GSC Grays Magazine Autumn/Winter 2023

THE MAGAZINE ISSUE NO. 7

NOVEMBER 2023

TH E ROA D TO NE T Z E RO How is the industry responding and what benefits can the farmers that get on board expect as a result?

BIODIVERSITY NET GAIN

MANAGING CASH PROACTIVELY

An unmissable opportunity or unwanted burden?

My business is profitable, why should I be worried about cash?

CONTENTS 1

WELCOME

2

BIODIVERSITY NET GAIN An unmissable opportunity or

ISSUE NO. 7

NOVEMBER 2023

20 GROUSE SHOOT LICENSING The implications of its possible introduction in England.

an unwanted burden?

5

THE ROAD TO NET ZERO

22 WHAT NOW FOR THE SMALLER LET FARM?

8

SUSTAINABLE FARMING INCENTIVE

24 THE 'INCREASE IN SUPPLY' OF FARMLAND

A farmer's guide to SFI.

10 MODEL FARM Lowland beef and sheep.

12 MUCK AND MYSTERY Is your business compliant?

14 LABOUR SHORTAGES What can be done to address the shortage of skilled agricultural workers?

16 MANAGING CASH PROACTIVELY

Is it the start of a change?

26 RENTAL INVESTMENT Navigating complex changes in the landlord landscape.

28 PROPERTY ROUND-UP 32 CHAIRMAN’S CLOSING REMARKS 32 RESOURCING OUR BUSINESS GROWTH STRATEGY

My business is profitable, why should I be worried about cash?

18 CHANGING INFRASTRUCTURE Managing the impact of changing infrastructure on landowners and farmers.

Accreditations: This document is printed on Essential silk paper, which contains material sourced from responsibly managed forests and is Elementary Chlorine Free (ECF). We are helping The Woodland Trust and The Woodland Carbon scheme, which aims to improve the landscape of Britain by planting more trees and protecting our national heritage of precious ancient woodland.

Registered office address: 1 Bailey Court, Colburn Business Park, Richmond, North Yorkshire, DL9 4QL.

Trading as GSC Grays (England and Wales). Company registration number: 07715034.

All information within this magazine is correct at the time of going to print.

W E LCOM E Welcome to the seventh edition of the GSC Grays magazine.

In this issue we reflect on the implications for farmers and landowners of the Government’s Net Zero

article on page 14). This raises the question for those who have managed to obtain good people how to retain them, and how to conduct salary reviews in light of inflation, making a judgement call of where any increment might get pitched.

announcement, which redefined their environmental

The good news is that the gap between profit and level

ambitions resulting in key policy revisions including a

of support is narrowing across the farms and land we

commitment to speeding up infrastructure projects,

are working with. Businesses are finding ways to be

(see John Wallis' article on page 18), and revising

profitable and sustainable, rising to the challenge of

let property energy standards, (see Lucinda Riddell’s

farming without BPS. The new options under SFI '23

article on page 26).

present a real opportunity for some farming businesses

While the Government are rowing back it is unlikely that we will see the private sector follow, with many planned investment projects already set into motion.

Changing policy goal posts inevitably undermines trust in government decision making and stalls business investment for the long term.

This is also true for agricultural businesses, where those who had planned for SFI to open in August '23 were pushed back and initial guidelines were amended.

Farmers have enough on their minds dealing with difficult drilling conditions following hot on the heels of a difficult harvest. Furthermore, the high interest

(see page 10 for our model farm) and the markets for Biodiversity Net Gain and Nutrient Neutrality are beginning to gather pace. The land market continues to perform well, with the availability of land down by 10% and demand supported by environmental buyers (see John Coleman’s article on page 24).

Farming and land management are changing rapidly, with many challenges and opportunities to navigate.

All these factors require clarity of thought and careful business management whether you manage a farm or an estate. Don’t hesitate to get in touch if you need some guidance.

rates are now predicted to last for the next couple of years, despite a modest fall in inflation, meaning farmers will need to carefully address cashflow going forwards into 2024.

The challenges with accessing labour and the cost of labour continue to cause strain (see James Severn's

GUY COGGRAVE MANAGING DIRECTOR

01748 897606 gsc@gscgrays.co.uk

N O V E M B E R 2023

1

BI O D IVERS I TY N E T GA IN An unmissable opportunity or an unwanted burden?

Biodiversity Net Gain (BNG) becomes a compulsory

DEFRA are currently expecting units to trade for between £25,000 and £30,000 per unit, but others suggest prices could rise well beyond this if demand is

requirement for most

tight in the early days of the market.

developments from January 2024.

This uncertainty means it has been difficult to assess

Introduced by the Environment

whether the financial returns would be adequate to

Act 2021, BNG requires

given the level of risk, loss of flexibility and long-term

make BNG attractive for landowners, particularly

developers to deliver an uplift

liability that are likely to be involved.

in the biodiversity value of the

A proper assessment of costs and benefits over the

land by at least 10%, compared to pre-development levels.

lifetime of the project, which will be a minimum of 30 years, should be a key part of a landowner’s decisionmaking process.

‘offsetting’

It is also important to consider how a biodiversity

biodiversity loss and places a burden on developers

project might compare to alternative land uses. Early

to demonstrate that their projects are accounting for

adopters might be willing to speculate and engage

their environmental impact (albeit within a narrowly

with the market early, but many will wish to wait and

defined set of parameters).

see what prices and terms might be achieved before

It

is

a

step

further

than

simply

they commit.

Although developments must try to avoid harm and retain or create habitats on site where possible, some

DEFRA’s publication of the provisional prices for

developers will only be able to meet the required 10%

their Statutory Biodiversity Credits is welcome and

uplift in biodiversity by funding habitat creation or

has the potential to accelerate the private market by

restoration on other land holdings. This creates an

incentivising developers to devise plans to meet BNG

opportunity for landowners to be paid for delivering

requirements before the looming deadline.

projects that result in an uplift in biodiversity.

ASSESSING THE SIZE OF THE OPPORTUNITY FOR LANDOWNERS The market for biodiversity units is still very young, and it is difficult to predict the financial opportunity that BNG might present.

2

GSC GRAYS

LANDOWNER CONSIDERATIONS As demand for biodiversity units increases and a market price emerges, landowners may soon have a clearer picture of the potential value of biodiversity projects on their land. For those interested in the opportunity, there are some important factors to consider:

1. LONG TERM COMMITMENT BNG projects require a minimum 30-year commitment and in many cases will result in land being subject to

This

will

enable

developers

to

use

their

BNG

requirements and delivery as a marketing tool to showcase their green credentials to enhance sales to an increasingly environmentally aware customer base

ongoing protections even after the agreement has

and to fulfil their environmental and social conscience

ended. Consider how this might impact your land

to their board and shareholders.

management and enterprises now, and for future generations.

As developers start to prepare for the forthcoming deadline,

2. FINANCIAL IMPLICATIONS Habitat banks or developers might seem to be offering large sums for BNG projects, but remember it is important to take costs into account and break income down to a per hectare annual basis so that it can be properly compared with other land uses.

and

local

authorities

provide

greater

clarity on their regional objectives, we will see fresh opportunities for landowners in an increasingly volatile world where land can provide a sustainable solution.

GSC Grays has the expertise to provide professional services to navigate BNG for both landowners and developers.

The project might also impact on the capital value of the land and result in long term liability or increased tax burdens.

3. STRATEGY Rather than looking at emerging markets in isolation, try to integrate and understand nature markets within your wider strategy.

What is your vision for 2030? 2050? Will this opportunity help or hinder your progress towards your wider goals?

A NEW APPROACH FOR DEVELOPERS BNG provides a new approach to development which pushes the environment up the hierarchy of decisionmaking to ensure that land is left in a better state than before the development took place through the implementation of nature-based solutions.

HOLLY STORY DIRECTOR

07979 530434 has@gscgrays.co.uk

N O V E M B E R 2023

3

LO O K IN G FO R A NEW I NCO ME ST R E A M ?

GSC Grays offer a comprehensive BNG service; we can facilitate your project from early stage scoping through to securing a sale.

Our services are structured in four key stages: Stage 1: Feasibility Report and Net Gain Appraisal Conduct a desktop review to assess the suitability of your site for a BNG project.

Stage 2: Project Development Develop a detailed habitat management plan and project budget.

Stage 3: Marketing & Negotiation GSC Grays have experienced professionals who can secure the right price and terms for your project.

Stage 4: Implementation and monitoring Ongoing support and management services for the lifetime of your project, including oversight of establishment works, engaging contractors and reporting.

Example BNG Project Arable reversion to low input permanent pasture is one way of delivering a ‘net gain’ in biodiversity; on a 20 ha site this might generate around 60 biodiversity units. Assuming a price per unit of £20,000 (based on DEFRA modelling) the income generated could be significant, as estimated below: Gross income: £1,200,000 Establishment and professional costs: £150,000 Net income: £1,050,000 The above is an estimate of the total payment that might be received for a 30 year project, not an annual payment, and does not take into account factors such as tax liability, monitoring costs or potential impact on capital value. Market prices may differ from modelled values.

All our services are delivered by specialist consultants. To enquire about our BNG services, call 01524 880320.

4

GSC GRAYS

THE ROAD TO NE T ZE RO

N O V E M B E R 2023

5

The subjects of carbon auditing and Net Zero have been gaining increasing coverage in the national and farming press over the past

The banking sector is also starting to look at the carbon position of businesses when assessing lending requests. Banks too, will have to be Net Zero by 2050, and their lending portfolio will be a part of achieving this.

18 months. Whilst agriculture

The need for farmers to demonstrate what they are

is often in the spotlight, and

gaining pace.

with much of this rhetoric being largely negative, how is the

doing to reduce their carbon footprint is clear, and it’s

FARMER UPTAKE

industry responding and what

From what I see on the ground, much of the

benefits can the farmers that get

has yet to permeate far. Why? Farming is hard at the

conversation around the road to Net Zero for farmers

on board expect as a result?

best of times and anything that makes things harder

NET ZERO TARGETS

of a farmer’s priorities.

The Paris Agreement is an international treaty on climate change which set the legally binding target of achieving Net Zero emissions by 2050 on every industry in the 196 countries that made the commitment, including the UK. The farming industry has recognised the significant role it has to play in the UK’s ability to achieve this target. Indeed, the NFU have set an industry deadline

still has, understandably, tended to fall down the list

The farming industry holds a unique position in the Net Zero debate. Not only is agriculture responsible for a significant contribution to greenhouse gas emissions it is also part of the solution, thanks to its unique ability to offset emissions through carbon sequestration.

This provides the perfect opportunity for farm businesses to get on board, to turn the negative rhetoric to the positive, and truly begin to drive the

for agriculture to be Net Zero by 2040, some 10 years

narrative.

ahead of schedule.

GET ON BOARD WITH CARBON ACCOUNTING

RISING PRESSURE ON FARMERS As climate change rises up the list of government, industry and public priorities, so increases the pressure on farmers to take ownership of both their contribution to the carbon emission issue, and of their role in helping other industries to offset their carbon emissions.

Many farmers that have engaged in carbon auditing have done so at the behest of their supply chain who can see market benefits in being able to promote their produce as Net Zero, sooner rather than later. Indeed, some supermarkets have pledged that their produce will be Net Zero by 2030-35, well ahead of the 2050 deadline.

Net Zero targets have propelled the importance of carbon accounting which

GSC GRAYS

expected

to

become

requirement of farm assurance schemes going forward.

A key component of this is the carbon audit which provides an assessment of the emissions produced as a result of the farm’s operations alongside an assessment of the carbon sequestered by the woods, hedges, peatlands or soils on the holding.

Crucially, there are clear, achievable gains that a farm business can make immediately by understanding their carbon footprint, not least of which are the improved efficiency of production and increased enterprise profitability which result.

6

is

a major part of future agricultural policy and a

IDENTIFYING EFFICIENCY SAVINGS WITHIN A FARM ENTERPRISE

And is Net Zero enough? Net Zero simply means

Efficiency of production plays a significant role in

be good enough. Those businesses will need to target

carbon emissions.

A carbon footprint can detail the emissions per kg of output. For example, a footprint per kg of liveweight meat produced can be used to look at the value

the business is balanced in terms of emissions and offsets. For any business wanting to generate income from carbon in future, then Net Zero will simply not Net Negative i.e. have sufficient carbon to offset their own emissions and leave a balance that can be traded.

TAKE THE FIRST STEPS SOONER, RATHER THAN LATER!

gained for that kg of meat, and how efficiently it was produced.

Every day an animal is on the holding it affects the carbon footprint. If you feed two animals the same diet and achieve the same sale price, but one takes ten days longer to finish, then the carbon footprint per kg of deadweight for the second animal will be poorer. At the same time, the second animal being on the holding for ten days longer will have incurred additional costs - same sale price, but more costs and more carbon emissions.

AC HIE VING NE T ZE RO WI LL B E A LO NG -T E RM P ROJECT FO R E VE RYO NE , AND NET NEGAT IVE LO NGE R ST I LL, SO MO RE RE ASO N TO MAK E A START SO O NER RAT HE R T HAN LATER. The excuse that a lot of the science around sequestration

Analysing the carbon footprint in conjunction with the

is not yet where it needs to be, should not be used by

financial performance of each enterprise on the farm

farmers to put off taking the first steps into carbon

begins to provide the business with a tool - improving

auditing. Creating a baseline, understanding the areas

the carbon footprint can translate into improved

on the farm where improvements can be made, which

enterprise profitability.

will ultimately help make more money for the business, should be started now, and should pay dividends in

The same applies to every enterprise on the farm -

the long run.

producing more efficiently should reduce the overall emissions and improve farm profitability.

IS NET ZERO GOOD ENOUGH? Focussing on the above should help to reduce emissions but it will not get a business to Net Zero alone, not by a long way. Each business will need a long-term carbon mitigation plan, looking at every aspect of the business to achieve the Net Zero goal.

Carbon sequestration in hedgerows, woodland, peat, and soil may all play a role, but there are still question marks over how this is verifiably counted. The soil carbon sequestration element, heralded by many as a silver bullet, may not hold the promise for everyone that is hoped.

NEIL CARTER ASSOCIATE

0191 303 6373 nac@gscgrays.co.uk

N O V E M B E R 2023

7

SU STA INAB LE FAR MI NG I N C EN TIV E A farmer's guide to SFI.

WILL I BE ABLE TO REPLACE BPS WITH SFI PAYMENTS? SFI income will be highly variable between farms, dependant on the land types available and the combination of higher and lower value SFI actions applied to the farm. Furthermore, the extent to which the SFI actions are already being completed on the farm will dictate the cost of implementing the action and therefore the net benefit to the business.

Arguably, the land type with the greatest opportunity to improve upon historic BPS payments, of £220/ha, lies in lowland grassland with the ability to establish large areas of herbal leys paid at £382/ha. Upland grass farms could find that a large proportion of their grassland is limited to low input grassland which will be paid at £151/ha or the moorland payment of £10.30/ha.

Arable land is the land type that will have the most variable SFI income as it will include a greater number of lower value actions which might not be applied to the whole rotation such as no insecticide use at £45/ ha and companion cropping paid at £55/ha.

8

GSC GRAYS

SHOULD I APPLY FOR SFI OVER MID-TIER COUNTRYSIDE STEWARDSHIP (CS)?

For the majority of farms, SFI will be the more appropriate scheme, however, this will be dependent on the farm’s priorities within the agreement. SFI agreement

holders

will

benefit

from

a

shorter

agreement length lasting 3 years rather than 5 years; quarterly payments rather than annual payments; the ability to add more land/actions into the agreement annually; equal payment rates to equivalent midtier CS options and less prescriptive rules on the implementation of actions.

One key difference is that SFI agreements do not offer capital payments for options such as hedge planting or fencing. Therefore, if capital options are required, a CS capital only agreement can be established alongside the SFI agreement. Whilst it is the case that most basic capital options are available within CS capital only agreements, there are capital options which are only available to mid-tier CS agreement holders. Therefore, for farms where capital options are the priority, a midtier CS agreement could be more appropriate.

IT S H OU L D BE N OT E D THAT S F I AN D M I D -T I E R CS AG R E E M E N TS C AN BE A P PL IED O N T H E SA M E PA RCEL A S LO N G AS T H E OPTI ONS /AC T I O N S A RE N OT B EING D O U BL E F U N D E D.

The action is rotational and therefore is not specific to the field and a given area could be included within the rotation annually.

FREE SFI ADVICE The key to SFI is determining what to put into the SFI options for each individual farm, rather than the application process itself. You can find out which SFI standards will benefit your farm, for free, through our

For example, there are no organic options in SFI at present, therefore a farm could apply the SFI herbal ley action, layered with the mid-tier CS option for organic land management on improved grassland.

Farm Business Advice Service (FBAS). During a half day, on farm review our consultants will: •

Make sure you understand the SFI options available to you.

WHAT ARE THE EASY WINS IN SFI?

•

Work with you to understand what fits best with your farming system.

All businesses will have access to £20/ha (capped at £1,000) to cover administrative costs. Furthermore, farms that are enrolled in a farm assurance scheme should be able to complete actions such as creating a nutrient management plan (£589/annum) and an

•

Build a proposal with the SFI options for your farm.

Call 03333 059 059 or email fbas@gscgrays.co.uk to book.

integrated pest management plan (£989/annum), as similar documents would already be completed for farm assurance records.

For grassland farms there are likely to be a number of options where the management prescriptions are already being fulfilled. Incorporation of legumes on improved grassland pays £102/ha. This action has no restrictions on fertiliser and herbicide use, stocking densities or cutting dates.

For upland grass farms the low input grassland option may well be applicable to most improved grassland with minimal to no change to current management, given a large proportion of grass receives little or no fertiliser. Furthermore, under SFI this option does allow livestock to receive supplementary feed, whilst the same option under a mid-tier CS agreement, does not allow any supplementary feeding.

Most

arable

farmers

should

also

consider

the

no insecticide use option paid at £45/ha. In our experience, most cereal crops receive minimal or no insecticides. Therefore this action could be easily applied to the cereal area within most rotations.

ROBERT SULLIVAN DIRECTOR

0191 303 9541 rjs@gscgrays.co.uk

N O V E M B E R 2023

9

M O DEL FA R M Lowland beef and sheep.

Interest rate rises compounded by further reductions in BPS have made 2023/2024 a challenging year for Vale Farm.

In this review we look at how incorporating an SFI scheme and adopting a rotational grazing system can help the farm to reduce cost of production and ensure a more robust financial business going forward.

Exiting Mid-Tier Countryside Stewardship Scheme Code

Options

Area

£/Ha

£

BE3

Management of hedgerows

500 (m)

£10/ 100m

500

AB8

Flower-rich margins & plots

2

673

1,346

GS2

Permanent grassland with very low inputs (outside SDAs)

11

151

1,661

GS4

Legume and herbrich swards

28

382

10,696

Total

14,203

They are finding that the legume and herb rich sward option is working but would not be comfortable having to manage a greater amount of that option in

Whilst Vale Farm experienced a profitable year in the

their grazing platform. The FBAS review concluded

2022/23 accounting period, the business is feeling

that £14,701 could be generated from an SFI scheme

the pressure this year. The interest payments on the

with some slight refinement to the management of the

loan and overdraft are forecast to be an additional

farm (see table overleaf).

£9,000, and while the 50% BPS payment was received in August, the impact of the payment reductions is becoming very noticeable - over £12,077 less than the 2020 payment. The combination of both will be £21,000 off the bottom line when compared with accounts from 2 years ago.

SFI Following an FBAS review by GSC Grays, an SFI scheme was assessed. The farm has an existing MidTier Countryside Stewardship Scheme (CSS) that includes a large proportion of legume and herb rich sward (see details in the following table).

Initially the family thought that SFI would not be suitable until the current CSS expired at the end of 2024. However, they are able to enter an SFI scheme to run alongside the existing Mid Tier scheme, then increase the options included within the agreement when the Mid Tier scheme ends.

Under our SFI proposal, the majority of the payment will come from NUM2, legumes on improved grassland.

The farm already incorporates red and white clover in new grass leys and will look to overseed clover on the areas of the farm where clover isn’t established when harrowing in spring. No insecticide has been used on the Winter Barley grown for a number of years, allowing for IPM4 option to be easily achieved.

10

GSC GRAYS

In addition their farm business consultant/agronomist

The main benefits of the rotational grazing for Vale

will assist formulating soil, pest and nutrient plans

Farm should be;

costing much less than the revenue generated from the SAM1, IPM1 and NUM1 options.

New SFI Scheme Code

Options

Area

£/Ha

£

SAM1

Assess soil, test soil organic matter and produce a plan

160

5.8

1,023

IPM4

No use of insecticide on arable crops

20

45

900

NUM2

Legumes on improved grassland

100

102

10,200

IPM1

Assess integrated pest management and produce a plan

989

Assess nutrient management and produce a review report

589

NUM1

SFI Management Payment

•

Increased grass allowing the farm to carry more stock – or have surplus silage to sell.

•

Longer grazing season allowing the cattle to be outside longer into the winter months.

•

Improved quality of forage which should reduce the amount of concentrates fed.

A trial was conducted with a group of ewes and lambs over summer in a 10Ha field divided into 2Ha paddocks with electric fencing, the lambs weaned were heavier than those in fields managed under set stocking in neighbouring fields. The system is now to be implemented over the whole farm for next summer, although the farm lacks water troughs in certain fields when these are divided using electric fencing.

As a result, a capital only stewardship grant has been applied for to fence the edges of fields bordering the

20

50

1,000

neighbouring beck that livestock currently use to drink

Total

14,701

with troughs in central locations to suit a rotational

from. The aim is to fund the pipework to each field grazing system.

Although the SFI scheme will provide a considerable income, this is by no means a replacement for BPS. The 2024 payment is calculated to fall a further £5,091 to just £16,774. Vale Farm is becoming increasingly aware of its exposure to market trends and volatility.

Several other options are being considered to generate additional revenue to sustain the family in future years. Areas considered are; •

Rearing dairy x beef calves on a contract agreement.

•

Changing the sheep/cattle breeds and systems to be more extensive to allow for another use for the livestock buildings such as B&B Pigs or Caravan Storage.

•

Converting the traditional buildings into holiday cottages/long term lets.

FARM FACTS 20Ha Winter Barley – Sold 80t @ harvest, home fed the remaining 67t.

120 suckler cows, Continental Cross (Limousin x Belgian Blue).

55 steers finished under 24months, 20 heifers retained, 35 sold as stores.

450 breeding ewes – 600 sold finished, 53 retained and smallest 50 sold as stores to finish.

BPS – 2020 - £33,942

2023 - £21,865.

All the options need careful consideration with regards to planning, cashflow and capital requirement, labour involvement and taxation. Specialists within GSC Grays will be helping in all these areas going forward.

To future proof the business and reduce reliance on purchased feed, a rotational grazing system is being developed.

SIMON WALTON FARM BUSINESS CONSULTANT

07904 788160 siw@gscgrays.co.uk

N O V E M B E R 2023

11

M U CK A ND MYS TE RY Is your business compliant?

The traditional view of farmyard manure, slurry and other organic fertilisers used in agricultural crop production as 'waste' materials is changing

funding particularly difficult, and in the case of the most recent pig sector issues, has been enough to bring forward retirement plans or simply force farmers out of the sector/industry.

IS THIS REALLY A CHOICE?

as farm businesses recognise

While

the benefit of harnessing

prohibitive, and the rules and regulations may be

these resources, particularly

confusing, do farm businesses really have a choice?

With the release of the Farming Rules for Water

given the price fluctuations of inorganic fertilisers.

However, the pace of this change has been slow due to the existing confusion around using and storing

infrastructure

investment

might

seem

(FRfW) in 2018 many of the rules became law, so they are here to stay. Furthermore, the chance of being inspected is more likely than ever before as the Environment Agency (EA) has recruited new team members specifically focussed on agriculture.

organic materials compliantly, and the investment that

Whilst this may sound alarm bells amongst many of

is required to do so. With rules and regulations here

our clients, the EA are keen to stress that inspection

to stay, farm businesses are advised to start planning

visits are intended to help farmers understand the

for compliance, sooner rather than later.

rules and show businesses the route to compliance.

SECTORS MOST AFFECTED

WHAT CAN YOU EXPECT FROM AN INSPECTION?

From discussions we have had on farm, manure/slurry storage seems to be the biggest headache for most

Iain McDonell, SEO Agriculture (Yorkshire) with the

farm businesses, particularly with the 2019 Clean Air

EA, explains;

Strategy aiming to have all slurry and digestate storage facilities covered by 2027.

"Information relating to rules and regulations around nutrient management, slurry/manure storage and

Two of the sectors that are most likely to be affected

spreading and soil management, have been freely

by increased regulation and requirement for capital

available online for a number of years. Our main aim

investment in storage infrastructure are the dairy and

at these inspections is to check farmers are compliant

pig sectors, both of which are subject to notorious

and understand why these rules exist. Compliance

market fluctuations.

12

This can make justifying large expenditure and securing

GSC GRAYS

should benefit not just the environment but also

to ensure that any contractors you use are aware of

their business with improved efficient use of organic

the CIRIA construction standards they must achieve."

materials. Our immediate aim is to provide advice and guidance initially, followed by warning letters if necessary. Ultimately, if businesses fail to engage and come back into compliance with these initial approaches, we have the power to impose civil or criminal sanctions."

Sanctions will be unlikely for most farms but are reserved for those unwilling to engage and make changes. So how can farm business approach this issue and make the necessary changes?

COMPLIANCE APPROACH AND SUPPORT Having a sound plan in place is crucial, as is looking at the planning permission and investment on a whole

For the time being, advice and funding is also available for eligible cases through Catchment Sensitive Farming and Countryside Stewardship, and two further rounds of the Slurry Infrastructure Grant are expected in Autumn 2023 and 2024 – please make use of this support while it is still available.

ACT NOW In my opinion, how we store and spread organic materials is going to be in the spotlight for years to come and we urge our clients to begin planning as soon as possible. Investment in infrastructure does not happen overnight. Businesses that can demonstrate they have a plan and are working towards it will be seen more favourably than businesses who can’t.

farm level, taking into account the type of system, health and safety implications, and its practicality of use. Involving the EA from an early stage can be a good place to start.

Iain McDonell provides direction on how to approach compliance.

"The key is knowing the regulations, which in turn is just good business management. Know which rules apply to your business specifically, and how compliant you are with those regulations. What is needed to make you compliant? How much will it cost to achieve compliance, and can the business sustain that investment? If new infrastructure is needed, don’t forget that as well as the above, you will need

SAM DALE ASSOCIATE

01423 740120 sjd@gscgrays.co.uk

N O V E M B E R 2023

13

L ABO UR SH ORTAGE S What can be done to address the shortage of skilled agricultural workers?

Hiring and keeping high quality, dependable and happy staff is crucial to the success of any farm business. Yet our clients

of skill and competence from the staff operating them.

With skilled workers in even shorter supply, farm businesses are increasingly required to train their workforce in the skills required. Many of these skills are

are increasingly telling us that

transferrable to other industry sectors. Consequently,

this is one of the most difficult

to attract and retain these skilled people and can

challenges they currently face and has been a frequent talking point in the Farm Business Advice Service reviews our

we can find that our industry is in direct competition struggle to compete with the higher rewards on offer elsewhere.

I think it is also fair to say that farming will always be hard work and requires long and anti-social hours from time to time; for example, milking cows, managing

team have been conducting.

intensive livestock, or harvesting crops in the face of

WHY IS THIS?

farm add further pressure on staff and compound this

The main issue is the critical shortage of both

industry can be extremely dangerous. Many farming

domestic and overseas labour that continues to affect

families and their staff accept all the above and take

the industry - a hangover of both Brexit and the Covid

it in their stride. Others struggle with it, particularly

pandemic. This shortage of labour for the agricultural

if their reward and working conditions are less than

sector is further compounded by the need for an

adequate.

increasingly skilled workforce.

14

operate than it used to be, demanding a higher level

difficult weather conditions. The labour shortages on issue. We should also remember that some tasks in our

All issues combined make the job of attracting people

Much of the plant and machinery used on farms today

into the sector, and to the individual farm, increasingly

has become so much more technical and complex to

difficult.

GSC GRAYS

WHAT CAN BE DONE ABOUT IT?

•

Share staff resources. It has always been very difficult if not impossible to get the balance of

While there is little that a farm business can do to

labour required for an enterprise or business

address the overall labour shortages, all is not lost.

exactly right. Some farmers are now finding that

Attention should instead be turned to making the farm

sharing a member of staff, just as they might a

business attractive to workers that wish to join the

machine, can even out some of the lumps and

industry (or those out there looking for a better place

bumps. It’s never perfect, but with goodwill and

to work) and retaining the staff you already have.

common sense, it can help.

As farmers and managers we must be our own ‘HR

Some now swear by

it.

department’ as well as getting on with the day job.

As with so many things in life, there is no perfect

Many farm businesses already manage their teams very

answer.

professionally, just like other businesses and industry sectors who have the benefit of HR departments.

For those who could do with a bit of extra help, here are some key areas to think about and ways which could help you set your business apart.

•

A thorough and comprehensive Health and Safety policy is crucial.

•

High quality and effective training, particularly in safe machinery operation is also vital.

•

Good communication and looking after the mental

I HO P E T HIS P ROVIDES HE LP FUL ADVIC E IN T RY ING TO E ASE , IF NOT SO LV E CO MP LE T E LY, WHAT IS A N INC RE ASINGLY C HALLE NGI NG B UT VITALLY IMP O RTA NT TO P IC IN T HE MANAG ING OF T HE FARMS AND B USINE SS ES AC RO SS T HE REG ION.

well-being of staff is increasingly important.

•

Farming and working on farms can be a lonely affair. Talk to your colleagues every day so that you can spot signs of worry or stress before they become a more serious issue.

•

Reward your team as well as your business or enterprise can afford, and budget appropriately for this.

•

Consider

the

working

conditions

of

your

colleagues. Are there any improvements you could make such as creating a comfortable space for breaks and lunchtimes?

•

Time off! We know there will be times that you will need colleagues to work long hours, sometimes in difficult conditions. Discuss these with them in advance and make sure you plan for them to take time off, either before or after crucial, busy periods, or both.

JAMES SEVERN DIRECTOR

07836 707094 jrs@gscgrays.co.uk

N O V E M B E R 2023

15

M A NAGIN G C AS H P ROACTIV E LY My business is profitable, why shoud I be worried about cash?

With the Bank of England Base Rate (BEBR) currently rising

bank that facilitates the day-to-day operation of the business. Understanding the working capital

monthly, proactively managing

requirements of your business, as well as when that

your cash position has never

cash position for the greatest financial gain.

been more important.

cash is required, is critical to proactively managing its

While the effects of rising interest rates are being felt

But what do we mean by managing your cash

by all industries, agriculture is particularly susceptible.

proactively, and why manage it at all, especially if your

For those managing an overdraft, the issues are

business is profitable? The simple answer is to protect

significant, with low-cost working overdraft facilities

your business and ultimately save money. Whilst a

becoming a thing of the past.

business might be profitable, it does not mean that it is necessarily cash positive.

Unsecured rates on short-term borrowing sit in the region of 5% above the BEBR having risen from an

PROFIT V CASH

innocuous 5.25% APR in Dec 2021 to a whopping

Profit is the difference between the income and

considerably based on the size of the facility, agreed

outgoings for a business over a given time frame,

term and the size of the security, so some businesses

usually twelve months, and includes non-cash items

do have rates below this level). This equates to an

such as the profit made on disposal of business assets

annual charge of £100 per £1,000, or £0.27 per day

and depreciation, and usually omits any drawings that

for every £1,000 sitting in the overdraft.

the business principals might take.

16

Cash, however, is quite simply the money in the

GSC GRAYS

10% APR, based on the current base rate. (Rates vary

Understanding the working capital requirements of

In the context of farming businesses this is a frequent

your business will support decisions that could reduce

and recurring reality.

your total outstanding borrowing and save you money over time, for example by transferring ‘hardcore’ overdraft borrowing on to a fixed repayment product.

Or alternatively, taking ‘non-working’ credit balances out of the current account to put it somewhere where it might start earning some noticeable interest!

Managing and understanding your cash needs and how that relates to operational activity should prove a catalyst to critically appraise what you do and how you do it and can identify when more drastic measures - such as a business restructure, resizing or even exit might be required.

While this can be easier said than done - not everyone has the capacity and security to support a fixed term loan - managing cash proactively is more likely to achieve this and provide lenders with the confidence to help support your business needs.

UNDERSTANDING CASH NEEDS The first step to understanding your cash needs is to create a budget, and as part of that budget, a cash flow.

ULT IMAT E LY A RE SILIENT B USINE SS IS O NE T HAT CA N P RE D IC T AND MANAG E I TS C ASH NE E D S AND WORK C LO SE LY WIT H ITS FINANCE P ROVID E RS TO D E LIVE R A ND FAC ILITAT E T HAT NE ED.

The volatilities in the current agricultural markets

It is also a business that recognises the need for

are making forward planning much more difficult. In

change and has the capacity and desire to instigate

addition, agriculture rarely operates a flat cash profile,

the changes required.

with seasonal variation – caused by weather, religious festivals, public holidays and world events – impacting agricultural income in most sectors. Nevertheless, it is important to have a plan.

None of us have a crystal ball, so projections using historic records as a baseline are key to understanding the pattern of cash needs for your business. Don’t be tempted to ‘make the shoe fit’, always use realistic production levels and quantities regarding input costs to formulate your estimate. While the numbers might not be as accurate as you would like, the cash profile will be representative of your needs.

Producing a cash flow should not be an annual exercise with the product of your efforts being consigned to the past tense as soon as it is complete. Rather, it should be an ongoing exercise, with constant monitoring and amendments throughout the working year.

OPERATIONAL RESILIENCE Einstein’s parable of quantum insanity states, "Insanity is doing the same thing over and over again and expecting a different result".

JAMES BUSH ASSOCIATE

01524 880327 jtb@gscgrays.co.uk

N O V E M B E R 2023

17

CH ANGING I N FR ASTRUC TU R E Managing the impact of changing infrastructure on landowners and farmers.

Over the next seven years the UK faces a significant increase in infrastructure development, surpassing the combined efforts of the past three decades.

This push is driven by the UK's commitment to achieve Net Zero emissions by 2050.

To meet this target, the country must construct new and upgraded infrastructure on an unprecedented scale to support new housing, commercial spaces, and renewable energy systems such as solar panels, batteries, and electric vehicle charging stations.

ROLE OF NICK WINSER AND THE ESC REPORT Central to this transformation is Nick Winser, the UK's Electricity Networks Commissioner. Appointed as an independent advisor in July 2022, Winser holds sway over the country's electricity transmission infrastructure.

Supported

insights

from

the

Energy Systems Catapult (ESC) report, Winser's recommendations aim to streamline the traditionally lengthy project delivery timeline, reducing it from fourteen years to seven.

This has been supported by the Government’s recent Net Zero announcement where they have committed to “fast track” through the nationally significant infrastructure project planning regime, available for major eligible transmission projects, to ensure they

IMPACT ON THE NORTH OF ENGLAND

are prioritised, helping businesses and households

The North East is representative of the broader

farmers to adapt to an evolving landscape.

infrastructure changes occurring across the UK. Ongoing projects like the dualling of the A66 and the Northumbrian Water pipeline projects across County Durham and the Tees Valley underscore the wider impacts of these projects on the local area. The scale of the new infrastructure project programme means a network of cables and pipelines is projected to traverse farmland and rural areas, inevitably affecting landowners and farmers.

connect to the grid sooner. While this acceleration offers efficiency gains, it will require landowners and

ELECTRICITY TRANSMISSION INFRASTRUCTURE EVOLUTION In a recent correspondence to the Secretary of State, Nick Winser outlined plans with real implications for landowners and farmers, involving integrating the electricity generated by offshore wind projects and solar farms requiring substantial upgrades to the existing infrastructure or creating a new national transmission network.

18

by

GSC GRAYS

This could involve installing miles of pylons and overhead cables, impacting land management and

TOWARDS A BALANCED FUTURE

agricultural activities. Whilst this could result in

As the UK progresses into a more sustainable future,

significant disruption to farming businesses, it could

the future of many farmers and landowners is tied to

also present an opportunity, particularly where new

the trajectory of the associated development. While

infrastructure provides increased grid capacity and new

the pursuit of Net Zero is commendable, it must not

connection points. Renewable energy developments

come at the expense of those who steward the land.

may become an option for landowners who previously Striking a balance between progress and the interests

had no viable grid connections.

THE NEED FOR COMPREHENSIVE CONSULTATION Recognising Farmers'

the

Union

potential is

impact,

advocating

the

National

for

thorough

consultation, emphasising the importance of engaging with farmers whose lands may be directly impacted.

They are pushing to determine whether farmers will

of these stakeholders will be the ultimate test to the sustainability and success of the forthcoming infrastructure evolution.

Have you been notified of an infrastructure project that will cross your land? Utilities companies must pay for landowners to obtain advice. Our experienced team can help to negotiate on your behalf to ensure that you are not adversely affected and are fairly compensated.

be fairly compensated and, as the recent Winser Report suggests, receive lump sum payments similar to individual households for hosting new infrastructure on their land.

E NS U R I NG FAI R T RE AT M E NT FOR FA R M E RS A N D ACK NOWL E D G I N G T H E I R CONTR I B U T I O N S I S A KEY CO N C E RN FO R T H E INDU S T RY.

JOHN WALLIS REGIONAL DIRECTOR

07557 922944 jkw@gscgrays.co.uk

N O V E M B E R 2023

19

G ROUSE S HOOT L I CENSIN G The implications of its possible introduction in England.

With the strong possibility of a Labour government coming to

Should this happen, I expect English moors will struggle more with this transition than their Scottish counterparts. Grouse moor owners in Scotland are

power in the not-too-distant

already somewhat prepared for the introduction of

future, and whilst there will

a result of existing legislation relating to coding traps

no doubt be more pressing matters to attend to, there is a good chance that England will follow suit with Scotland’s plans to license grouse shooting.

the rules and regulations that licensing will bring as and snares, for example. This already requires more stringent working practices and detailed recordkeeping to remain compliant.

The devil will be in the detail, but delivering the obligations of such a licence is likely to be costly - be it the need to employ additional staff to meet the burden of increased compliance, investment in equipment or the associated impact on time and management costs.

20

GSC GRAYS

UNCERTAINTY FOR MOORLAND ESTATES Whilst this concept is entirely speculative at this stage, one would also expect that any such licence would sit with the estate owners and/or shoot tenant.

In time, licensing may even open up the opportunity for control of some species which appear to be rapidly increasing in numbers and can impact on shoots e.g., ravens and buzzards.

BE PREPARED

Whether licences will be transferable is yet unknown,

Despite the uncertainty which exists, there are things

and the resulting uncertainty for purchasers or new

you can do to prepare, it is important to plan ahead.

tenants will clearly have implications for grouse moor

Focus on improving best practice (burning, trapping,

owners wishing to sell up.

gritting etc), ensure keeper training is up to date,

If England follow suit with the Scottish proposal to introduce annual licences, the short timescales will bring further uncertainty to moorland estates and the local economies which rely on the grouse moor market.

This will undoubtedly have a detrimental impact on investment in the sector, potentially affecting capital values as a result, and may also deter younger keepers from joining the sector. Perhaps unsurprisingly there is already strong opposition in Scotland. Close to 400 rural businesses have recently written to the Scottish Government asking them to rethink their ‘disastrous’ plans.

To compound matters, DEFRA’s track-record on licensing systems is also diabolical. Changes are

begin to undertake or improve existing record keeping (burning, bird surveys etc), consider natural capital and biodiversity baseline audits and consider existing accreditations such as the British Game Alliance and Wildlife Farms & Estates.

BY D O ING SO, YO U WI LL P LAC E YO URSE LF IN THE B E ST P O SSIB LE P O SIT ION TO WE AT HE R T HE STORM T HAT T HE INT RO D UC T ION O F LIC E NSING WO ULD INE VITAB LY B RIN G.

often introduced quickly, at the last minute, with no apparent regard for the practical consequences. Will DEFRA respond promptly? Will a licence be linked to wider conditions, e.g., any potential burning breaches?

How easy will it be for a licence to be withdrawn, for what offence, and what evidence will be relied upon?

What will the penalties be? Will shoots be innocent until proven guilty? With the inevitable DEFRA chaos and delays, what do we do in the meantime?

NOT ALL BAD NEWS It is important to remember amidst all this uncertainty, that should it be introduced, licensing will still allow shoots to operate, and I expect licensing will give the sector more credibility. There will always be opposition to grouse shooting and that will not change. However, by complying with any such regulation, the sector will be able to more clearly, consistently, and legitimately demonstrate best practice and compliance with the law. Failure to do so will have significant consequences.

PHIL SCOTT-PRIESTLEY DIRECTOR

01748 897616 psp@gscgrays.co.uk

N O V E M B E R 2023

21

W HAT N OW FOR THE SM AL LER L E T FAR M? The received wisdom has long been that a small farm

80% of the applications for a 30-acre equipped farm we marketed recently were from those who wanted to continue working off the farm as well as pursuing

coming in hand might most

agriculture on the holding.

profitably be broken up rather

Talking to those applicants we found that some see

than re-let as a whole.

such farms as an opportunity to get a foot on the

Such a policy has stood many an estate in good stead,

pursue a farming interest alongside a permanent

bolstering income through the separate letting of

career in sectors allied to, or outside of, agriculture.

the farmhouse and supporting other farms with the

Others still seek a smallholding with buildings for

addition of land. But with times changing, is that

diversified enterprises and land for personal use. For

always the most suitable approach now?

those lacking capital to pay the premium for a lifestyle

FARM LETTINGS ACTIVITY Even a cursory review of adverts in the farming press

ladder for the future. Others see them as a way to

holding, a farm tenancy may be the ideal solution; a way to demonstrate a track record and accumulate funds towards the next step.

this year would suggest that opportunities for new

Whilst the attraction of such farms to a variety of

entrants may be improving.

GSC Grays has been

prospective tenants is obvious, what are the attractions

involved in lettings right across the spectrum of bare

for the landlord, whether for a small natural unit, or

land to fully equipped holdings, and ranging from 30

for clever lotting of a larger holding?

acres to 600 acres, seeing something in the region of a 200% increase in farm lettings in 2023 compared to 2022. Demand from applicants shows no sign of slowing despite increased supply. Our agents have

OPPORTUNITIES FOR LANDLORDS

reviewed hundreds of good quality tenders and had

Firstly, when the Renters Reform Bill (or similar

the difficult task of selecting only a small number of

alternative legislation) is eventually introduced, it

successful applicants from a strong pool of suitable

will be much harder to deal with a scenario where a

candidates.

residential tenant and an agricultural operation are in conflict as there will no longer be a no-fault route out,

THE SMALL FARM FACTOR Analysis of recent tenders received has shown an unexpected depth of demand and strength of rental bids for farms with a house, a modest range of buildings and relatively small acreage of land.

22

GSC GRAYS

suggesting great care will be needed if steadings are to have multiple uses.

Similarly, a short term residential letting to ‘park’ the dwelling ready for a future event will become harder (though not impossible).

Secondly, experience this year has shown that tenants

The choice of term presents another risk; the longer

looking for small holdings are willing to tender rents

the term the greater chance of the tenant committing

which match, if not exceed, the amount achievable by

to investment in the holding, but the harder it is to

splitting the holding. This is clearly attractive, even

reverse the situation and pursue an alternative path.

without considering the opportunities for re-balancing

Break clauses may go some way to mitigate this.

repair liabilities that a Farm Business Tenancy offers.

Thirdly, and by no means lastly in the list of persuasive reasons, it may be unwise to assume that the most sustainable future for an estate is to have fewer, but larger, let farms. Considerations such as developing the next generation and creating the critical mass of

long-term

residents

to

community will all apply.

boost

a

sustainable

Whilst it is unarguably

harder to prioritise such aims if the difference in income generation is stark, the narrowing gap in rents receivable undoubtedly helps add weight to the

AS E VE R, T HE D E VIL IS I N T HE D E TAIL AND WHAT I S RIG HT FO R O NE IS N OT RIGHT FO R ANOT HE R, BU T P RE SE RVING SMALL ER UNITS IS C E RTAIN LY NOT AN O P T IO N TO BE AUTO MAT IC ALLY D ISMISS ED.

arguments in favour.

AND THE RISKS? The main risk to the landlord is the availability of Agricultural Property Relief (APR) from Inheritance Tax. If this is desirable, care will be needed to choose a tenant whose use of the land and buildings would meet the agriculture criteria.

If the availability of relief (whether as APR or otherwise) is extended to land managed for conservation purposes, the exact activities undertaken may become less important for relief on the land. The farmhouse would receive no APR anyway if let away, so the chance of even partial relief on the farmhouse is a plus compared to the alternative.

FRAN BARRIGAN DIRECTOR

01748 829200 fcsb@gscgrays.co.uk

N O V E M B E R 2023

23

T H E ' INCRE AS E I N SUPPLY ' OF FA RM LAN D Is it the start of a change?

24

GSC GRAYS

At first glance, you could be forgiven for thinking there has

How long these conditions can continue is open to debate, as the Government are threatening changes to the rules on Nutrient Neutrality to assist housebuilders

been a significant increase in

and have already delayed the deadline for BNG

the supply of farmland, but

and private investor face change as their competitive

analysis of the market across England suggests otherwise.

requirements to January 2024. The lifestyle buyer advantage over farmers comes from capital tax reliefs through Agricultural and Business Property Relief which a new government may affect.

FARMLAND MARKET IN THE NORTH

LAND VALUES

Various reports say anywhere from 33,000 to 62,000

in general, but there are still plenty of examples of

acres of openly marketed land was on offer by the end of June 2023 - a little down on 2022, and at least 10%

Interest rate increases have slowed the rate of growth premium prices being offered.

below the 10 year average. For land parcels and farms

Prime arable land has traded in the north between

greater than 50 acres, the amount of land offered for

£10,000 and £13,000 per acre, whilst grassland prices

sale in the north is around 5% up on last year, and

have settled at between £8,000 and £9,000 per acre.

similar to the 10-year average.

Marginal land and upland grazing have benefitted

There are regional variations. Northumberland is offering more farms for sale than it has done for the last 12 years. North Yorkshire and County Durham have remained relatively quiet, down over 6% this year, while Cumbria is even quieter. The market overall shows demand continues to outstrip supply with the proportion selling for economic reasons increasing considerably.

again by competition from the forestry sector with land capable of supporting commercial plantations trading between £4,500 and £6,000 per acre.

MARKET OUTLOOK Change is constant, but the influences on the overall market appear to be cancelling each other out resulting in the current stable marketplace. Expectations are that there will be more land available in the second

THE BUYER MARKET

half of the year and going forward into 2024. Buyers

This is reflected in the buyer market and in any one

possibility of a change of government in 2024 may

year we would expect the number of active farmer

cause them to offer less or postpone any decisions.

are likely to face increased funding costs and the

buyers to be at or just over 50% but in 2023 this is falling closer to 40%. The lack of farmer buyers has been compensated by private investors, lifestyle buyers, institutional investors, and a new breed of environmental buyers.

The last two groups prefer larger farms or land holdings as their need for ‘green credentials’ is hard to fill in smaller lumps. ESG investment funds have been hugely influential recently and capital funding for environmental groups has made them very competitive with the need for Biodiversity Net Gain (BNG) and in Nutrient Neutrality where the better the land taken out of agricultural production the greater the reward and benefit to the environment.

JOHN COLEMAN DIRECTOR

07779 973825 jarc@gscgrays.co.uk

N O V E M B E R 2023

25

RE NTAL INVE S TME NT Navigating complex changes in the landlord landscape.

The world of rental property investment is going through a series of important changes that landlords need to be aware of.

In this article, we will cover the key developments that

LANDLORD RIGHTS THROUGH RENTERS REFORM The Renters (Reform) Bill, which had its second reading in the House of Commons on 23rd October, aims to provide better protection for tenants while also considering the rights of landlords.

could affect landlords, consider the wider implications

One of the most significant changes included getting

and offer advice on how to deal with these changes

rid of "no fault" eviction notices (S21) which has now

effectively.

been delayed indefinitely until lengthy reforms to

IMPACT OF INTEREST RATE INCREASES AND MORTGAGE RATES ON RENTAL MARKETS The rise in interest rates and mortgage rates for buy-to-let properties is already creating change in the rental market. Many landlords are thinking about reducing the number of properties they own. At the same time, the demand for rentals is increasing, leading to higher rents. This situation presents both challenges and opportunities that need to be carefully considered, especially given the changes in the legislative, political, and tax landscape.

26

BALANCING TENANT PROTECTION AND

GSC GRAYS

the judicial system are completed. Other measures including the introduction of rules on how rents can be reviewed and preventing landlords from turning down tenants for reasons such as having children, pets or receiving benefits are unaffected. Tenants would also have more power to hold landlords accountable through a complaints system and an Ombudsman.

Many landlords will be breathing a sigh of relief at the delay, and the Bill, which is proving contentious, still has a long way to go before it becomes law.

CHANGES IN CAPITAL GAINS TAX There have been some significant changes in how Capital Gains Tax (CGT) works. The amount of money you can make from selling an asset before you need to pay CGT has been reduced from £12,300 to £6,000 for the 2023-24 tax year. It is expected to be further reduced to £3,000 for the next tax year. This means

NAVIGATING THE CHANGES: STRATEGIC REVIEW AND EXPERT ADVICE Given these complex changes, we recommend that landlords carefully review and possibly adjust their property portfolios.

that selling a rental property might not be as profitable as before. There are also discussions about increasing the CGT tax rate for higher-rate taxpayers.

UNCERTAINTY OVER STRICTER ENERGY EFFICIENCY REQUIREMENTS The Government has recently scrapped plans to enforce stricter regulations on landlords that would require new rental properties to achieve an EPC rating

T HIS P RO C E SS REQ UIR ES C ARE FUL P LANNING, E SP EC IALLY WHE N SIM PLY SE LLING YO UR P RO P E RTI ES MAY NO LO NG E R B E A S ST RAIGHT FO RWA RD O R P RO FITABLE.

of band C by 2025, and all properties to meet this standard by 2028. While this may be of relief to some landlords, how long this respite will last remains to be seen.

As such it would still be advisable for landlords to prepare for future legislative changes relating to

Seeking professional advice is crucial to making wellinformed decisions that match your investment goals.

If you need personalised insights to navigate through these changes or want to discuss specific aspects of your property investments, our team is here to help.

improving energy efficiency. This will be especially prudent as the limit for such improvements was expected to increase from £3,500 to £10,000 and may be an additional financial burden since landlords can no longer pass on some costs to tenants due to the Tenant Fees Act. TRANSITION TO DIGITAL TAX RETURNS AND LOCAL LICENSING The way tax returns are submitted is changing, and by 2026, landlords earning over £50,000 will need to keep digital records. There is also the possibility that the local licensing scheme will be rolled out to all local authorities and landlords will be required to apply for a license to rent out their properties.

DEALING WITH UNCERTAINTY: POTENTIAL GENERAL ELECTION There is a chance that there might be a change in government, which could affect how these issues are handled.

LUCINDA RIDDELL DIRECTOR

01423 740120 ljr@gscgrays.co.uk

N O V E M B E R 2023

27

PROPERTY ROUND-UP Properties are still selling. From single fields to working farms, and from premium town houses to the finest sporting estates in the North of England, our property experts have the local knowledge, technical expertise and broad-based experience to ensure your sale runs smoothly and the best possible price is secured.

ER D R N FE U F O

ER D R N FE U F O

BRANTON EAST SIDE FARM

THRUNTON LOWFIELD FARM

ALNWICK A first class arable and livestock farm with pri nci p a l house, annexe, four cotta ge s, and extensive modern buildings.

A p re m i u m g ra ssla n d fa rm a rou nd 156.66 a cre s w i t h a n e sta b li she d e qu i ne pe di g re e a nd stu nni ng v i ews of t h e C hev i ot Hi lls.

GUIDE PRICE: £9,100,000

GUIDE PRICE: £1,250,000

R F OA L E S

SO

OLD HALL

GSC GRAYS

LD

PARK HOUSE

SKIPTON

R IP ON

Old Hall is a superb Gra d e I I listed detached home d ati ng back to 1 6 5 7 , perfect for families set in the hea r t of the popular village of Con i stone , just outside Grassington.

A b e a u ti fu lly p re se nte d e qu e str i a n p rop e r ty, s et a m ong st 18 a cre s of s u pe rb g ra zi ng la nd w i th si x s t a bl e s a nd Oly m p i c si ze m é n a ge , com p lete w i th se p arate a n n exe / g room s’ a ccom m o dat i o n .

GUIDE PRICE: £1,250,000

28

AL N W IC K

GUIDE PRICE: £1,595,000

Follow us on social media to keep up to date with the latest properties brought to market: gscgrays_estateagency GSC Grays Estate Agency

SO

ER D R N FE U F O

LD

CHAPEL GARTH

SHEARING SHED

SO

RICHMOND

L E Y BUR N

A stunning, Grade II listed barn conversion with substantial, premi u m accommodation. Occupy i ng an elevated posit ion w i th superb, far-reaching v i ews.

A ha nd som e , tra d i ti o n a l Yor k shi re Da le s ston e - bu i l t p rop e r ty, ste e p e d i n h i s to ry a nd set i n love ly g ro u n ds of a p p roxi m ate ly 1.87 a c re s , i n the he a r t of the York s h i re Da le s Nati ona l Pa r k.

GUIDE PRICE: £795,000

GUIDE PRICE: £950,000

R F OA L E S

LD

WHISTLE CRAG HOUSE

THORNTON BRIDGE FARM

MIDDLE TON-IN-TE E S DAL E

STAIN TON

Whistle Crag House is a u ni qu e four bedroomed detache d fa m i ly home set in approximate ly 10.5 acres and occupying a n e levate d position with superb fa rreaching views over th e Te e sd a le countryside.

An su b sta nti a l fa m i l y h o me tu cke d away i n a p ri vate , se m i -r u ra l locati on w i t h i n a p p roxi m ate ly 5.8 a c re s w i t h we ll-m a i nta i ne d g a rde n s , thre e p a d d ock s a nd i nte rn a l sta b le b ays.

GUIDE PRICE: £795,000

GUIDE PRICE: £1,250,000

N O V E M B E R 2023

29

C HAIRMA N' S C LOS I NG R E M ARK S Change is the one certainty for 2024. What action is needed, if any?

It is obvious to anyone who opens a newspaper, watches the

Thatcher era of the early 1980s. However, wealth can be divisive, and in the current political and economic

television or listens to the radio,

climate there will be pressure on the Government to

that we live in uncertain and

media, in all its forms, is kept on side.

changing times. One certainty we do have is that 2024 will bring a general election, and that a new government, of whatever colour, will lead to change from where we are today.

How this will affect the world of land and property ownership/occupation, is, as ever, unknown.

Firstly, there is tax. Inheritance Tax, Capital Gains Tax, levels of Income Tax, the treatment of Stamp Duty, and alterations in the VAT system have all been talked about. As has the possible re-introduction of Development Land Tax and an Investment Income

30

Surcharge which were previously abolished during the

GSC GRAYS

not only balance the books, but also ensure that the

Secondly, there is property compliance. Letting unsafe property, or property which is not fit for purpose, is never acceptable. However, successive governments have always looked to force policy that is ‘one size fits all’.

Thankfully, there are currently some green

shoots of reality - that what is right for urban property by way of standards just cannot be economically achieved in the rural world. That is not to say that all rural properties to let aren’t safe. But environmental compliance cannot just be a box-ticking exercise, there has to be a degree of realism behind it.

Thirdly, there is the environment. How green are we actually going to be? What further anti-fossil fuel manoeuvres are going to be imposed on us? And where will we really be in 2030?

KEEP CALM AND CARRY ON

Possible changes to Capital Gains Tax and Inheritance

Successive previous elections - and even budgets -

is yet to happen. It most probably will, but ownership

have led to a rush of activity, with advisors trying to

and business structures have been introduced to try

get ahead of perceived change. What actions should

and protect property assets against change and, if one

the rural property owner/occupier take ahead of the

has acted prudently, there should be little more to do

2024 election? It would be easy to carry out a review

at this juncture.

and consider the steps that should be taken. However, isn’t this what all landowners, property owners and farmers - be they owner/occupiers or tenants - are doing anyway?

Tax have been discussed for many years but change

REMAIN AGILE Whatever the result of the next general election, the new government are going to have an awful lot to put

There has been significant change in the agricultural

right, or at least improve in the eyes of the electorate

and rural world over the last five years which has in

and media.

turn, led to a number of government-backed schemes, including the Future Farming Resilience Fund which has encouraged the farming community to carry out business reviews with the help of industry consultants, including GSC Grays.

A N Y P RUD E N T OWN E R O R OCCU PI ER O F L AN D AN D PROP ERTY I S A L RE ADY CON S IDER I N G T H E F U T U RE A N D THE FAC T T H AT THER E IS AN E L EC T I O N IN 2024 S H O U L D N ’ T LEA D TO T H E M D O I N G A N YT HING D I F F E RE N T LY.

In the meantime, run your estate, farm or business as efficiently as possible, take reasonable steps to acknowledge the need to reduce the use of carbon, without it impacting on the business itself, and maintain flexibility - being able to carry out an informed review and adapt appropriately will be key to managing the changes that will inevitably come.

Finally, let’s just hope that the Government have an understanding for those of us who live and work in the rural environment, rather than just the metropolis of London.

Indeed, to second guess what will happen post 2024 could easily lead to the wrong decisions being taken.

There are numerous rumours of political about-turn that are circulating in the media currently - are we going to see a complete ban on diesel and petrol cars post 2035 or will the next government revert to 2030? Reality appears to have seeped into Downing Street in respect of EPC ratings - anyone in the real world appreciates the target of an EPC rating of C is unrealistic, and that oil fired boilers provide a practical solution to heating rural property, while air source heat pumps don’t. Will the next incumbent of No 10 agree?

DAVID GRAY CHAIRMAN

01388 487000 dag@gscgrays.co.uk

N O V E M B E R 2023

31

RESOURCING OUR BUSINESS GROWTH STRATEGY Last

September

GSC

Grays

celebrated

its

10-

year anniversary. This was the springboard for our ambitious 5-year strategy for business growth which includes new office openings and extensive recruitment to service the growing demand across all sectors and deliver significant projects like our FBAS scheme. This has lead to some changes as we celebrate the successes achieved so far and look to

RECRUITMENT Angela Horner, Project Manager Angela’s background is in commercial banking, having worked for many years at HSBC and more recently with Handelsbanken. She lives on a small grassland farm raising sheep and cattle with a focus on sustainable

maintain momentum.

farming. Angela now manages the Farm Business

NEW BUSINESS SHAREHOLDERS

and wider specialist teams to deliver an outstanding

Advice Service (FBAS), working with the farm business service that adds real value to the farmers who sign

Directors Ali Gray, John Wallis, Lucinda Riddell and

up for the scheme.

Robert Sullivan have been influential in developing and delivering the business growth plans and have

James Thompson, Senior Farm Business Consultant

now joined the ownership of the business where they

and Rural Practice Surveyor

will build on recent successes and help shape the future direction of the company.

member with extensive experience providing advice

HEAD OF VALUATIONS

and support to farm businesses, tenants and owner-

Rachel Morris, Associate Director has also been

previously been a registered AMC agent but also

promoted to head the Valuations department and is

advises on landlord & tenant matters, succession

focussed on extending the valuations services we

planning, valuations, contract farming agreements,

offer across the south and east of our region, based

Sustainable

from our Boroughbridge office.

Stewardship applications.

Ali Gray

32

James is a qualified Chartered Surveyor and a CAAV

GSC GRAYS

John Wallis

Lucinda Riddell

occupiers. He specialises in farm finance having

Robert Sullivan

Farming

Rachel Morris

Incentive

and

Angela Horner

Countryside

James Thompson

O U R O FFIC E S We have dedicated consultants across the North of England ready to hear from you.

ALNWICK

CHESTER-LE-STREET

alnwick@gscgrays.co.uk

chesterlestreet@gscgrays.co.uk

BARNARD CASTLE

COLBURN

barnardcastle@gscgrays.co.uk

colburn@gscgrays.co.uk

BOROUGHBRIDGE

DRIFFIELD

01665 568310

01833 637000

boroughbridge@gscgrays.co.uk

01423 590500

0191 303 9540

01748 897630

driffield@gscgrays.co.uk

01377 337180 HEXHAM

hexham@gscgrays.co.uk

01434 611565

KIRKBY LONSDALE kirkbylonsdale@gscgrays.co.uk

01524 880320 PENRITH

penrith@gscgrays.co.uk

01768 597005

N O V E M B E R 2023

33

G S C G R AYS . C O . U K