Weatherbys Hamilton Rural Newsletter
theSpecialist In this issue: Gordon Castle:
500 years on
The green dividend
Outlook Understanding the challenges to farming and estate practices
the Specialist Autumn 2020
the Specialist Autumn 2020
Forestry – the green dividend
Welcome to our Autumn 20 edition of the Specialist. It would have been hoping for too much that this issue could avoid mentioning Covid-19 and I fervently hope that come the Spring we will able to talk about something else other than the prospect of another difficult six months ahead. What I do hold on to is that when things turn, they will turn fast. Any positive news regarding the emergence of a vaccine or a satisfactory exit from the EU will change sentiment just like that and optimism will surge through all sectors. Getting through to that point without lasting damage is obviously the challenge and we are all ready to help our clients in any way that we can.
Charles Hamilton Chief Executive
On average 13,000 hectares of trees are currently being planted in the UK each year. This has taken the total wooded area to 3.19 million hectares, which comprises approximately 13% of the total land mass; 10% in England to 19% in Scotland. If we are to meet the Government’s net zero emission target by 2050 it is estimated that the current rate of planting needs to more than double to 30,000 hectares per year which is a sobering thought. There are multiple challenges to achieving this, with the greatest being the impetus needed to switch land use from agriculture to arboriculture. The current rate of planting is being partly achieved through the sale of land to forestry investors, as more buyers have become interested in the class for its financial returns and environmental benefits. Much of this land has been released through farmers and landowners selling out. However, as landowners become better able to understand the benefits of woodland to their business model, there is no reason for them not to reap the benefits themselves of establishing a well-designed timber rotation, whilst still maintaining control of their land and allowing timber and traditional agricultural crops to co-exist alongside each other. Afforestation can bring many benefits: government grants, investment assets for retirement and succession, flood mitigation, sporting, carbon footprint reduction and offsetting. There has obviously been a major shift in public attitude towards climate change which has encouraged businesses to invest in forestry to offset their carbon emissions. As a result, there is growing interest in the UK from both buyers and sellers of carbon credits that can be generated via the
Woodland Carbon Code. Commenting on this change in attitude, George Hepburne Scott, a Director of Forest Carbon, noted that “between March 2019 and September 2020, the number of Woodland Carbon Code projects (either awaiting validation, validated or verified) has doubled from 266 to 526. The 526 Woodland Carbon Code projects across the UK represent 22,482 hectares of new woodlands projected to sequester approximately 8.4 million tonnes of C0 2 over their project lifetimes”. He added “There are also Pending Issuance Units, which are effectively a promise to deliver future carbon sequestration, by purchasing early on in a project before the trees have grown. These can be used in Corporate Social Responsibility claims about the future benefit of an investment. Woodland Carbon Units – or tonnes of carbon dioxide proven to be already sequestered from the atmosphere into growing trees – can be used by companies to compensate for their unavoidable greenhouse gas emissions”. “As of 30.9.20, 1,517,000 Pending Issuance Units (1 PIU = 1 tonne of C0 2 ) had been sold from future woodland creation projects
across the UK. This accounted for 55% of all PIUs that have been validated from projects in the UK. Forest Carbon, the UK’s leading Woodland Carbon Code project developer, has recently sold PIUs to companies such as Hello Fresh, Burberry, Heathrow Airport, Foster and Partners and Confused.com”. This is all tangible evidence that forestry is playing its part in the country’s effort to become as green as possible but it is obviously going to take a huge effort to get there. Forestry has many benefits to landowners and large corporates alike, but like any crop it is at the mercy of nature and other risks. Whereas some estate policies will provide the public liability cover for forestry when it is part of their business, they won’t normally also protect against losses from fire or windthrow. A standalone specialist policy can be bought to cover all forestry risks and a pure investor will be likely to need this for the public liability element alone. In whatever way it is bought, it is important at each renewal to make sure that the cover reflects any changes in timber values and grants, as well as the cost of fencing, site clearance and professional fees.
Fly-tipping – a growing menace Fly-tipping is a national issue and a very unattractive one. Its prevalence tends to correlate to population density but in regions of the country with swathes of open countryside it is no less of a problem for the simple reason that it is probably easier to get away with. Unfortunately, there has been a substantial increase in fly-tipping this year and particularly during the lockdown period. So much so that Scotland’s leading rural and environmental organisations recently published an open letter to the Scottish government urgently asking them to provide clarity on dealing with this issue. Fly-tipping causes a wide range of problems to the natural and economic environment. This often results in substantial clear-up costs and whilst the taxpayer is responsible for the clear up on public property, landowners are responsible for dealing with anything dumped on their own land, which can be expensive.
Not all insurance policies provide cover for these clear-up costs and even if there is cover, the figure may easily be limited to a fraction of the final bill. With many council owned tips closed or with limited access, a more industrial form of fly-tipping has arisen and we are seeing claims in the region of £100,000 and above. Therefore, if you do feel vulnerable to fly-tipping it is important to check what cover and limits you have in place. If you are worried that your current policy is inadequate it is worth asking your broker to investigate alternatives. Should the waste deposited on your land be toxic, it is vital that the appropriate environment agency is contacted immediately to enable them to protect the people and property involved before the problem becomes even worse.
In the meantime, the onus rests with the landowner to take the necessary precautions to prevent fly-tipping. The following measures can help to protect your property from this very tiresome habit:
• Ensure gateways are secure and blocked if necessary
• If fly-tipping does take place, arrange
for the material to be removed as quickly as possible so that it doesn’t become known locally as a commonly used site
• Should the problem persist, consider
erecting signage and installing cameras as a deterrent, so that any information can be passed on to the police to assist with prosecutions and potential recovery of costs
the Specialist Autumn 2020
the Specialist Autumn 2020
Gordon Castle – 500 years on
Angus Gordon Lennox, Landowner Gordon Castle, Scotland
Gordon Castle was once described as the “most magnificent edifice north of the Forth” and in its heyday was one of the grandest houses in Scotland at the heart of huge estates extending to over 400,000 acres. The Gordon family were first given the Forest of Enzie by King David II of Scotland. In 1479, George Gordon, 2nd Earl of Huntly, began constructing the original Castle Gordon which was often known until the 18th century as Boggieth or Bog o’ Gight. In 1769, Alexander, 4th Duke of Gordon, commissioned the architect, John Baxter, to rebuild the castle on a monumental scale. Following the death of the 5th Duke of Gordon in 1836, the castle and the estates passed to his nephew, Charles Lennox, 5th Duke of Richmond, whose English seat was Goodwood, and it was under these Gordon Lennoxes that the castle enjoyed its heyday. The First World War affected the 7th Duke of Richmond and Gordon’s family profoundly. In the early weeks of the War, in November 1914, his youngest son, Lord Bernard Gordon Lennox, my great grandfather, was killed at Ypres. Then, in the final days of the Russian Campaign in 1919, his eldest grandson, Lord Settrington, was also killed in action.
Life at the castle was never quite the same although some traditional features continued. Most notable among these was the Gordon Castle Highland Games which was a fixture during the 7th Duke’s time and would often attract up to 30,000 visitors. We revived the Highland Games in 2011 and they take place in May each year. The 8th Duke had a relatively short tenure (1928 –1935) but he tried many innovations to make the estate successful. However, his early death, coming only seven years after his father’s, resulted in catastrophic double death duties. His son, Freddie, 9th Duke of Richmond and Gordon reluctantly took the decision to part with the castle and estate, handing it over to the Crown Estates in lieu of tax. It seemed like the end of the line. But In the early 1950s, the Crown Estate decided to sell the castle and the immediate policies and they were purchased by my grandfather Lieutenant General Sir George (Geordie) Gordon Lennox, the son of Lord Bernard who had been killed in action at Ypres. Geordie and his wife Nan took the difficult decision to demolish the central block which by this time was riddled with both wet and dry rot. They converted the old east wing into a comfortable family home.
Our tenure The running of the much reduced Gordon Castle and estate fell to me and my wife Zara in 2008 and we have set about modernising and improving the business that is Gordon Castle today and hopefully setting it up to thrive and prosper well into the 21st Century and beyond. We began by investing in the traditional estate businesses of salmon fishing on the Spey, holiday cottage accommodation and farming, but the upkeep of Gordon Castle requires a lot more income than those alone can generate and so we have also embarked on three other projects. First, we modernised the Castle to a luxurious, but still homely, standard and made it available for exclusive hire. Next, we put in the infrastructure to enable the Castle to host major events in the grounds. However, perhaps the most ambitious project has been to create a global “Gordon Castle Scotland” brand and to launch a series of high quality products which are unique to Gordon Castle with all of them emanating from the Estate, or having a unique design inspired by the Castle and its characters. All the products have the Duke of Gordon’s “G” on them, taken from a prayer book dated 1744 which we found recently in the Castle. The products currently fall in to four different categories:
• Food and drink, including a gin made with botanicals from the
Walled Garden and cider from the Castle’s own apples and pears
• Bath and body products made with essential oils distilled by us at the Castle from herbs and flowers grown in the garden
• Homeware and trinkets made to our design • Natural products from the Estate and gardens Alongside these ventures, Zara and I have created a visitor attraction, restaurant and shop at the Walled Garden, itself an ambitious project. In fact, sometimes I feel we have bitten off rather more than we can chew. The enormous garden, probably the largest productive walled kitchen garden in the country, had fallen into disrepair. However, it had been kept weed free and the two hundred and forty nine espaliered apple, plum, pear, peach,
apricot, nectarine and fig trees around the walls had been well kept for many years by Willie Robertson, a true expert who had worked in the garden since 1946. At 8 acres the garden itself was an awkward size; too big for the needs of the Castle, but not big enough to be commercially viable in a modern world. So we decided to combine heritage with productivity in a space capable of supplying the ingredients for all our own ventures. Designed with a modern twist on the traditional kitchen garden by award-winning garden designer Arne Maynard, a network of paths and beds have already been built, together with an outside performance stage and children’s play area. Together with the shop and restaurant, it is a draw for tourists and locals alike.
What Now? Nothing ever travels in a straight line and Covid-19 has made absolutely sure that the rather satisfactory trajectory of all our businesses has been completely thrown off track. Fishing, castle, restaurant, gardens and accommodation all closed; events and weddings were cancelled; and all our sales of gin and beauty products to the hospitality industry around the country ground to a halt. Drastic action needed to be taken and we took it, sadly resulting in fewer people working for us and a greatly reduced visitor attraction offering. We hope that our online sales, an albeit foreshortened holiday season, and a great year on the river, will ensure that we have been holed above the water line rather than below it; but it will be a close-run thing. A newly discovered trend for staycations and a wish to support local shops and UK brands with provenance may yet come to our rescue. Gordon Castle has had its ups and downs over the centuries but broadly speaking my family has shown extraordinary resilience over more than 500 years in ensuring its survival. Zara and I are equally committed to overcoming whatever challenges are thrown at us and to try to lay the foundations to safeguard its future for coming generations.
the Specialist Autumn 2020
the Specialist Autumn 2020
Rural crime – notes
Contract Works – keep control The building industry has been less affected than many by Covid-19 and is set to be one of the main engines of our recovery as the nation strives to repair the damage to the economy. Even before the pandemic there was plenty of activity in the housing market with people busy extending or renovating their houses but the re-thinking of lifestyles and workplaces is set to boost this even further. However, we have often found that there is reluctance from those involved in projects to address the matter of insurance in good time, or even at all. Perhaps there is a concern that insurers will penalise them, or perhaps they have used a builder before without problems and assume that “they have it covered”? The reality is that making sure that contract works insurance is in place is very important if the project is to be adequately protected and any other insurance on a building is not to be prejudiced. If you suffer a loss during the course of the works that has not been disclosed, insurers can decline to pay a claim. In some circumstances they could be within their rights to cancel a household policy entirely and without refund. Most insurers are comfortable with including low level projects within the policy but these limits can be as low as £15,000, so it is important always to check what size of contract can be covered. Contractors have their own industry guidelines to follow to avoid damaging your home, but there is unquestionably an increased risk to existing structures during works and the insurers require to be made aware of them. Depending on the nature of the work, it may sometimes be acceptable to rely on the builder’s insurance but don’t be afraid to ask questions of either them, the architect or the project manager. Ask to see a copy of the builder’s insurance policy and if you don’t understand it send it to your broker to review. Are they following building contract terms? Who is responsible for the insurance of the works? As a rule of thumb we normally suggest that you budget 1% of the project total for the cost of insurance if you need to arrange it yourself. The fact is that most reputable contractors do have insurance of some sort, but some don’t understand quite what they have and how it works. So why should I pay for my own contract works insurance?
• Relying on a contractor’s insurance carries risk and loss of control • Contractors are often not aware of the terms of their insurance and may unwittingly negate it because they have:
• Applied heat or used grinding equipment without precautions • Exceeded the depth limit when digging foundations or
• Failed to make sure their sub-contracted plumber has pressure tested new pipework
• An insolvent contractor may not have paid his premium • The building contract could be terminated by either party in the middle of the works with the insurance falling away
• The insurance obligations under the building contract and the small print of the policy may be at odds with each other
• Your mortgage terms and conditions may stipulate certain
You may think that little of this matters because you can simply take legal action against the contractor if you have to. However, quite apart from the stress and cost, few contractors have strong balance sheets and a legal action can easily see them slip into liquidation, meaning that you lose everything. By far the best solution is to use a JCT building contract. JCTs (Joint Contracts Tribunal) are the standard industry forms which set out the responsibilities and obligations of all parties in the construction process, so that it is clear as to what work needs to be done, who is doing it, when they are doing it by, and for how much. These make the client responsible for arranging insurance in ‘joint names’ with the contractor, for both the existing structure and the works. This is the most satisfactory because you stay in control of the insurance of your home in its entirety and you are protected from any negligent acts by the contractor. You can usually make sure that the insurance is placed with a single insurer, so there are no arguments or delays in getting a claim settled or the works back on track. What your broker needs to know?
• When works are due to start • Your total budget for the works (including debris removal, professional fees & VAT)
• The duration of the works • The name of your contractor • Details of any contract terms you may be using with them (JCT or other)
It is a reality that 90% of works contracts run over both budget and time, but this is not always the fault of the contractor. Delays and cost overruns are also typically caused by:
• Changes in specification • Problems discovered with the existing structure • Weather and ground conditions • Sourcing of materials • Underestimating specifications • Planning constraints • Underperforming professionals When arranging contract works insurance it is far better to overestimate your timescale and budget, to avoid having to extend the policy at a later date. If the works finish more than 30 days earlier than anticipated you can usually claim back overpaid premiums. Extending the cover, even by a couple of months, will always end up costing more than agreeing a realistic timescale at the beginning. The top three things to remember when planning contract works are:
• Talk to your broker early • Insist on a building contract • Stay in control of the insurance – it is your investment to protect
insurance cover is in place which the contractor cannot provide
• Combining cover across your household policy and the
contractor’s policy may mean that more than one insurer is involved, with the scope for claim settlements to be argued over or slowed down
• You are not formally party to an insurance contract from which you may need to benefit
TO FIND OUT MORE WHY NOT GET IN TOUCH:
email@example.com 01403 915599
It is sobering to recall that it is little more than 200 years since stealing a pig carried a death sentence or a one-way ticket to the colonies. Mercifully we live in more civilised times but the rural community is ever more challenged by organised crime with farm machinery and livestock particularly vulnerable at the moment. We have recently experienced an increased number of claims for the theft of high value tractors, quad bikes, global positioning systems (GPS) and more unusually for us, sheep. With the effects of the Coronavirus outbreak set to ripple through the country for the foreseeable future, economic hardship is only likely to fuel the growth in crime and this not a time to be relaxing security arrangements. We have experienced sheep rustling on a scale not seen before. In one incident, a farmer discovered on head count that there were an extra 40 ewes in his field with markings different to his own. He could only assume that the guest grazers had been stolen from someone else and those responsible were using his field as somewhere inconspicuous to hold them. Police believe that this is a wide-spread activity, with thieves hoping that farmers won’t notice until the stolen sheep are ready to be collected. Stolen sheep then enter the food chain illegally and distressingly some are slaughtered and butchered as they stand in the fields where they have been grazing. Earlier this year, three men from Birmingham were given substantial prison sentences for a series of attacks that saw more than 120 sheep and lambs slaughtered in 12 such incidents in Northamptonshire. In the Spring the increase in the number of people taking walks in the countryside predictably saw an increase in the incidence of dog attacks on livestock. Another consequence of the lockdown, the closure of council tips, led to an unprecedented level of fly-tipping on agricultural land. In the past months, we have seen thousands of pounds worth of GPS equipment stolen from estate premises in Oxfordshire, Northamptonshire and Hampshire. Theft of tractor GPS systems is a major concern as farms invariably now use this precision technology to manage field operations. Typically costing in the region of £10,000 per unit, GPS equipment has become a highly prized item on the shopping list of rural thieves
Insurance Valuations –
Take professional advice
and appears to be targeted to meet demand from overseas. Cover for GPS systems will be included within a tractor’s own policy but we do recommend you check with your broker to ensure that the values are specifically noted. Please see our website www.weatherbyshamilton.co.uk for various tips on how to prevent the theft of GPS systems. Land Rover Defenders, now that they have achieved vintage status, and tractors with price tags routinely well in to six figures are no less popular. Farmers and estate owners are seeking amendments to the archaic 1831 Game Act to enable tougher penalties for hare coursers and poachers. There have been widespread posts in social media of hare coursing incidents on recently harvested fields across the country and landowners report that this illegal activity is getting worse and more frequent each year. Larger fines and changes to the law are needed if it is to be made easier for the police to catch and prosecute coursers. Legislation also needs amending to allow the courts to seize and increase forfeiture powers to enable the retention of dogs and vehicles. Any fit for purpose estate policy should cover the losses suffered as a result of all these forms of illegal activity. However, claims inevitably drive up the cost of insurance and as we know there is no such thing as a victimless crime. So any measures that can be taken to prevent them happening are going to be more worthwhile than ever.
TO FIND OUT MORE WHY NOT GET IN TOUCH:
firstname.lastname@example.org 01793 847333
We can’t emphasise enough the importance of making sure that the sums insured of farm and estate buildings represent their full reinstatement value. If they prove to be too low insurers may apply average and the proceeds of any claim will be insufficient to repair the damage or reinstate the building. Clients often ask the opinion of their insurance broker but, unless they have a professionally qualified valuer within their ranks, their view on values cannot be relied upon to ensure that sums insured are sufficient. The only way to guarantee that they are right is to have buildings professionally valued at least every 5 years by a RICS accredited valuer or chartered surveyor and then indexed annually. We have so often seen the cost of a valuation repaid many times over when there is a claim and it removes any scope for disagreement or disappointment.
the Specialist Autumn 2020
Goodbye to the office? If we had been told this time last year that with 24 hours’ notice we would be upping sticks from our offices and working from home for an indefinite period, we would have thrown up our hands in horror and said that it was impossible. However, that is of course what we and many other businesses did and we adapted extraordinarily smoothly to a remote way of working, with a diet of Zoom calls replacing the everyday chat that takes place without thinking in offices. There is no doubt that productivity in areas that require long periods of concentration benefitted, small children always allowing. We are all agreed that an element of working from home is here to stay, but I think that those companies in our sector that are maintaining that there is no rush for their employees to come back to the office, if at all, are going to encounter long-term problems. It is easy to see a bunker mentality developing where employees end up being reluctant to leave home for any work-related purpose. For many brokers, client visits have already been downgraded in importance as they try to homogenise their processes and treat all their clients the same. Already they have policies of clients only meriting attention when their premiums exceed a certain level, which ultimately calls in to question the value that they add in arranging the insurance in the first place. There are after all any number of insurers who will deal direct and brokers need to demonstrate the value they add by being their clients eyes and ears in the market, as well as being available to attend them in person when and where they want. In a market that is inevitably going to become tougher in the wake of losses caused by the pandemic, brokers will need to work harder than ever to make sure that their clients’ needs are properly represented and you cannot beat actually meeting your client and seeing what needs to be insured in order to help them as much as possible.
And then there is the health of a firm itself. It is impossible to overestimate the benefits of physically being in the same space where questions can be asked and opinions shared without having to pick up the telephone, send an email, or be obliged to maintain eye contact. Those starting out on their careers need to hear how their role models speak to clients or deal with difficult situations, and as human beings so much of what we learn is through imitation. There is little of that to be had sitting alone day after day at home, coupled with the fact that the office undeniably provides many people with their main opportunity for social interaction, something that is under unhealthy pressure anyway as lives can be almost entirely lived through the internet given half a chance. The future function of offices is a hot topic and likely to remain so for some time as companies grapple with the best ways to shape their futures. Crises have always accelerated change and Covid-19 will be no different. Any scepticism about working from home has obviously been well and truly banished and we feel that a combination of office and home working will be the model of the future. A week which has three formal days in the office together, with the other two a free vote, is the one that appeals the most to us and we feel gives us an even better chance than we had before of creating the amalgam that makes a company successful. Teamwork, camaraderie, expertise and productivity are the critical elements and anything that blends those together effectively must be overwhelmingly in all clients’ interests. The long lunch may even make a welcome comeback as a crucible for creativity and collaboration and there will be absolutely nothing wrong with that!
Penrith – William Johnson 07966 030832 (Mobile) email@example.com 01768 877355 (Office)
London – Clare Blakely firstname.lastname@example.org
07827 297072 (Mobile) 0207 292 9029 (Office)
Wellingborough – Matthew Haxby 07764 153234 (Mobile) email@example.com 01933 440077 (Office)
Edinburgh – James Innes firstname.lastname@example.org
07526 252857 (Mobile) 0131 285 5064 (Office)
Newmarket – Alec Moore email@example.com
07503 671649 (Mobile) 01638 563444 (Office)
Horsham – Guy Baxter firstname.lastname@example.org
07855 626086 (Mobile) 01403 915599 (Office)
Swindon – Martin Wright email@example.com
07747 763045 (Mobile) 01793 847333 (Office)
Weatherbys Hamilton LLP is authorised and regulated by the Financial Conduct Authority. Financial Services Register number 582708 Registered office: Sanders Road, Wellingborough, Northamptonshire NN8 4BX Registered Number OC373141 Disclaimer - The views and opinions expressed in this Newsletter are solely those of the Partners of Weatherbys Hamilton LLP and do not claim to represent those of any other company or third party.