The mar­ket

Shooting Gazette - - The review - Ian Bai­ley Di­rec­tor, ru­ral re­search, Sav­ills

In Eng­land, the re­cent pub­li­ca­tion of the Agri­cul­ture Bill her­alds the start of the Govern­ment’s clar­i­fi­ca­tion of the im­pact of Brexit on the farm­ing sec­tor. From the in­for­ma­tion avail­able we know there is sig­nif­i­cant dis­rup­tion to come in the way in which land is farmed and man­aged, and we an­tic­i­pate a ma­jor shift in the oc­cu­pa­tion of land as a re­sult.

While the Bill will not be en­acted in Scot­land, we ea­gerly await the out­come of an in­quiry by the Scot­tish Af­fairs Com­mit­tee to un­der­stand the ex­tent to which pol­icy will be in­flu­enced by West­min­ster.

De­spite the dif­fer­ing poli­cies north and south, op­por­tu­ni­ties will un­doubt­edly sur­face. The re­silience of ru­ral es­tates will be tested, par­tic­u­larly those heav­ily ex­posed to farm­ing.

Un­der­stand­ing the per­for­mance of ru­ral busi­nesses and be­ing able to bench­mark them re­mains es­sen­tial in de­ter­min­ing strat­egy to meet the chal­lenges ahead. Our 2018 Es­tate Bench­mark­ing Sur­vey con­firms busi­nesses are con­tin­u­ing to op­er­ate dy­nam­i­cally with all as­set classes be­ing worked hard.

Across the sec­tors, gross in­comes con­tinue to im­prove, up 1.2 per cent to £242 per acre on the av­er­age English es­tate and up 10.4 per cent to £164 per acre on Scot­tish es­tates. Agri­cul­ture and res­i­den­tial prop­erty re­main the bedrock of ru­ral es­tates, con­tribut­ing over three quar­ters of av­er­age gross in­come.

How­ever, own­ers have been giv­ing re­newed fo­cus to op­por­tu­ni­ties for di­ver­si­fi­ca­tion, with many pri­vately-owned es­tates look­ing to new trad­ing busi­nesses as a source of ad­di­tional rev­enue and as a means of man­ag­ing down the risk of the im­pact of Brexit on farm in­comes. Cur­rently, trad­ing in­come rep­re­sents around six per cent and 20 per cent of gross in­come across the av­er­age es­tate in Eng­land and Scot­land re­spec­tively.

There­fore, there is plenty of room for ex­pan­sion, and clearly mar­ket re­search is re­quired to help en­sure suc­cess. But, it is in­ter­est­ing to note that in the UK more peo­ple visit her­itage prop­er­ties ev­ery week­end than at­tend foot­ball matches.

Cost con­trol is a nec­es­sary ob­jec­tive and one temp­ta­tion may be to cut back on prop­erty re­pairs, which cur­rently stand at 23 per cent of gross in­come. How­ever, his­tory has shown that such an ap­proach will only im­pact on fu­ture per­for­mance, pro­duc­ing a lack of de­mand for a poor prod­uct and the spi­ralling cost of over­com­ing years of ne­glect. It is es­sen­tial to keep res­i­den­tial stock at a level with mar­ket ex­pec­ta­tions.

There are real chal­lenges ahead, and es­tate own­ers will need to watch closely the im­pact of leg­isla­tive and reg­u­la­tory change on their en­ter­prises, and the im­pact they have on costs and as­so­ci­ated in­come.

Re­silient es­tates will need to adapt and face up to change with a pos­i­tive at­ti­tude while nav­i­gat­ing the choppy post-brexit wa­ters ahead.

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