The Rural Report from Howie Kent and Co

THE RURAL REPORT WINTER 2023

Christmas Greetings We would like to take this opportunity to wish all our clients a very happy Christmas and prosperous 2024. We are extremely grateful for your support in the last 12 months as our business and the services we offer continue to grow.

Top Tenant Tips Commercial Property expert Sarah Thurmer offers up her advice on future-proofing for quality tenants. Find out more on page three.

Our Year in Pictures Our Shropshire and Essex based team have enjoyed another busy twelve months. Highlights from our social media channels are on page four or follow us @howiekentandco

Navigating a Challenging Market Our Autumn Rural Report focussed on how the UK agricultural sector is facing a unique set of challenges, with rising input costs, labour shortages, and an uncertain economic outlook putting pressure on margins. These conditions only serve to highlight the importance of business diversification and the need to create the best possible return on commercial assets.

Experienced landlords with a proven track record of commercial property lettings, understand the unique challenges and opportunities associated with this sector. While landlords may have established successful relationships with existing tenants, the everchanging economic landscape demands continuous adaptation and strategic planning to maximise returns and maintain a competitive edge. Recent economic uncertainties, including rising interest rates, have undoubtedly impacted the commercial property market.

Businesses are tightening budgets and re-evaluating their workspace needs, leading to a more cautious approach to property expansion or relocation.

We understand that challenges can also present opportunities for commercial property landlords.

Our commercial property expert Jon Bartlett offers his advice on page two

ENTREPRENEURIAL – RELIABLE – PROFESSIONAL

PROPERTY EXPERTS

Impact of Interest Rate Hikes Recent interest rate increases by the Bank of England have made borrowing more expensive for businesses, causing some to postpone or cancel plans to move to new premises. This has led to a decline in commercial lettings, with a recent report from a major commercial letting’s agent showing a 12% decrease in transactions compared to the same period last year.

Economic Slowdown and Reduced Demand The wider economic slowdown is also having an impact on the commercial property market. With businesses facing tighter margins and reduced consumer spending, many are opting to remain in their current premises rather than incur the costs of relocation.

Adapting to the Changing Market The UK's commercial property market is facing headwinds, but challenges always present opportunities in any market, especially for those landlords who can differentiate their offering and understand how to attract good quality tenants seeking stability and value.

Given the current economic climate, commercial landlords should be prepared to adapt strategies to attract tenants. Here are some key considerations for landlords seeking to increase their chances of securing commercial lettings and to thrive in this evolving market:

BE FLEXIBLE ON WORKING HOURS Understand the needs of potential tenants and be willing to accommodate flexible working hours or access arrangements

CLEAR ACCESS AND PARKING Ensure that the property has clear access and adequate parking for staff

WELL PRESENTED BUILDINGS Invest in maintaining the property to a good standard, both internally and externally & ensure buildings are clear ready for photos used in online adverts and particulars

REALISTIC RENTS Set rents that are competitive and reflect the current market conditions

CONSIDER DIFFERENT BUSINESS TYPES Be open to renting to a variety of businesses, not just those traditionally associated with farm lettings

SOME OF OUR RECENT LET AGREED TENANTS’ BUSINESS TYPES 1. Sustainable packaging solutions 2. Scaffolders 3. Temporary event/prop storage 4. Printing companies 5. Appointment only online car sales 6. One to One personal trainers 7. Short term infrastructure storage 2

BE PROACTIVE AND QUICK Prospective tenants have more commercial property to choose from in this current market, therefore, it is essential to respond to lettings enquiries quickly and be prepared to arrange / attend viewings at short notice.

TOP TENANT TIPS So you have secured yourself a great tenant, and may be wondering the best way to keep them in-situ for the long term?

Our commercial property expert Sarah Thurmer liaises with tenants every day, and offers her top tips to future proof your commercial relationships.

We are all feeling the pinch lately, and your tenants will be feeling it too. It’s paramount that landlords do what they can to maintain contact with their tenants, keep the relationship positive and help your tenants in any way you can. The winter months are often the hardest with energy costs rising, bad weather affecting logistics and workers falling ill more often; so now is a key time to show your tenants you are on their side.

Here are some of my tips on ways you can achieve this: Timely reminders on any changes for access hours over the Christmas period Update contact information if you are away; who should they contact if they have a problem?

Find out if your tenants are away over Christmas and offer to check in on their premises e.g. for frozen pipes Keep access clear from snow Provide grit for icy conditions or a reminder on where it is located on site Check pipes are insulated Offer a generator in case of a power cut Making farm machinery available for loading in bad weather Updates on inclement weather which may restrict access to site A simple Christmas gift i.e. bottle of wine, cheese and nibbles will go a long way A Christmas card with some kind words through their door, or a physical visit to shake a hand and/or raise a glass.

EPC ADVICE IN COMMERCIAL PROPERTIES An Energy Performance Certificate (EPC) rates how energy efficient your building is using grades from A to G (with ‘A’ the most efficient grade). At present all non-domestic buildings (unless exempt, see below) trigger an EPC requirement when they are constructed, sold, let or the lease is renewed. It must be available to any prospective buyer or tenant free of charge as soon as the building is listed.

What are the current regulations?

From 1st April 2023 regulations have required all privately rented non-domestic property to have a minimum EPC rating of ‘E’, including those where a lease is already in place and a property is occupied.

Therefore, all non-domestic landlords must not continue letting a non-domestic building with an EPC rating of band F or G and arrangements must be made to reach a rating of ‘E’.

If the property cannot be improved to meet the minimum of rating ‘E’ there is a route for registering an exemption through the PRS Exemptions Register.

There are however certain exemptions which may mean your building does not require an EPC. At present there is no requirement to declare these exemptions.

The 2020 Energy White Paper published by the Government confirmed that the future trajectory for non-domestic Minimum Energy Efficiency Standards will be EPC B by 2030 as part of their net-zero campaign.

This is still in consultation phase but is worth bearing in mind when considering your EPC obligations.

To find out if your building is exempt, and for more guidance, read our full article at howiekentandco.com/advice-on-epcs-incommercial-properties/ or scan this QR code:

If you are unsure if your building needs an EPC or would like any advice on the matter, please give us a call on 01621 212 651

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Our year in pictures

CONTACT Welbatch Farm Hook-a-Gate Shrewsbury Shropshire SY5 8BA 01743 404925 enquiries@howiekentandco.com howiekentandco.com

Wicks Manor, Witham Road Tolleshunt Major Maldon Essex CM9 8JU 01621 212651