute drive there are 2.5 million.

“Secondly, we have gained a detailed understanding of our customers. We survey them every three years and carefully analyse their feedback; we know which postcodes are essential to our marketing; we also do regular ‘mystery shopper’ telephone calls to check on customer service. The detailed customer surveys have helped us to fine-tune our marketing and product range.

For example, our customers wanted fresh, local produce but they didn’t mind if it was organic or not. That has underpinned our product selection.”

The next phase of development for Craigie’s is the creation of a new family-friendly area encompassing a 1,200 square metre play barn with party rooms and a 150-seater, informal, child-friendly café. This will offer dining aimed at under 10-year olds, but still fresh, healthy and nutritious. There will be a bespoke timber play area, made by Richter Speilgerate, with an educational element based on managed risk within play.

An adjacent animal barn will offer demonstrations and animal feeding throughout the day.

This new area is found in some of the original farm buildings alongside a new purpose-built steel portal shed. The buildings surveying team and the estate management team at Galbraith – led by Martin Cassels and Chris Addison-Scott, have worked with Craigie’s on the development.

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We had 35,000 visitors in 2005, this has risen to 230,000 per year in 2021, we expect this to increase to 400,000 per year by 2025...

John Sinclair continues: “Lord Dalmeny was keen for the existing farm buildings to be used, as were we - and they are in keeping with our premium, rural branding. The estate has also invested money into the build. Our relationship with the estate has always been very positive and based on mutual respect. The Sinclair family has been farming at Dalmeny since 1892.

“Previously we were on a ‘91 Act Tenancy but in early 2020 we moved to a 50-year commercial lease, with a 50-year Modern Limited Duration Tenancy on the land. This has given us security and 22

the ability to expand the business.

Galbraith acted for Lord Rosebery and there has been good compromise on all sides throughout the tenancy negotiations. Galbraith has given me invaluable advice. The new tenancy agreement gave us greater control and provided security for me and the next generation of the family.”

Jonathan Burrow, the Factor for Rosebery Estates agrees: “We discussed over several years the best way to move on from the ’91 Act Tenancy which was no longer appropriate. There is a clear synergy between the aims and ambitions of the estate and the farm business.

We have always enjoyed a very productive relationship with Craigie’s and we are likely to work with John on future opportunities if they sit well with his plans for the future.”

has not adversely affected Craigie’s, as they quickly realised the opportunity to pivot to home deliveries. John Sinclair continues: “The café was closed but we were soon able to develop a delivery business which is currently trading at 500 per cent of our normal turnover for the café. Last summer, the pick your own business was allowed to continue and the food shop and butchery have been able to open, with social distancing measures in place. These are also trading above their usual revenue.

We are very grateful for the strong support from loyal customers.”

It is clear that the successful relationship between tenant and landlord has provided a solid basis for this inspirational family business.

We wish Craigie’s continued success. n

Building work on the new play area began in September 2020 and the official opening is scheduled for May, subject to Covid-19 regulations.

James Bowie

The events of 2020, with the closure of most leisure and retail businesses,

07824 141 810 james.bowie@galbraithgroup.com

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A House in the Country...

You can Bet on It There probably isn’t much you would be willing to bet your house on. However, demand for rural property is as safe a wager as you are going to get. ural property has always been desirable, for the space, seclusion and opportunity that it offers. Historically, the more remote parts of northern Britain (population density circa 65 people per sq. km – compared with 250 people per sq km in the Home Counties) were places to holiday, perhaps retire, or generally to enjoy the good life.

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gardens and / or land from one acre to 20 or so acres.

The last year or so changed all that.

The average price of property sold by Galbraith increased by 11 per cent year on year, with significant competition for homes in good locations. A premium of up to 30 per cent in excess of the asking price was paid in some cases due to the extraordinary interest in rural homes, a trend which again appears to have continued into 2021. The strong demand has brought interest to some rural areas and property types, not previously particularly sought-after.

The enforced need and subsequent ability (albeit with its many challenges for some) to work from home has been a major factor in many rural house purchases during the pandemic. Good connectivity, either through broadband, strong 4G or a satellite internet connection, has become a must. Galbraith also found that intergenerational living was a deciding factor in many sales during 2020, with strong demand for houses offering an annexe or suitable accommodation for extended family.

Typical demand is for rural property, between £200,000 and £600,000 (but also below, and above) with large

The residential sales offices across the firm saw a 20 per cent increase in sales compared with 2019, despite the housing market being closed for several weeks in the Spring of last year. The demand from July 2020 was not just an anomaly, it is a trend that has continued since.

The Scottish Land & Buildings Transaction Tax (LBTT) thresholds returned to their previous level on 31 March but the end of that incentive is not likely to make a significant

difference to the rural market in Scotland as its monetary value was comparatively small, relative to the cost of a house purchase. Other factors will remain positive – for example mortgages will remain relatively easy to obtain, in all likelihood, and the historically low interest rates are set to continue for the rest of 2021.

The underlying market fundamentals remain strong. We expect a very active property market for the rest of 2021 as many of the factors that were relevant in 2020 are being replicated this year - at the time of writing we are coming out of the most recent lockdown, during which many people will have reassessed their priorities.

There will continue to be good demand for country homes as people are looking for a rural retreat, a larger garden and a good degree of privacy. n

David Corrie 07824 690 199 david.corrie@galbraithgroup.com

The average price of property sold by Galbraith increased by 11 per cent year on year, with significant competition for homes in good locations.

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Market Analysis Farm commodity prices remain strong in 2021, which has reduced pressure on farming, but uncertainty remains.

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ith harvesting and the auction marts entering the annual rush, Martin Rennie reports on the farm produce prices, focusing on lamb, beef, milk and cereals.

Lamb Lamb prices have been strong over the last 6 months (figure 1), bolstered by the momentum gained in late 2020, with the price rising from October 2020 (441p/kg) to finish in December with a high of 479p/kg. In conclusion 2020 prices were higher than the five year average (AHDB 2021). 2021 has seen monthly average deadweight prices shoot out of the gate at 487p/kg, hurtling to 628.5 p/kg. This can be attributed to several reasons; Brexit uncertainty, a thriving domestic market induced by the numerous lockdowns and a reduction in imports at the latter end of 2020 (AHDB 2021).

2020 saw a high portion of the lamb crop being slaughtered as new

Fig 1

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season lambs, which leads to a smaller 2021 old season crop; old season lamb slaughter between January and May is expected to be 7% less than the 2020 figure (AHDB 2021). Further to this, new season lamb slaughter is likely to be reduced in number (3% lower) in comparison to 2020 due to the uncertainty the industry is facing.

Throughput for 2021 is estimated at 12.5 million head, which is 4% lower than 2020’s performance (AHDB 2021). This reduction has favoured producers, with the tighter supplies pressing for a price increase, as following the natural laws of supply and demand. Like the beef trade, the domestic market for lamb has enjoyed the consumer’s desire to cook high-quality products with the closure of the hospitality sector removing such opportunities. There was an 18.3% year on year increase in retail sales of lamb in the 12 week run-up to November 2020 (Farmers Weekly 2021); it appears this taste has yet to be satisfied.

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Beef Alongside lamb prices, the deadweight beef price has been more than positive at the start of 2021. As figure 2 shows, 2021 saw the price per kilogram in January commenced on a position of strength, being 15 pence higher than the most recent January peak in 2018.

From this point, the UK average price has increased gradually to 388 pence per kilo. It is almost a night and day scenario if you compare the poor start of 331.9p/kg in January 2020 which saw the beef industry stumble along to reach a year high of 373.3p/kg in November (AHDB 2021). Scottish beef in particular is teetering on the edge of the heralded 400p/kg mark (Farmers Weekly 2021), which will have a significant contribution towards positive net margins in 2021.

The inflated prices are an outcome of lockdown which has gone relatively unnoticed in the agricultural sector; with more home cooking having a significant impact and alongside this a timely combination of a reduction in the available supply with throughput falling 9.1% around this Easter period. (AHDB, 2021).

The question remains as to how long this high will be enjoyed?

Whilst finishers are enjoying this price spike; the retail cost of beef has remained unaffected. The AHDB have even identified a drop in prices for the cuts it follows (AHDB (g) 2021). The current demand for beef, temporarily exacerbated by the closure of the hospitality sector, is expected to be satisfied with an increase in foreign beef which will overwhelmingly undercut the premium domestic prices we are currently seeing.

Whilst we may all be looking forward to the easing of lockdown, I would not blame the UK beef sector for quietly wishing for a few weeks extension to our current restrictions.

Fig 2

Cereals Covid-19 has impacted several agricultural industries both in a positive and negative manner and the same can be said for cereals.

At the moment November 21 futures are sitting at £167/tonne, which is positive for the year ahead provided spring establishment is positive.

In December 2020, the UK milling wheat industry was 18.6% lower on the year at 454.0kt, 21.5% down on the 5-year-average. Despite this, and increase in the months of July and August results in an overall usage decrease of 4.4% year to date.

Due to a reduction in home grown wheat, with usage being down by 37.8% to 303.2Kt in December due to the UKs low production figures, there was an increase in the December figure of imported wheat of up 115% on the same time the previous year at 150.8Kt. Lockdown measures across the Christmas period naturally had an effect on the demand for goods as less bulk buying of food was required. The total bread making flour demand was impacted in particular with experiencing a reduction of 13% on the previous year, which put it at 233.0Kt. The Christmas period is often a time for demand to increase, mainly down to larger gatherings and social activities, with the 5 year average being at 269.3kt.

Along with wheat, barley is also experiencing a reduction in its demand. In December, a 16% reduction in its use was experienced. A particular factor in this is the closure of pubs and restaurants. This of course meant there were not the same beer and other alcohol sales as the industry would normally expect during this period. Barley usage has been consistently lower throughout the year due to this factor. Year to date, the barley usage figure is down 13.2%.

With regards to oil seed rape, the 2020 season had the lowest production rates since 2004 due to an exceptionally dry spring, wet autumn and growing pressure from pests. This resulted in a decrease in yield of 2.8t/ha on the previous year.

Milk Prices Whilst the cereal industry saw a disruption to the demand for their products due to the pandemic, the dairy industry perhaps was the worst affected. Milk is highly desirable, an essential commodity.

The UK average farm-gate milk price for February 2021 is 29.75 pence per litre (ppl). This represents a 2.1% (0.65 ppl) decrease on January 2021 and a 3.2% increase on the same month last year” (Gov.uk, 2021).

Hospitality, airlines and food service were hard hit by the restrictions and this resulted in a

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dramatic decrease in the demand for milk (Shepherd, 2020).

According to the AHDB’s December forecast, the UK milk production is expected to total 12.56 billion litres for 2020/2021, with the 2021 calendar year expecting to be around 12.59bn litres, up by 0.5% on 2020. The dairy industry has adapted since the first lockdown last spring and restrictions this spring are not the same of those the previous year. It is likely that production will be up by 1.2% between April-June from the previous year. A relaxation in lockdown measures this spring, the increase in food service demand could increase processing capacity.

The difference between the lockdowns this spring compared to last is that more foodservice outlets have been able to be open. This, coupled with the introduction of a vaccine programme being widespread across the UK, allows a greater demand for milk produce in these industries, albeit not quite at normal levels with the stay at home / stay local rules still implemented.

The continued pressures and uncertainty regarding the pandemic will keep pressures on the dairy industry certainly for the first part of the year with the hope it’ll improve throughout.

Conclusion Galbraith farm consultancy services continues to grow and has been very busy over the last 18 months.

Figure (AHDB, 2021).

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A proportion of the work we are undertaking for clients at the moment is as follows: • Whole farm reviews • Farm business consultancy work preparing budgets and budget vs actual analysis • Subsidy advice and grant applications • Looking at diversification opportunities • Day-to-day farm management advice • Management of contract farming agreements.

Moving forward, clients continue to speculate over the future of farming subsidies and speculation that subsidies in Scotland may follow the English proposals of removing direct support by 2028. It is interesting to note some of the objectives of the new subsidy regime in England, noted on the DEFRA website: • Introducing the Environmental Land Management scheme to incentivise sustainable farming practices, create habitats for nature recovery and establish new woodland to help tackle climate change.

• Investing in improving animal health and welfare as part of our sustainable farming approach. This will initially focus on controlling or eradicating endemic diseases amongst cattle, pigs and sheep.

• Direct Payments will be reduced fairly, starting from the 2021 Basic Payment Scheme year, with the money released being used to fund new grants and schemes.

• Launching a Farming Investment Fund, which will support innovation and productivity.

• Simplifying and improving existing schemes and their application processes further from January 2021 to reduce the burden on farmers, and we will take a modern approach to regulation, cutting unnecessary red tape for farmers and working together with industry to design a more targeted regulatory system England is therefore likely to undergo some significant changes over the next few years, which will give rise to significant challenges. In Scotland, the next subsidy steps remain unclear however it is important to note Scotland has much different land use challenges compared to England.

Moving forward it is vital farmers keep on track of subsidy changes, in order to take advantage of the new proposals.

If you have any farm consultancy queries please don’t hesitate to make contact with your local office. n

Martin Rennie 07899 923 138 martin.rennie@galbraithgroup.com

Figure: (Gov.uk, 2021)

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Morton’s Milk D&A Morton began farming at Low Carston Farm in 1988 before purchasing Auchinbay Farm, situated in the rural parish of Ochiltree in Ayrshire.

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orton’s Milk was established in February 2020 to run in tandem with the original farm business producing, high-quality milk from their herd of 300 Holstein Friesian cows. The milk produced is sold through their self serve vending machine situated on site, with the majority of the milk being sold to Graham’s Family Dairy. The Morton family David and Gillian and their two sons Jack and Jamie, are passionate about their work, always striving to maintain high standards in all aspects of their business.

The Morton family have been longstanding grazing tenants of Barskimming Estate, which is managed by Galbraith in Ayr. The Mortons are forward-thinking dairy farmers who understand the importance of diversification to increase business profitability and earn a supplementary income. In the current climate, prices continue to fluctuate across all agricultural sectors. For dairy businesses in particular, it is vital to alleviate the constant pressure from price cuts.

The business expanded in 2020 with the creation of Morton’s Milk and the launch of their fresh farm milk vending machine located within their

new Farm Shop. The venture has proved very popular, allowing customers to purchase fresh milk dispensed into reusable glass bottles.

The cows at Auchinbay are milked three times a day; butterfat is on average approximately 3.95% with protein at 3.2%. Mr Morton states ‘The wellbeing of the cows at Auchinbay is key to producing high-quality, nutritious milk’. The cows graze for six months of the year on goodquality pasture while during the autumn and winter months they are housed in state-of-the-art sheds benefiting from climate-controlled curtains to allow air flow and sunlight to circulate. Cow comfort and herd health have contributed to an average production per cow of 10,100 litres of milk from only 2.3 tonnes of concentrate per cow.

Covid-19 and the resulting economic volatility have had a significant impact on many businesses across the UK. Morton’s Milk have been agile and proactive in responding to the crisis through their most recent venture, a self-serve coffee house located next to their farm shop. The coffee house opened in September 2020 offering a select range of tea and coffee together with confectionery and home baking, and

a range of gifts. February 2021 has been the most successful month to date for the business with customers appreciating the environmental benefits of buying local and enjoying the fresh milk and superior quality local produce. The pandemic has given Morton’s Milk the opportunity to become a progressive business by providing customers with a safe and socially distanced solution to shopping during these surreal and challenging times. The family’s innovative website, now offering click and collect, has also helped to meet customers’ needs by providing convenience.

The Morton family remains confident that customers will continue to demand the quality and traceability that the business can offer. The future of agriculture is reliant on forwardthinking farmers who are prepared to invest in new ventures, whether it’s a milk vending machine, farm shop or better milking facilities. n

Mairi MacDonald 07342 053 318 mairi.macdonald@galbraithgroup.com 27

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Regenerative Agriculture – What is it all about?

There has been a notable ‘climate shift’ in the arable regions of Northern Europe, including the UK.

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trend to less reliable rainfall or an overabundance in autumn, winter and spring has increased production risks for our cereal cropping and other crops, while the greater incidence of high intensity rainfall in all seasons has heightened the vulnerability of bare soil to erosion.

Declining annual rainfall experienced over the last seven to 10 years has severely impacted the financial viability of cropping and grazing enterprises alike. These events have highlighted a fundamental lack of resilience in our current soil management and arable production systems.

Discussions on adapting to climate change are irrelevant unless they focus on rebuilding healthy topsoil. Building healthy groundcover, active root growth and high levels of microbial association are fundamental to the success of any endeavour to build new topsoil. This is what regenerative agriculture is all about. For it to work we need to address five objectives:

A change to farming with a regenerative base has many advantages including: • Fewer inputs (reduced variable costs).

• Reduced horsepower and fuel.

• Higher gross margins.

• Less reliance on fossil fuel-based fertilisers and farm chemicals.

• Enhancement of natural soil building processes.

• ‘Reverse’ carbon footprint - more carbon sequestered than emitted.

1. Less disturbance of our soils - tillage destroys structure.

• ‘Reverse’ nitrogen footprint - more nitrogen fixed then emitted.

2. Protection - keep the soil covered at all times, this is critical to rebuild soil health.

• Increased water use efficiency due to lower evaporative demand.

3. Diversity – used to be called “mixed farming” – reduce monoculture.

• Improved-soil water balance due to hydraulic lift and hydraulic redistribution.

4. Roots - keep all roots active - shallow, deep, fibrous and tap roots, keep them healthy.

• No bare soil.

5. Livestock – grazing of plants pumps more carbon into the soil.

The most meaningful indicator of the health of our soil is whether it is being formed or lost. If soil is being lost, so too is the economic and ecological foundation on which production and conservation are based.

In addition to the loss of soil itself, there is a continuing reduction in the organic carbon content of our topsoils. Losses of carbon of this magnitude have immeasurable economic and environmental implications. Soil carbon is the prime determinant of agricultural productivity and water quality; the carbon and water cycles are inextricably linked. Organic matter holds approximately four times its own weight in water. The most beneficial adaptation strategy for climate change would therefore be one that focuses on increasing the levels of both carbon and water in soils.

There is an urgent need for our agricultural industries to adapt to climate change. To be effective, the strategies employed will require radical departures from ‘business as usual’. It is possible that global warming could accelerate even more rapidly than observed to date. Fundamental redesign of agricultural production systems will enable the sequestration of more carbon and nitrogen than is being emitted, as well as enhancing soil water retention, improving the resilience will restore the quality to our farmed soils. These much-needed changes will assist the agricultural sector to deal confidently

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with a changing climate. Rather than increase costs, mitigation of climate change via the adoption of regenerative soil building practices would bring net financial benefits to the arable farm.

• Reduced financial risk.

A new aspect of agriculture is becoming apparent with the adoption of productive and resilient agricultural practices that enhance net sinks for atmospheric carbon having a revitalising effect on our soil. Furthermore, farming, with a regenerative base would enhance the resilience of our soils to the range of climatic extremes that have become all too apparent in recent years. The development of an appropriate incentives framework for regenerative agricultural activities would reverse the farm sector’s carbon and nitrogen footprints (more carbon and nitrogen sequestered than emitted) and improve food security.

The focus on the Natural Capital of our land and the agricultural industry is about to create new income streams, an ability to ‘harvest’ new statutory financial support and revolutionise our agricultural practices.

As a firm with a strong agricultural pedigree, we can guide and assist those who want to take full advantage of the opportunities ahead. n

Martin Rennie 07899 923 138 martin.rennie@galbraithgroup.com

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| Rural Matters | Summer 2021

Future of Farming Climate change targets are changing everything, Tom Warde-Aldam reports. For farmers, that includes producing environmental benefits.

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he passing of the Agriculture Act and the publication of The Path to Sustainable Farming: An Agricultural Transition Plan 2021-24 have clarified that Government income support into the rural economy is about to change radically.

These are major developments and while they apply to England only, similar provisions are likely to be enacted in Scotland sooner rather than later.

Over the past two decades, we have seen financial support for agriculture move from commodities to land and now via ELMS (the Environmental Land Management Scheme) to be targeted at ‘public good’ funding. This new focus is driven by the climate change challenges that face us all and is aimed at environmental improvement.

The farming Industry is in a unique position to improve the environment as well as to mitigate and develop the actions needed to reduce global warming. ELMS, carbon sequestration and the development of Biodiversity Net Gain (BNG) will be the mainstays of the agricultural industry’s actions to produce a better climate. In future years, farmers and land managers will be paid to deliver these benefits. Few, if any, farmers will be able to ignore them.

Because of these demands, approaches to farm and land management are set radically to change. As well as producing the best crops and livestock for a demanding food consumer, we are also going to be farming the environmental benefits that will allow the development of construction for homes, commercial premises and UK infrastructure generally.

Future farm management is going to rely on ‘harvesting’ the support mechanisms available as well as being focused on profitable commodity, food and livestock outputs. The farming of ‘marginal’ land that does not yield competitively has to be redefined and contribute towards overall farm income.

BNG may well be the route to utilising this marginal land to its best output and we will frequently have to reassess our traditional perceptions of value.

‘Public good’ and ‘doubling nature’ remain imprecise phrases. They still require clarification and are being developed through Natural England by debate and consultation across a wide array of stakeholders; not just industry representatives (NFU, CLA, TFA etc), but also non-government nature organisations and the increasing activity of individual pressure groups, many of whom see opportunity to promote special interest issues.

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As professional advisers, we currently have an unprecedented opportunity to help mould the next generation of farm & land management techniques...

At a national level, BNG is currently dealt with as part of planning policy in the National Planning Policy Framework (NPPF). There is an emphasis on the need for renewed biodiversity to be resilient to current and future environmental pressures and for coherent ecological networks to be established, but there is currently no specified proportion of gain to be achieved. This is set to change as a result of the upcoming Environment Bill, to be debated in the next Parliamentary sessions. This includes a requirement for future developments and schemes to achieve a 10% - plus BNG, to be maintained for a 30-year period.

This Bill should be enacted in late-2021, making BNG a statutory development requirement by 2023 as one of the levers to help leave biodiversity in a better state post-development. It is reasonable to expect that planning applications determined a mere year from now will require at least a 10% gain as planning authorities start to implement their policies. On this basis, many current projects already being promoted through the local planning process will require BNG measures and the requirement for BNG solutions will rapidly come to the fore.

This will involve integrating biodiversity enhancement into on-site measures or funding off-site schemes that provide the desired biodiversity gain. The aim of the policy is to mitigate biodiversity loss because of development and help to restore and grow ecological networks.

As professional advisers, we currently have an unprecedented opportunity to help mould the next generation of farm and land management techniques and opportunities. The status quo is changing and we need to ensure that we help steer it in a direction which can help sustain the viable core of our existing industries.

At Galbraith, we are already actively involved in a major proposal for BNG delivery on a farm-scale project. This cutting-edge initiative involves detailing the delivery process, assessing potential returns and negotiating and documenting contractual options. In tandem we are also in discussions with residential and commercial developers, planning authorities and landowners across England to explore opportunities and to help steer the practical application of the emerging policy. n

Tom Warde-Aldam 07718 523 032 tom.warde-aldam@galbraithgroup.com

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Land Use vs. Land Ownership We live in an era defined by a lack of definition. New terms and concepts are easily coined, but a scratch to the surface when seeking greater clarity is more often than not frustrating, and while the meaning or intent might be within reach, the detail proves evasive. The most recent step down the road of land reform is a striking case in point.

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he Scottish Land Commission’s (SLC) recently published discussion paper (February 2021) focuses on the concentration of land ownership in Scotland, and sets out legislative proposals which aim to address the ‘existing position’, i.e. the ‘problem’ in the eyes of those advocating more change.

The key proposals put forward by the SLC are: • The requirement for significant land holdings to publicly engage on, and publish, a Management Plan.

• A Land Rights and Responsibilities Review (LRRS) process, a practical means of review where there is evidence of adverse impacts.

• A new public interest test that could determine whether significant land acquisitions create risks of concentrated power.

Three succinct points on the face of it, but scratching the surface here is imperative to understanding the implications and this, in turn, leads us into a world where definition and clarity are scarce.

The proposed requirement for the owner of a landholding to publish a management plan, to demonstrate intent and delivery against the LRRS, is, I believe, tempered by scale rather than concentration. There is a recommendation that anything

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between 1,000 and 3,000 hectares would fall within this remit, but I would suggest that this scale-based method is too hazy, too open to error, and would also pass over those landholders who were in possession of smaller areas with the ability to have greater effect on public interest.

The second measure suggests a review mechanism, with land ownership protocols developed by the Scottish Land Commission becoming statutory codes of practice, similar to those developed by the Tenant Farming Commissioner (TFC) in relation to agricultural holdings. With the setting of a code of practice, comes the antithesis, which is the ability to allege a breach to the code, which in its turn requires investigation and remedial action. To avoid huge amounts of public time and money being absorbed in thorough investigation of alleged breaches, the codes and the review mechanism would have to be absolutely clear and well defined, and while I am aware that they are currently undergoing formation, there is a long way to go.

The third measure is designed to assess “whether a specific significant acquisition of land is likely to create or perpetuate a situation in which excessively concentrated power could act against the public interest." This would require a test in advance of a transfer of land, which includes not just a sale, but also via inheritance.

The test would need to be initiated by the person acquiring or receiving the benefit of the landholding ahead of the transfer, and the results of the test could determine whether or not the transfer proceeds, and whether, if it does, there are conditions imposed upon it. This alone has massive implications for the property market and individual property rights and the Scottish Government has acknowledged this in parliamentary debate. It is therefore worrying to see this measure being lumped in as a recommendation from the Just Transition Commission, set up by the Scottish Government to guide Scotland towards being a net-zero nation. The public interest test has yet to be examined in any detail by any authority in Scotland.

All three measures suffer from a lack of detail and definition. The first measure requires a clearer scale, and points uncomfortably to the fact that the test is aimed at large land owners rather than focusing on land use. The discussion paper identifies ‘concentrated land ownership’ to be at fault rather than large land or private land ownership yet there is an ongoing undercurrent throughout, that scale is still the problem, indeed on the following page the review then concludes despite the earlier point that ‘concentration of land ownership and its direct influence on the public interest with adverse consequences…is amplified by large scale ownership’.

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| Rural Matters | Summer 2021 The paper verges on ambiguity and there is a suggestion of frustration in the inability to reach the desired result.

The public interest test is unnerving in the lack of detail as to what a test might entail, and I would suggest that unless there is more transparency provided here, that it could potentially impede or obstruct investment in land and property through uncertainty.

Having passed commentary on the SLC’s discussion paper, I think it important to look at the public perception of Land Reform. To inform priorities for the Scottish Land Commission in the run up to the five-year evaluation of the Land Reform (Scotland) Act, the Scottish Government commissioned research to investigate the public's understanding, attitudes and priorities for land reform.

Rather predictably, the lack of previous and current interest in community engagement with decisions relating to land has been put down to a lack of awareness. Survey respondents were asked to give up to three reasons that were stopping them from becoming more involved in decision-making about land use. The most common barriers cited by the respondents were not knowing enough about it, not knowing how to get involved, not having enough time, and not thinking their involvement would change anything. Only 17% thought that alleged inequality of land ownership is a big challenge in the years ahead.

I think that while acknowledging that there is a percentage of the population who would be keen to know more and be involved, it is also important to consider the findings from another viewpoint than that of a missionary charged with the aim to convert and enlighten. Land ownership could also be called land custodianship, it requires vision, funding and longevity to obtain the best results for all. While the urban landscape is an ever changing skyline, the rural landscape is a longer game. Investment in trees, grasslands, water courses, lochs and moorland requires long-term vision. How to use land most effectively and wisely is a challenge that rural landowners face every day.

The ability to provide a forum whereby land use and land ownership are transparent is important, but it is equally important for decision-makers that landowners, whether public, private or community group, are recognised for the practical efforts they make day in day out on land use, rather than being the subject of debate rooted in ideology. n

Poppy Baggott 07557 973 220 poppy.baggott@galbraithgroup.com

Land ownership could also be called land custodianship, it requires vision, funding and longevity to obtain the best results for all...

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Changes to Fire Regulations Scotland The new Tolerable Standards which are being enforced from 1st February 2022 require all residential dwellings, regardless of tenure, to have the correct fire alarms and adequate carbon monoxide detection systems in place.

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| Rural Matters | Summer 2021

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ew regulations, which were delayed for 12 months due to Covid-19, have been brought in following the tragic fire at Grenfell Tower in London. They will ensure that all homes have adequate protection against fire regardless of whether the occupier rents or owns the property. At present, there are no minimum requirements for smoke and fire alarms in owner occupied homes, however these regulations do already apply to private rented properties and new builds. But in a bid to increase the safety of occupants, this has been extended to all property types.

So what exactly do these new regulations entail?

By February 2022, every home must have: • a smoke alarm in every circulation space on each storey, such as hallways and landings • a smoke alarm in the living room or most frequently used room for general living • a heat alarm in every kitchen • all alarms must be ceiling mounted and interlinked • a carbon monoxide alarm installed where there is a fuel burning appliance or flue – such as boilers, open fires and wood burners.

For large estates with multiple properties, complying with these requirements as stated above could be a large expense. According to the Scottish Government, to install three smoke alarms, one heat alarm and one carbon monoxide detector, without the help of an electrician in a three bedroom house, the estimated cost is £220. However, for older properties such as large mansion houses or substantial farmhouses which may have multiple fireplaces and several storeys, the cost will be substantially more. We recently obtained a quote for one of our clients on a Dumfriesshire Estate in order to make their home compliant, which came back in excess of £3,500. Due to the expense involved in meeting these regulations, property owners should begin to budget now and gather quotes for the installation of these necessary alarms to ensure their homes are compliant prior to February 2022.

In an attempt to encourage more homeowners to fit the correct alarms and to make the expense of doing so less daunting, the Scottish Government has amended its original regulations slightly. Initially, properties required mains-operated alarms with a hardwired interlinked system, however, in the recent amendment, tamper-proof long life lithium battery alarms which are wirelessly interlinked via radio communication are now permitted a much more cost effective method of ensuring properties are compliant, but still a considerable expense.

For low-income households this is a burden, as they may struggle to find the necessary funds to meet these standards. As a means of assisting this, the Scottish Fire and Rescue Service are able to carry out Home fire safety visits which subsequently allows them to fit compliant smoke alarms in the homes of those seen as most at risk or vulnerable. However, due to Covid-19 restrictions these visits cannot take place, and have

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standards will be enforced by local authorities will have the right to use their statutory powers to demand owners fit the alarms to noncompliant houses. been replaced with an online questionnaire – which may not provide the same standard of service as a home visit but is a good use of resources whilst the pandemic continues.

• Where the cost of installing detectors would be excessive (this would be for issues such as a large level of structural alteration needed to install alarms, rather than the cost of the alarms themselves) • Where the landlord intends to install detectors within a reasonable timescale as part of a programme of upgrading a property.

These new standards will be enforced by local authorities that will have the right to use their statutory powers to demand owners fit the alarms to non-compliant houses. As a method of ensuring compliance, prior to selling a property it must be clear in the home report that all necessary alarms are installed within a property resulting in an additional expense for those looking to move house.

These changes will have little impact on private residential lets, as they are already required to meet the Repairing Standard, however, this will impact properties let as part of agricultural tenancies. The Repairing Standard is set to apply to these properties from 28th March 2027, however, these new standards in connection to fire alarms will be applicable well in advance of this date. This change provides an insight into the responsibility and liability a landlord is set to face when leasing to agricultural tenants, when their duty of care had previously been minimal for tenancies of this nature.

Despite the cost and responsibility associated with installing these alarms, they will provide peace of mind to all homeowners and should assist in minimising the risk of fire in our homes.

For any advice or guidance in relation to property compliance, or for assistance with ensuring your property meets the necessary standards, please do not hesitate to contact your local Galbraith team. n

The legislation does include some exemptions where lesser levels of protection are acceptable. This minimal list includes the following: • Where the proximity of an open fireplace would make a detector impracticable

Rose Nash 07342 053 317 rose.nash@galbraithgroup.com

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Torrisdale Castle Estate - Coping With Covid Torrisdale Castle Estate is around 1,200 acres in size and is situated on the east coast of the Kintyre peninsula, overlooking the Isle of Arran. The estate has been owned by my family for around 125 years but has significantly changed over those years, like any other diversified property.

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he estate includes a selfcatering business, renewable energy in the form of a 99kW hydro scheme and a 170kW biomass plant, and is home to the Beinn an Tuirc Distillery, where the awardwinning Kintyre Gin is produced.

For us, 2020 kicked off in a whirlwind of activity as we commenced the building of our new gin school and estate café. The gin school will offer gin making classes – both day classes and weekend courses – and the café will provide visitors with light lunches and local produce, much of it sourced from our walled garden.

With a projected cost of around £250,000, part of which has been funded by Highlands and Islands Enterprise, this was a significant investment for us, but little did we realise what was to come next. By the end of March 2020, as the timber frame was being constructed, building work was abruptly suspended for several months and we found ourselves in a nightmare more akin to an episode of Grand Designs!

During the initial lockdown and in the preceding months, the signs were starting to show that a local, more sustainable offering for tourism businesses was going to be key. This is an ethos we were already following, however how could we capitalise on this growing market in the years to come?

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The initial work we undertook during lockdown was to start cultivations in the walled garden. The work was already planned to support the new café, but we brought this forward by a year. A large polytunnel was erected next to an existing orchard, and we planted potatoes and other vegetables, and cleared ground in an effort to get ready for what we hoped would be a full season in 2021.

On the gin side, we geared up our online marketing, selling four times as many bottles online during lockdown than we do at Christmas time. Online tastings became the norm, and we have undertaken these for private banks, solicitors, accountants and other professional groups as part of their corporate hospitality. As we are based so remotely, Zoom is a much cheaper option than attending a gin festival four hours away and is a better method to promote your brand.

On the self-catering side, despite there being no Government assistance, we hunkered down and ended up full to the brim with customers from the 15th July up until the second lockdown before Christmas. We were so heartened by the demand, that we once again brought forward a future plan and applied for planning consent to erect three bespoke cabins adjacent to the gin distillery.

Once constructed mid-2021, these will offer a unique glamping experience to customers, and will tie in with our café and gin school, allowing guests to come for a weekend, make their own gin, go foraging with our resident expert, and provide the flexibility for us to create more pop-up events on the estate.

We are only now putting the finishing touches to the café and gin school project, in the hope that we will be able to open soon. It has been a blow to miss a whole season, but we do feel that once the floodgates open, we will benefit from the ‘new normal’ and the desire, at least in the short term, for staycations. n

Niall Macalister Hall 07971 458 354 niall.macalisterhall@galbraithgroup.com

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| Rural Matters | Summer 2021

...The Tribunal recognised that the level of a consensual rent might feasibly be double that of a strictly no-network assessment

The Electronic Communications Code Rules are becoming clearer as work progresses on upgrading mobile network. Mike Reid reports.

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he UK Government introduced the new Electronic Communications Code in December 2017 to make it quicker and cheaper to roll out new telecommunication sites and upgrade old ones. These objectives have not been achieved as the mobile operators took the opportunity to, in some cases, try to reduce rents by over 95% which was met with resistance from landowners, so a period of stalemate set in.

Cases were taken forward to the Lands Tribunal for Scotland and the Upper Tribunal (Lands Chamber) for English and Welsh cases. We have seen more tribunal cases in the three years since the new code came in than under the previous 30 years but we are starting to see clarity on some aspects of the new code.

Three-stage approach to assessing rental values On Tower UK Limited V J H & F W Green Limited 2020 (the Dale Park Case) was the first to consider the renewal of a rural mast agreement in England. The tribunal adopted a three-stage approach to assessing the rental value taking into account the individual characteristics of the site: Stage 1 – Assess the alternative use value of the site This site was in woodland on a rural estate with an estimated alternative rental value of £100/annum. However, where a site has genuine prospects for an alternative use, such as a yard or car parking, a higher figure may be appropriate.

Stage 2 – Consider the additional benefits to the tenant There were specific benefits to the tenant granted in the lease, such as entering onto the landowner’s other land for temporary works, rights to install an emergency generator and to carry out trimming to the landowner’s

trees. The tenant also benefited from a rolling break clause after five years.

The Upper Tribunal awarded £600/annum for these rights.

Stage 2 highlights the importance of agreeing the specific lease terms in conjunction with the site payment and not separately. Different lease terms or other circumstances would result in a different stage 2 figure.

Stage 3 – Consider the adverse effects on the landowner In this case, these effects included the impact of third party access into the heart of a rural estate in close proximity to let residential properties, the occasional use of a temporary generator, increased access during upgrading activities and loss of amenity from the mast itself. The tribunal awarded £500/annum for these impacts but other sites may vary depending on their individual circumstances.

The three stage assessment produced a rent of £1,200/annum, and while applying the same approach to other sites would result in a different figure, this does start to set a benchmark for other sites to follow.

In reaching its conclusions, the Tribunal recognised that the level of a consensual rent might feasibly be double that of a strictly no-network assessment allowing for an element of incentive given to the landowner and to avoid the cost of formal proceedings.

The Dale Park case may help some parties move closer to a consensual agreement but with Tribunal cases ongoing and the Government consulting on whether further changes are needed to the code, full clarity on code agreements is still some time away. n

Mike Reid 07909 978 642 mike.reid@galbraithgroup.com 35

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Offices across Scotland & Northern England

Elgin 01343 546 362 elgin@galbraithgroup.com Inverness 01463 224 343 inverness@galbraithgroup.com Aberdeen 01224 860 710 aberdeen@galbraithgroup.com Perth 01738 451 111 perth@galbraithgroup.com Cupar 01334 659 980 cupar@galbraithgroup.com Stirling 01786 434 600 stirling@galbraithgroup.com Edinburgh 0131 240 6960 edinburgh@galbraithgroup.com

Kelso 01573 224 244 kelso@galbraithgroup.com Ayr 01292 268 181 ayr@galbraithgroup.com Castle Douglas 01556 505 346 castledouglas@galbraithgroup.com Hexham 01434 693693 hexham@galbraithgroup.com Blagdon 01670 789621 blagdon@galbraithgroup.com Penrith 01768 800 830 penrith@galbraithgroup.com

Expertise Galbraith operates from 13 offices across Scotland and Northern England, bringing our clients a wealth of experience in: • Estate, farm & forestry sales & acquisitions • Estates, farming & land management • Residential estate agency • Property lettings • Natural Capital • Commercial property sales & management • Renewables and utilities • Building surveying • Commercial forestry & woodland management