AgriView Winter 2022 by fishergermanllp

AgriView

Winter 2022

Grant funding – All you need to know Farmland market update – Autumn 2022 What’s new in the Natural Capital market?

Rural update from Fisher German

Banbury

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Meet the team

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Our 29 offices provide experts in all these areas. If you would like Cwmbran Newcastle 8 local 23 work guidance on any rural property matters, please contact one of us and we will Richmond 9 toDoncaster 24 ensure you get to talk the very best advisor.

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Head Office

26 Stuart Flint Head of Agency Sector

Hereford

David Merton Head of Rural Sector

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01530 410806

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29 13

3 28

14 High Wycombe david.merton@ﬁshergerman.co.uk

15 19 2

Southampton

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Stafford Thame

01295 226281

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Hungerford

David Kinnersley Agribusiness

Darren Edwards Sustainable Energy

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Ashby de la Zouch

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Helena Tibbitts Valuation

Charles Meynell Expert Witness

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charles.meynell@ﬁshergerman.co.uk

John Ikin Compulsory Purchase

Scott O’Dell Planning

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Head Office

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/FisherGermanLLP

Ben Marshalsay Development

Paul Brown Joint head of Building Consultancy

01530 567465

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William Gagie Minerals

Richard Gadd Farm Agency

01530 410859

01295 226283

william.gagie@fishergerman.co.uk

richard.gadd@fishergerman.co.uk

Welcome High commodity prices and escalating input costs have continued to put pressure on agricultural production. These factors, combined with the ongoing conflict in Ukraine and unpredictable weather, persist in pushing the resilience of those within the industry. In this issue John Price considers the Sustainable Farming Incentive (SFI); although thought to have low payment rates, it offers a low-risk option to assist agribusiness resilience. We also explore the different grant funding opportunities that may be obtained. The application windows for some of the funding are short, whilst other grants are still in the discussion phase. It is important therefore that rural businesses understand what is available to them, along with the timescales for application, planning early to grasp opportunities when possible. Environmental, Social and Governance (ESG) is becoming increasingly important not just in our day-to-day work, but for our rural clients too.

We speak to key professionals in our planning, rural property management and sustainable energy service lines to establish how ESG is affecting the advice that they are giving to our rural clients. Many diversifications are also taking an environmental and sustainable approach. Philip Chapman explains how he has helped a thirdgeneration farming business install renewable energy in order for their business to run off cleaner, green and sustainable energy. As we draw towards the end of 2022, Richard Gadd updates us on this year’s farmland market which has continued to perform well and where the competition for

land remains strong. We hope that you find this issue of AgriView of interest. If you would like to learn more about any of the matters featured, please do not hesitate to get in touch. We would be very pleased to help.

David Merton Head of Rural Sector 01530 567466 david.merton@fishergerman.co.uk

Grant funding opportunities? As we approach the end of the second year of Defra’s agricultural ‘Transition Period’, higher commodity prices may have temporarily offset the impact of reducing direct subsidies on farm business profits. However, with an average 40% BPS reduction by 2023, and profitability likely to be further impacted by the latest agricultural price index increase at 33.1%, many businesses will be considering what opportunities ‘Public Money for Public Goods’ might present to them. With some funding limited to short application windows, and some still at discussion phase, it is difficult to keep track of grant availability. At the time of writing, DEFRA has confirmed it is undertaking a review of how best to deliver environmental schemes in the future. However, below is a summary of the current schemes and our understanding of future schemes.

Environmental • C ountryside Stewardship: CS in the form of five-year Mid Tier and Higher Tier schemes as well as two-year capital-only schemes are expected to be available for new applications until the end of 2023. Defra recently announced a provision for five-year extensions to older-style Higher Level Stewardship schemes where these are still in place. CS provides valuable additional income for more marginal land, as well as management options within an arable rotation and to support grass ley establishment. Capital items available include improvements to farmyards where water quality is a priority, fencing, stone walling and hedge restoration. The five-year agreement application window is now closed until next spring, but capital grants are available until the funding is fully allocated. • E nvironmental Land Management: ELM will eventually replace Countryside Stewardship. We know this will take the form of three tiers:

1. Sustainable Farming Incentive – This is the lowest ‘tier’ of ELM. Some parts of the scheme are available now; pages 8-9 provide further detail. 2. L ocal Nature Recovery Scheme – LNR is expected to be launched in late 2024. In a similar way to CS it will fund the restoration and creation of habitats on farms, e.g. management of speciesrich grassland, restoration of wetland habitats, and creation of bird nesting and feeding plots on arable land. 3. L andscape Recovery – This scheme is for landowners and farmers seeking to take a more ambitious and larger-scale (500–5,000ha) approach to habitat restoration and deliver environmental outcomes. Projects will have bespoke implementation plans and are likely to be longer-term (e.g. 20 years) with future safeguards in place, such as conservation covenants. Defra have recently announced 22 pilot projects that have been awarded funding under the first round, with a further round expected next year.

Productivity • F arming Investment Fund: 1. F arming Equipment & Technology Fund – This fund provides a fixed contribution towards costs of a specified list of farm equipment such as livestock handling systems, direct drills and grain stirrers. The application process is online and straightforward; the next round of the scheme is expected to launch in late 2022. 2. F arming Transformation Fund – This scheme provides grants towards larger capital items and projects that improve productivity, profitability and environmental sustainability, e.g. processing equipment to add value to agricultural products, construction of reservoirs, and use of robotics for arable and livestock production systems. Grants between £25,000 and £500,000 have been awarded, but at this stage Defra have not indicated whether the scheme will reopen for further funding rounds.

Woodland • E ngland Woodland Creation Offer – EWCO supports new woodland planting. Up to 100% of standard costs are available including the trees, guards and other woodland infrastructure. To qualify for the scheme at least one hectare of new planting must be undertaken in blocks of at least 0.1ha. Annual maintenance payments of £300 per hectare for 10 years are also available. Applications are open all year. • T here are also grants available for Woodland Management Plans, Woodland Tree Health Improvement and Capital Woodland Improvements.

• S lurry infrastructure grant – From autumn 2022, grants of between £25,000 and £250,000 will be available to fund up to 50% of the costs of replacing, expanding and building new slurry stores to provide six months’ onfarm slurry storage. • A nimal health and welfare – Livestock farmers (for sheep, cattle and pigs) will be able to access a funded annual visit from their vet to undertake a health review and testing for priority diseases. The scheme is expected to open from autumn 2022 for three years.

Business Advice • F arm Resilience Fund – This fund provides business advice to farmers and landowners to help them adapt to the removal of direct subsidies, via one-toone consultations, farm visits and group workshops. The scheme is currently closed to applications but is expected to relaunch in autumn 2022 and remain open until March 2025.

Diversification and local projects • E nhancing Protected Landscapes – This scheme is open to all farmers within a National Park in England, AONB or the Broads. It provides a wide range of funding for projects that deliver benefits to climate, nature, community and local places. Funding of up to 100% can be available depending on the commercial outcome of a project. The scheme closes in March 2024.

• Rural Prosperity Fund – The Rural Prosperity Fund will top up the UK Shared Prosperity Fund and is expected to be a replacement for previous LEADER style funding. The fund will improve productivity and strengthen the rural economy and communities. It will support new and existing rural businesses to develop new products and facilities that will be of wider benefit to the local economy – including farmers seeking to diversify. A total of £110 million of funding is being allocated across the local authority districts who will deliver grant funding according to specific local priorities. Examples might include conversion of farm buildings, provision of food processing equipment, creation of tourist accommodation, support for a new community shop, or funding for a new cycle trail. Local authorities are invited to submit an investment plan in autumn 2022 to receive funding, which is likely to be available to businesses from April 2023. Fisher German have submitted many successful grant applications on behalf of our clients for a wide range of schemes and projects. We would recommend that you get in touch if you are considering a project that may be eligible.

Charlotte Gore Partner 01858 411218 charlotte.gore@fishergerman.co.uk

Environmental, Social and Governance Views from across the business

Environmental, Social and Governance (ESG) criteria are becoming increasingly important in the decision making of organisations. ESG frameworks assist in the planning and management of a business to ensure that their impacts on society and the environment are sustainable.. Fisher German has seen a change in how ESG has impacted on the advice we give our rural clients. In this article we hear the views of some key professionals within the business. If you have a project you would like to discuss, do get in touch.

In some respects, the planning system has always embraced ESG at its heart, well before ESG became a buzzword.

Liberty Stones Planning

Developments have always had to mitigate their impact, especially those in a rural location, whether that be through the provision of bat mitigation or contributions to create new school places and affordable housing. The introduction of the National Planning Policy Framework (NPPF) in 2012 was a clear milestone, formalising three overarching objectives to achieve sustainable development. This is achieved through the delivery of economic, social and environmental benefits at a local level through both policy in local plans and in decision making. For most of our projects it is clear where these benefits lie: the delivery of a solar park to power a local hospital, the provision of affordable housing to ensure those at greatest housing need have a home in a location where they have

connections, a training academy to get people into work, an eco-gym powered by its users. There are less obvious benefits too: the longterm protection of a historic building through the delivery of an optimum viable use, the creation of a natural burial ground on a farm, even the over-provision of open space on a new housing scheme, can have significant benefits to wellbeing and bringing communities together. The smaller additions to a scheme also make a notable difference through maximising energy efficiency and the delivery of smallscale, localised renewable energy integral to a scheme. There are also times when these benefits conflict; a fine example is the feat of creating an energy-efficient listed building. The planning system has always led on ESG and the future is a clear prioritisation of the environment, where it will be a mandatory requirement to leave the places we create better than we found them.

The drive for net zero and increasing ESG prominence have reinvigorated the sustainable energy sector with an abundance of opportunities for rural landowners. Despite the phase-out of subsidy support for most forms of new generation, with energy prices escalating the sector remains as attractive as ever. Opportunities exist for both commercial and utility-scale projects typically undertaken by third-party developers, as well as smaller-scale projects in which farmers and landowners can invest themselves. Finance is readily available across the board with lenders and investors keen to fund ‘green’ projects. Large-scale solar farms for generating power and battery storage projects for balancing the grid are currently in high demand with attractive rents paid for land in the right location and scale. At the smaller end of the market, the business case for investment in PV and other technologies is strong. Rising costs and volatility in energy markets mean returns on investment for self-generation are improved and allow businesses to take control of at least part of their energy demand. Equally many farms and rural businesses are also now examining their carbon impact driven either by their own ambition to reduce their footprint on

the environment or because of supply chain ESG pressures to cut emissions. Renewables projects can cost-effectively contribute to this. Grid access remains a significant barrier with high costs or upgrade delays in connection stifling many projects. Roof-mounted PV projects often benefit from permitted development rights, but for onshore wind in England national planning policy has been extremely challenging. However, the government indicated in September 2022 that some restrictions on onshore wind may soon be relaxed giving a boost to this sector. With returns on investment from behind-the-meter energy projects heavily determined by energy costs savings, detailed analysis of business energy consumption can be a valuable exercise in assessing project feasibility. Recording accurate energy consumption data on a kWh and cost basis is something all businesses should get to grips with given ever-increasing energy costs and the growing importance of carbon reporting.

Not only do property managers need to be mindful of environmental and social factors affecting their client’s property but regulation dictates specific levels of criteria that must now be met.

Rural Property Management

Sustainable Energy

For many rural landowners with let property, regulation of EPCs and a proposed ban on new oil and LPG boilers are also concerning challenges emerging from the drive for climate change mitigation.

The property management sector has faced significant changes in the last few years, particularly for clients owning rural land and property. The considerations that now come with rural property management are heavily impacted by ESG frameworks.

Rebecca Ruck-Keene

Darren Edwards

The Minimum Energy Efficiency Standards (MEES) regulations provide an example of environmental regulation that has a significant impact on all residential property managers. Requiring improved quality and energy efficiency of privately rented residential properties, from 1st April 2020 it became a legal requirement under MEES that all new and existing residential tenancies meet a minimum Energy Performance Certificate rating of E or above. Further regulations are proposed to increase the minimum EPC requirement to a C by 2027 and a B by 2030. This will have the greatest impact on our rural properties as many were built when the consideration for energy efficiency was not a priority. Alternative solutions like renewable energy will be costly and require significant infrastructure that may not be justifiable for an isolated rural

dwelling. In addition, listed buildings provide a particular challenge. Increasing awareness of ESG criteria creates a higher level of expectation from the customer, putting pressure on property owners and managers to provide a product that considers environmental impact. Customers are well versed in the opportunities available to them, whether this be tenants expecting properties to be fully insulated or consumers assuming that rural businesses have environmentally conscious waste management strategies. When considering alternative income streams for rural property owners, ESG has major influence on the option chosen. If planning permission is required, local authorities often expect positive social and environmental impacts. Some rural landowners are turning to biodiversity and offsetting as alternative land uses to conventional farming. Understanding ESG and managing the risks and opportunities created by these changing conditions will only become more important for property managers; it is essential to remain mindful of a certain level of risk when looking to meet ESG criteria. With technology and schemes in early stages of development it is crucial that property managers remain flexible.

Sustainable Farming Incentive (SFI): Why the scheme and associated practices should be considered despite reportedly low payment rates Changing market, subsidy and environmental conditions provide a stimulus for evaluation of agricultural systems and business resilience. Uptake of the now-available Sustainable Farming Incentive (SFI) scheme is certainly worth consideration as part of agribusiness planning, despite initially reported low payment rates. A relatively simplified process, increased flexibility and payments for existing practice across all productive land present direct motives. However, further secondary benefits, emerging practices and future stacked payments mean that early adoption of SFI may be a low-risk first step or additional step in a journey towards increased agribusiness resilience. Therefore, the devil is in the detail and consideration beyond the below listed Defra rules is needed to assess full potential.

Per ha

Actions

Arable and Horticultural Soils Standard Eligible land – Arable (inc. temp grass) and/or Horticultural Land

Introductory: £22

Intermediate: £40

Action 1: Complete a soil assessment and produce a soil management plan Action 2: Test soil organic matter (on land present with SOM data more than five years old) Action 3: Add organic matter – all agreement land at least once in three-year agreement Action 4: Winter Cover – 70% of land minimum (inc. autumn crops) All of the above plus… Minimum 20% of agreement land in multi-species winter cover

Improved Grassland Soils Standard Eligible land – Temporary Grassland and/or Improved Permanent Grassland

Introductory: £28

Action 1: Complete a soil assessment and produce a soil management plan Action 2: Test soil organic matter (on land present with SOM data less than five years old) Action 3: Have 95% of land in winter cover

Intermediate: £58/ha

All of the above plus… Action 4: 15% of land in herbal leys

Moorland Standard Introductory: £10.30 plus additional moorland payment of £265 per agreement

Action 1: Verify and record soil types (including peat) and associated vegetation (1x/10ha) Action 2: Evaluate public goods potential of moorland (update annually) Action 3: Identify opportunities to enhance public goods

2022 Soil Standards £/ha

2023 IPM & Nutrient Management £/ha

By law under the Farming Rules for Water, all cultivated land in England requires a standard soil test (P, K, Mg & pH ) every five years despite the SFI scheme. The additional cost of testing Soil Organic Matter (SOM) once per field and one year in five might look around the £4/ha mark including labour averaged over five years, hence easily covered by the standard payments. The method of soil testing is not regimented whereby SFI may give some financial aid to adopting new methods like gamma spectrometry, as well as important following savings from the use of data in variable rate applications of seed, fertilisers, lime etc. Chopped straw, green manures, FYM, digestate, biosolids and composts are already used in arable, horticultural and fodder crop rotations to increase SOM, with their importance and value ever increasing due to inflated fertiliser and fuel costs, as well as seemingly dryer springs and summers. Likewise, companion cropping (e.g. mustard with OSR), cover cropping (e.g. Westerwolds and clover before maize), undersowing and stitching-in grass leys, all provide opportunities for a multispecies cover for SFI. This is before any secondary short-to-long-term benefits from Integrated Pest Management (IPM), fertiliser cost, lime cost, water cost, reducing tillage fuel

Private Sources e.g. Soil Carbon Trading

£/ha

savings, feed ration cost etc., as a result of improved soil structure, soil fertility and biodiversity. Annual SFI payments on all eligible land whilst based on percentage obligations make adoption more interesting than initially thought. For example, a 300 ha arable holding will get £12,000 a year direct intermediate SFI payments, with maybe £7,000 left after establishing a cover crop on 20% of the land (before any secondary benefit or economic methods like homesaved seed, frost susceptible varieties and glyphosate destruction), whilst £6,600 on the introductory level without any secondary benefit. Of course, opportunity cost of cash crop establishment must be considered, but so should mid-to-long-term business resilience to input costs and climate change. Therefore, future SFI payments could potentially stack up towards the £100/ha mark, before additional benefits. Furthermore, agreements are for three years and with opportunities for annual amendments, as well as compatibility with current Countryside Stewardship schemes and indeed opportunities into private sources e.g. soil carbon on which we are currently making some exciting progress.

Secondary benefits + business Resilience Short – long term

Uptake of the now-available Sustainable Farming Incentive (SFI) scheme is certainly worth consideration as part of agribusiness planning, despite initially reported low payment rates.

John Price Agribusiness 01905 677350 john.price@fishergerman.co.uk

Rural Diversification: Forward-thinking farm businesses embrace renewable energy Diversification can take many forms including renewable energy, processing raw agricultural products to sell directly to the consumer, tourism, leisure, and lettings. With the phasing out of the Basic Payment Scheme (BPS) over the next six years having a potentially substantial impact on many farm businesses, diversification could help to mitigate both the loss of subsidy income and risk from volatile agricultural commodity markets.

For our sustainable energy team, diversification is all about understanding our clients’ current and future energy needs, how they use that energy and how we can help them futureproof their supply through the deployment of renewable technologies. The government has committed to reaching net zero by 2050, with the agricultural industry having an accelerated target of 2040. This means that any new enterprises should have

One of our clients, the Strawson family, who run Featherstone House Farm in Nottinghamshire, are a third-generation farming business specialising in cereal and vegetable production. Ordinarily this is an energy-intensive process making renewable energy an appealing and viable option to explore to offset energy costs and support the business becoming more sustainable. We project-managed the installation of an 800kW Enercon wind turbine in 2019 to supply electricity to the farm. Renewable energy was identified as a solution to enable them to diversify away from traditional power supplies such as oil, gas and electricity and to cleaner, greener and sustainable energy. In addition to the wind turbine the family currently have both roof and ground-

a sustainability focus, whether that is using renewable energy sources, a reduced reliance on plastics and packaging or a local emphasis. Farms have great potential for renewable energies such as wind turbines and solar photovoltaics (PV) because of the oftenabundant land available and the fact that they can be very energy-intensive, or otherwise contain key grid infrastructure necessary to transport electricity around the country.

mounted solar PV at Featherstone House Farm, as well as a ground source heat pump and biomass boiler on a neighbouring property. We are currently working with them to expand their solar capacity to feed a soon-to-be-installed hydrogen electrolyser. By combining PV panels with an electrolyser system, it is possible to convert electricity into ‘green’ hydrogen and store it for later use. The need for back-up battery storage is taken out of the equation. The hydrogen can be used on the farm as an alternative source of fuel and provides a net-zero carbon energy solution, from generation to storage and use. It can also be sold, with a growing market for sustainably produced hydrogen in the UK.

Renewable energy allows business owners to reduce their reliance on the grid for electricity or mains gas; and, with volatility in the energy market, the energy savings make the decision to install renewable energy even more attractive. The outcome of a successful diversification is to bring in further income, ensuring financial risk is spread and the business can be maintained for future generations. Following the transition out of the EU, grant funding sources are currently limited. Sound advice on possible funding opportunities is crucial, and competitive lending solutions are available. Planning permission is likely to be required for the deployment of renewable technologies. Our planning team can provide further advice on securing planning compliance for such projects.

To find out more about delivering net zero and about our renewable energy experts contact

Philip Chapman Sustainability Adviser 01295 271555 philip.chapman@fishergerman.co.uk

Farmland Market Update

Autumn 2022

The key themes and market drivers across the farmland market remain consistent with our previous update in spring earlier this year. Continued demand from a wide spectrum of buyers, including more non-agricultural investors, mirrored with limited supply across the country has held prices firm. In many areas farmland values have strengthened. However, the wider political and economic events of the last six months have forced some landowners to review their position, with input price pressures across the industry, increasing interest rates and reducing subsidy payments. We expect some increased supply in the marketplace over the next 12 months on the back of increased operational costs and

potential vendors seeing robust values being achieved locally. Further debt-related and retirement sales will bolster supply in many areas, along with some vendors seeking to raise capital funds for diversification projects.

The buyers Tax-driven ‘rollover’ buyers continue to dominate the marketplace for larger-scale commercial farm opportunities. Supply of goodquality large-scale farms across the country, and across the East and West Midlands in particular, has been severely restricted in recent

years. We have seen more supply in the Eastern Counties over the last six months. Where such opportunities do arise, often privately, we are seeing some exceptional values achieved. Developers and strategic land buyers remain inquisitive for medium- and long-term freehold strategic opportunities. We expect this trend to continue with increasing capital values achieved for those genuine freehold strategic land holdings. Demand from corporate and private investors remains for carbon investment, offsetting opportunities and rewilding. Opportunities providing larger-scale conservation prospects remain in similar demand, as evidenced through the recent marketing and sale of Strawberry Hill Farm in Bedfordshire.

S trawberry

Hill Farm,

Knotting Green, Bedfordshire

A ring-fenced amenity farm with listed farmhouse, buildings and about 377 acres of grazing land, woodland, amenity land and ponds. The farm held significant ecological and biodiversity value. Significant interest was received from a range of private investors, conservation-driven buyers and carbon-led buyers. The farm sold to a conservation-focused buyer in excess of the £3 million guide price.

Non-farming, private lifestyle and amenity buyers continue to drive demand for smaller residential farms, bare land opportunities and farms with diversified income streams or potential to ‘add value’. Such value may be achieved through conversion of farm buildings or smaller leisure developments for example. The majority of smaller residential farms offered by Fisher German this year have seen unprecedented viewing numbers resulting in multiple cash-funded offers from very genuine and proceedable parties, as evidenced through the recent marketing and sale of Lees Hall Farm, Boylestone in Derbyshire.

Lees

Hall Farm,

Boylestone, Derbyshire

A mixed grassland and arable farm with listed farmhouse, traditional buildings with development potential (STP) and established touring and static caravan park. In all about 100 acres. The farm provided an opportunity for a private lifestyle or investor buyer to modernise the farmhouse and benefit from a non-agricultural income stream from the caravan park. The farm sold to a private investor with leisure interests well in excess of the £1.875 million guide price.

Values Whilst location generally dictates land values, both scale and quality play significant roles. Average values through 2022 have remained stable and, as noted earlier, in many areas have strengthened by 5-10%, or more, in some localities. Looking ahead we expect all farm types to maintain strong sale values, especially where there is some strategic potential or additional non-farming income. Many of those parties considering a sale in

2023 have been surprised at our recommended guide values, possibly unaware of the depth of local and national buyers and the competition seen for comparable properties. Larger-scale commercial farms and estates with modest residential assets will continue to perform well as many eager rollover buyers are forced to consider opportunities across a greater geography, forcing more competition into a limited number of opportunities. As input costs, interest rates and inflation remain on an upward trend, we may see values

Immediate Farm/Land Requirements Yorkshire/Nottinghamshire/Lincolnshire

Bare land or equipped farm

100 acres +

East Midlands/East of England

Commercial farm/estate

800 acres +

Staffordshire/Derbyshire

Bare land or equipped farm

100 acres +

East/West Midlands

Equipped farm

400 acres +

East/West Midlands

Diversified farm/estate

300 acres +

West Midlands

Commercial farm/estate

700 acres +

Leicestershire

Various requirements

50 acres +

Northamptonshire/Buckinghamshire

Equipped farm

300 acres +

Oxfordshire

Commercial farm/estate

500 acres +

Worcestershire

Bare land or equipped farm

150 acres +

for less accessible, poorer-quality holdings weaken. Buyers may hold off (temporarily) those land and farm investments whilst input costs remain high. We expect this trend to affect a very modest proportion of farms offered for sale over the next 12 months. We are retained by a small number of purchasers across the country to acquire farms and estates. A small selection of these requirements is shown below. Please do get in touch if you are considering a discreet sale. All enquiries will be treated in confidence.

Richard Gadd National Country Agency Team 01295 226283 richard.gadd@fishergerman.co.uk

The Green Offset was launched in 2021, providing a simple platform to bring together those seeking land to site natural capital schemes with landowners willing to explore these opportunities. One year on, there are now more than 39,000 hectares of land registered on the platform, providing offset seekers with a significant bank of land on which to explore offsetting opportunities. We asked Tom Beeley, Senior Surveyor in Fisher German’s Rural Property Management team, what’s been happening in the emerging natural capital markets. Feedback from landowners, developers, and local authorities on the concept of the platform has been very positive, and Fisher German are now working with several landowners who have received approaches through the platform to consider offsetting agreements. Some policy clarity was provided with the Environment Act gaining Royal Assent in November 2021, providing the primary legislation for the introduction of mandatory Biodiversity Net Gain (BNG) as well as Local Nature Recovery Strategies (LNRS) and legally binding environmental targets. Mandatory net gain requirements in the planning system will mean that where a net gain in biodiversity cannot be delivered within a development site, biodiversity offsets will be required to establish compensatory habitats elsewhere within the planning authority or county. These will need to be delivered for 30 years through legally binding agreements, but there are many elements of BNG and other natural capital services which require further clarity. An extensive Defra consultation published in January 2022 provided insight into some of the remaining questions and the secondary legislation now in development. While it is expected that BNG will become mandatory across England by November 2023, several planning authorities are already applying net gain with developers actively seeking offsetting to meet planning needs or in some instance on a voluntary basis. One of the challenges facing developers is that not all local authorities are currently geared up to manage the delivery of net gain or the process of offsetting which will require additional resource when they are already stretched. This is one aspect which will need

to be addressed to provide a consistent and time-sensitive delivery of development. Liquidity in the supply of habitat credits will also be essential to prevent delays to development and to meet the needs of smaller developments. Habitat banking, whereby credits are created in advance of demand, has an important role here and perhaps holds the best opportunity for landowners who have specific types of habitats that they would like to deliver on their land. It is also important to understand the concepts in the Defra Biodiversity Metric – the tool used to calculate habitat values of land. In determining a habitat value, the metric not only takes account of the area and type of habitat being lost or established but makes allowance for its interconnectedness with existing higher value habitat, condition and, in the case of habitat creation for offsetting purposes, the time taken to reach required condition. As well as providing a means of funding creation of new habitats, biodiversity offsetting can also be achieved through enhancement of existing habitats, for example improvement of existing grassland through re-seeding and changes in management or improving management of existing woodland or hedges. Understanding the calculator can help to determine the types of habitats to create and the best locations to create them in. LNRS will also be key in this respect and once developed will play an important role. The recovery strategies will effectively be local plans for nature and although not expected to lead to any land designation, it will be important for landowners to engage in the development of LNRS.

Top tips for exploring new opportunities Keep an eye out for opportunities to engage with Local Nature Recovery Strategies in your area. Consider which areas of land might be most suited to environmental uses – you may already have a good idea of this or there are plenty of existing mapping tools which can assist. Once these have been identified, consider engaging an ecologist to get an understanding of the habitat baseline and to explore the habitat value which might be created and the management plan required to deliver long-term habitat enhancement. Consider how the plan might be funded and explore which options are best suited to your requirements and are most attractive. There are often multiple funding options available through public grants and private markets of which some can be claimed simultaneously. Register with The Green Offset, it is a simple free to use platform and can be a good first step for landowners to engage with these new markets.

Tom Beeley Associate 01858 411227 tom.beeley@fishergerman.co.uk

Matching Offset Providers with Offset Seekers Developed by Fisher German, The Green Offset is a bespoke brokerage platform which seeks to connect parties who are looking for an area to site an offset, with individuals who have suitable land for siting natural capital schemes.

For Offset Providers we offer a simple way to market land for the potential provision of offset sites and other opportunities

For Offset Seekers we offer an easy and low-cost way to search for offset sites and other land requirements

Registering your land on The Green Offset platform is completely free with no commitment required. For more information, or to register as an Offset Provider or Seeker, please visit our website or call us on: 0845 437 7359