Andrew Shirley is a senior member of Knight Frank's research team, he gives insight into the current land market, post-Budget announcements.
Viewpoint
Aside from destroying Labour’s claims that it understands the challenges facing the farming industry, the most disappointing aspect of the Budget was that it contained very little in the way of measures that could conceivably boost the UK’s economic productivity or deliver on the government’s ambitious environmental targets, including its 30by30 commitments.
Despite appeals from farming and environmental organisations for more funding to help rural businesses deliver a green transition, Defra’s budget was cut in real terms. Chancellor Rachel Reeves, however, says she is planning pension reforms that could unlock billions to invest in government-backed projects.
Ensuring some of this cash flows into the countryside could help add some impetus to the UK’s stuttering green finance market and perhaps restore some of Ms Reeves’ lost credibility with the rural businesses that the government desperately needs to help deliver its environmental promises.
NFU and CLA fight APR raid
Chancellor Rachel Reeves’ decision to slash the rate at which Agricultural Property Relief (APR) and Business Property Relief (BPR) are available on inherited land and farms in last week’s Budget has sparked a furious backlash from the rural community.
Victoria Vyvyan, president of the CLA, said: “Far from setting out an ambitious agenda for economic growth for the entire country, the chancellor instead chose to announce measures she must surely know would inflict permanent damage on the rural economy.
“Despite saying that she is protecting small family farms, the inheritance tax burden will affect hard-working family farms up and down the country. This a catastrophic drain on business resources.”
Both the CLA and NFU have launched petitions to allow those who disagree with the changes to share their opinion with Ms Reeves.
NFU president Tom Bradshaw said: “There is still time for the government to accept they’ve got this wrong, and my message to ministers is that they should do the right thing and reverse this awful ‘family farm’ tax.”
For advice on dealing with the ramifications of the Budget on your business, please get in touch.
MORE NEWS | North-east forage crop project underway
Conservation NGO buys Rothbury
The Wildlife Trusts and Northumberland Wildlife Trust have just bought the largest single block of agricultural property to be put up for sale in England in recent decades. The 9486-acre Rothbury Estate was sold by Knight Frank's Farms & Estates team on behalf of Lord Max Percy.
“Throughout a considered sales campaign targeting our network of environmentally conscious potential buyers, we received far-reaching interest in this exceptionally rare opportunity, highlighting the appeal of its beautiful, nature-rich landscape,” said Claire Whitfield.
Chief executive of The Wildlife Trusts, Craig Bennett said: “This is a thrilling moment for The Wildlife Trusts to create a national flagship for nature recovery for the very first time.”
Lord Percy added: “I am confident that this acquisition will secure long-term and sustainable management for the future of everyone living and working on the Rothbury Estate, as well as for the local community." Discover more about the sale of the estate
Time to repent?
Defra minister Steve Reed has the perfect opportunity to restore his credibility, which was badly dented by the Budget, and announce a change of heart regarding the government’s controversial APR raid discussed earlier. Mr Reed is due to be the keynote speaker at the upcoming CLA Rural Business Conference on 21 November at the QEII Centre in London. Knight Frank is sponsoring the conference, which this year has the theme Growing Profitable Partnerships.
Pension overhaul opportunity?
Having delivered a budget heavy on taxation and spending but offering little to help Labour deliver its aspiration to supercharge economic growth, Chancellor Rachel Reeves is promising better news lies around the corner. It is expected that her Mansion House speech on 14 November could include plans to merge local authority pension schemes into one “super fund” unlocking billions to invest in government-backed projects. Given the UK’s ambitious nature-recovery targets this could be the boost that the country’s green finance industry desperately needs.
Big pharma to fund nature
The COP16 Convention on Biodiversity in Colombia has just wrapped up with wealthy nations failing to agree on how to deliver the $20 billion of nature finance that was promised to the Global South each year at the previous COP meeting. However, an agreement was reached on a groundbreaking deal that will see chemical and pharmaceutical companies provide funding for nature restoration projects. The Digital Sequence Information fund will be based around a levy on products made with the use of genetic data from nature and will require firms to hand over 0.1% of their revenues.
The Rural Report
The latest edition of The Rural Report, our flagship publication for farm and estate owners, looks at the numerous opportunities and challenges arising in the countryside following the election of a new government. Find out more or request a copy
Property market research
Discretionary buyers held back from a new country house purchase pending Labour’s first budget on October 30. Offers from potential buyers were down 10% in the three months to August, according to the latest results from the Knight Frank Prime Country House Index.
However, the slide in average values has slowed with prices dropping by just 1.2% in the 12 months to the end of September - the lowest annual fall since Q1 2023 - points out Head of UK Residential Research Tom Bill. He predicts a total average price slide of 2% this year, dependent on the outcome of the Budget.
Farmland Q3 – Prices flatline
The farmland market in England and Wales was also on budget alert, judging by the latest results from the Knight Frank Farmland Index. Average values for bare land nudged up by just 0.2% in the third quarter of the year to £9351/acre. This was the smallest increase for several years. For more insight and data please download the full report.
Development land Q3 – Greenfield sites up
The average value of greenfield land values rose 3% in the third quarter of 2024, according to the latest instalment of our Residential Development Land Index.
However, brownfield and prime central London prices stayed flat due to thin activity, with some market participants taking a 'wait-and-see' approach ahead of the Budget, says the report’s author, Anna Ward. Housebuilders are also sceptical that it will be possible to deliver the 1.5 million new homes pledged by Labour over the next five years.
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