Wednesday, 30 September 2015

Keep a close eye on promoting land for development

Owners wanting to promote land for development need to keep a close eye on their council’s Local Plan.

Many local authorities are reviewing their local planning policies following the last government’s significant change in emphasis, away from those led by the Regional Spatial Strategy to ones which comply with the National Planning Policy Framework (NPPF).

Within the NPPF, local authorities are not only tasked with the need to identify the number of houses required to satisfy a district’s five-year housing supply, they must also identify sites that can deliver these housing requirements which is a demanding process.  

If the local authority fails to comply with either of these requirements their housing polices will be considered “out of date”. 

In such circumstances the NPPF states that there is a presumption in favour of sustainable development, which means development can potentially take place wherever a landowner can prove the site is “sustainable” even if it is not identified for development under the local authority’s existing plan.

This is undesirable from a local authority’s perspective and so they have all worked hard to identify their five-year housing supply through the successful adoption of what most authorities call their Local Plan Part I (LLP I).  

The LLP I identifies the minimum number of additional houses required and the broad locations where it should go, including identifying some large development sites.

The local authority then needs to identify in more detail where development will go in the district’s towns and villages within which it will consider individual sites for housing, employment and community facilities. 

This will form what is known as the Local Plan Part II (LPP II) and it is during the building of this plan that landowners need to get involved if they want to promote their land for development and be identified in the emerging Local Plan.

In the Mendip District Council area, for example, the LPP I was adopted last year and the consultation phase for LLP II opened earlier this month and will close on December 16.  

This is a very important period for landowners to ensure they are promoting land for development which complies with polices set out in the LLP I.  Failure to act now could mean your land is excluded from development throughout the lifetime of the emerging local plan which in Mendip runs to 2029.

So, the message for landowners is act now and if anyone has any queries in this respect they are welcome to email me on in the first instance for free initial advice.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Monday, 28 September 2015

The farmer protests in Brussels

The farmer protests in Brussels remind us that the problems facing our dairy industry are EU-wide. Indeed they are worldwide as supply is outpacing demand.  

This is bad news for everyone other than the consumer but ironically, at least in this country, I suspect many shoppers would be happy to pay more for their milk if this helps our dairy farmers survive.

However, with supermarkets facing fierce competition they are desperately trying to attract more customers into their shops and a price war on milk has been one of their battle grounds. 

Some movement has been seen in recent weeks with various supermarkets agreeing to pay more for liquid milk and milk being made into their own brands of cheese. But this still leaves many of our dairy farmers producing milk at less than the cost of production which cannot last for long before farmers are forced to quit the industry.

It is the impact these prices have on an individual farmer’s cash flow which is crippling those who do not have sufficient financial resources to survive a downturn such as this.  

That is why the EU has agreed to make 500m euros available for dairy farmers across Europe to help relieve this cash flow crisis.  It is likely this will translate in to around £29m in the UK but my fear is that we will now enter a prolonged argument as to how this money should be allocated with the result that by the time it is eventually paid, it may be too late for some businesses.

When such payments have been made in the past they have usually come on a flat rate basis to every farmer which makes it easier to get the money out quickly.  However, because there is such a broad range of milk prices being paid to dairy farmers I believe this money should be focussed on those receiving the lower milk prices.

Such decisions, and the mechanism for payment need to be agreed quickly and I urge government ministers in DEFRA to focus their efforts on getting this money out as soon as possible. 

They must also continue to fight EU bureaucrats to relax the rules and allow the new Basic Payment Scheme funds to be released as early as possible in England where it is currently feared technical checks may hold up payments when farmers are struggling across all sectors, not just the dairy industry.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Friday, 18 September 2015

£8 million is now available for rural businesses looking to expand and promote tourism

Farming Minister George Eustice says another £8 million is now available from the Growth Programme for rural businesses looking to expand and promote tourism.  

Hopefully this new funding will help unlock the potential in farming businesses across the country, but understanding how to access the money does not seem straightforward.

The Growth Programme provides grants to aid projects in England which create jobs and help the rural economy grow. They are funded by the European Agricultural Fund for Rural Development (EAFRD).  The Rural Payments Agency manages the grants, working with Local Enterprise Partnerships (LEPs).

However, the LEPs are not well equipped to manage the process of handling these funds.  In the past similar grant schemes have been various handled centrally by DEFRA and then by the Regional Development Agencies (RDAs) and following their demise in 2010, by the newly created LEPs.  

LEPs are a rather strange invention of the last government which simply scrapped the old RDAs for ideological reasons and then left it to local authorities and businesses to set up their own LEPs.  This has proved a difficult task and now these bodies are being tasked with coordinating the delivery of funds such as the EAFRD which will prove a big challenge. 

Having looked at the website for the Heart of the South West, which is the LEP covering Somerset and Devon, there is no obvious reference to this latest tranche of funding although in the August newsletter, rural businesses are signposted to the LEADER scheme that is described as “one element of the Rural Development Programme for England, funded by the EU and Defra. 

“There is in the region of £12 million of funding available for projects that meet the eligibility criteria throughout most of rural Devon and Somerset, and the funding is available until December 2020.

“Grants will be available to support the local rural economy, and will be particularly aimed at increasing farm productivity, developing micro and small enterprises and farm diversification, rural tourism, rural services, cultural and heritage activity and increasing forestry productivity.”

The funding is being administered by eight Local Action Groups (LAGs), each covering a specific area and focused on the things that matter most to their local economies. For Somerset you are directed to contact which covers the LAGs for Western Somerset; the Heart of Wessex; parts of Making It Local; and the Levels and Moors. 

So, if you are a Somerset farming business interested in getting hold of some of this funding I suggest that in the first instance you contact the Somerset LEADER scheme in the hope they will have some idea about how you can access them.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Delay causes alarm - but be ready for quick introduction of new rules

There is considerable confusion within the lettings industry after the House of Lords literally pulled the plug on legislation that would have seen smoke alarms become compulsory from October 1 – only for it to be reinstated a week later.

Many in the lettings industry had already geared up for the change, seen as a major advance with regard to tenant safety. But the noble lords declared that the industry had not been consulted sufficiently ahead of the measure becoming effective so rejected the legislation with only three weeks to go to the deadline for implementation.

With exactly two weeks to go, the legislation was then passed meaning that from October 1 the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 will be in force.

All landlords in England, or agents acting on their behalf, will be required to install smoke alarms on every floor of their property and test them at the start of every tenancy.

Landlords or their agents must also fit carbon monoxide alarms in rooms with a solid fuel appliance, which includes wood burners and open fires.

Those who fail to meet the regulations face fines of up to £5,000.

Landlords who have not yet prepared for the smoke alarm installations believing that they no longer need worry about the October 1 deadline must now ensure they have the necessary alarms in place or risk being fined.

It is already the case that under the Buildings Regulations 1991 all newly built property from June, 1992, and houses in multiple occupation (HMOs) must have fitted mains-powered smoke alarms with battery backup.

For some time, in anticipation of the regulations that come into effect on October 1 we have been advising landlords to install smoke alarms in all properties to both protect the occupants and help prevent legal action against landlords.

It is also already a legal requirement for HMOs to have a carbon monoxide (CO) alarm fitted. We have been advising landlords to install CO alarms in all properties to protect the occupier and help prevent any legal action against the landlord.
Landlords of all rental properties (subject to a small number of exemptions – such as licensed HMO properties and properties where there is a resident landlord) are required to do the following:

1. Install at least one smoke alarm on each storey of a rental property that is used as living accommodation. These alarms may be battery powered or hardwired although some local authorities may have local regulations which require more stringent conditions. This requirement is for all rental properties, not just those with tenancies beginning after 01 October 2015. Install a CO detector in any room that contains a solid fuel appliance which includes coal- or wood-burning fires and wood-burning stoves. Wood-burning stoves installed since 2011 must already have a CO detector and a certificate proving they have been safely installed.

2. Currently gas appliances are not covered by the above Regulations but we strongly advise that CO detectors are installed in properties with gas- or oil-fired appliances. Remember, installation of CO alarms is a requirement for all rental properties with solid fuel appliances not just those with tenancies beginning after October 1, 2015.

3. Carry out testing to ensure that all smoke and CO alarms are in working order at the start of each new tenancy commencing on October 1 2015 or thereafter. There is currently no requirement to check alarms during the tenancy as this responsibility will lie with the tenant.

Ensure that you are ready for the October 1 deadline. Despite the confusion caused by a week when all believed the legislation might not go through, there is unlikely to be any period of grace.

Lisa Simon, 
Partner Head of Residential Lettings
T: 020 7518 3234 

Tuesday, 15 September 2015

Milk protests have been stimulated

Although some supermarkets are now guaranteeing to pay a minimum price for liquid milk, they have given no such assurance for the price paid for other dairy products made from milk such as butter, yoghurt or cheese. These products account for around half the milk produced in this country -- so providing guarantees on the price paid for liquid milk is only half the story.

This has stimulated milk protests across the country and farmers have blockaded the massive Morrisons depot near Bridgwater. Farmers for Action (FFA) decided to shut down the depot for a second time in a week because Morrisons turned down their request to bring forward talks on the price it pays dairy farmers for milk used to make cheese.

But it is not as simple as that. I am no expert on the milk supply chain but I do know there are many different brands of cheese and other dairy products supplied to supermarkets, and I don’t see how Morrisons or any other supermarket can control the price that all these cheesemakers pay for their milk.

Supermarkets could of course pay cheese makers more for their cheese on the basis that the makers then pay their farmers more for the milk. The price paid for cheese is obviously the fundamental point but even then it becomes increasingly complicated in that unless the cheese producer supplies all their cheese to just one retailer, it will be difficult to ensure the higher price filters back to the farmer in full.

The plight of cheesemakers themselves was also brought in to focus by the news that Cricketer Farm near Bridgwater has announced it will halt production in early 2016 after more than 60 years.

Around 20 farmers used to supply this cheesemaker with milk and they will now be hunting for a new milk buyer which will not be easy in an oversupplied market.

Cricketer Farm blamed their plight on the turmoil created by global milk oversupply and the damaging effect of the strong pound on exports. They said: “Market volatility has forced the UK dairy market into a period of uncertainty and consolidation, which is reshaping the industry to be dominated by international dairy powerhouses, focused on global strategies.”

So the pain pervades the entire dairy supply chain and it is not just dairy farmers themselves who are facing difficult times.

Unless some form of price guarantee can be introduced, the whole dairy supply chain from farmers, through processors will look very different in a year’s time and I hope the supermarkets and government realise the consequences of this sooner rather than later.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Thursday, 10 September 2015

The Autumn Market makes a welcome return

For the past 4 years we have seen a new pattern emerging in the residential sales market.

Whereas, traditionally, we used to rely on the Spring and Autumn markets being our busy selling periods, more recently January and February have become crucial to our trade. As lifestyles, demands on time and the means of contact change, the desire for immediacy gets ever stronger.  Decisions are made over Christmas family gatherings and once this desire to move becomes the focus, the house needs to be found - or sold - now! And, without a sense of urgency, desire loses its value.

Rather unnervingly, the Autumn market has been poor over the past few years.  However the mood has changed this year: August was strong and September is proving even better. The Autumn market is back!

Various events were contributing to the recent yearly cycles of strong first half, weak second half – last year it was Mark Carney’s early indication of interest rates rising.  They didn’t!  But it affected people’s thinking, nonetheless.

This Autumn, despite a very erratic stock market which could have unnerved sales, activity is strong.  We saw an over-confidence in pricing following the General Election in the Spring, but many guide prices of the time have been trimmed back and a sense of reality has returned.  We’re also comforted by a steady Government and continuing low interest rates. Lower Stamp Duty (SDLT) for anyone looking up to £925,000 is another confidence boosting factor.

Whilst those looking to buy at the top end of the market are saddled with higher SDLT, property now appears the safer haven than stocks and shares. And as oil prices continue on their downward trend, it’s unlikely the stock market will recover to any great degree soon.

As an example, just last week we agreed a sale in excess of £1,000,000 to a London buyer. Having recently sold his second home in London, he chose to re-invest in property instead of the stock market, having only visited Suffolk for a weekend.  Weighing up the choices of low interest rates on his cash funds, a volatile stock market and cyber fraud concerns, he chose a lovely Suffolk farmhouse instead. A safe choice indeed, I say!

Caroline Edwards
Residential Sales, Long Melford

T: 01787 888622

Friday, 4 September 2015

Busy doing something

It’s off to work we go this summer, according to Will Mooney, Carter Jonas partner and head of commercial in the eastern region, as he considers the difference between being in business and being productive

It is a truth universally perceived that nothing happens in the summer months. It is, apparently, a ‘slow news’ time. Great. So there’s nothing going on in Greece, Syria, Turkey or, closer to home, with welfare reform or the Labour Party’s leadership race that’s been worth reporting or commenting on during July and August will see little of substance to report either? If only it were so.

Clawing back from the weighty economic and political scene, I know that with the exception of a two week break away from the office – but not work, necessarily - my summer will continue to be as busy as the rest of my year and as so it is for most business peers.

But is being busy the same as being productive?

Not if recent reports hold true. The UK’s productivity levels are a fifth lower than the G7 countries’ average. In a post-recession position this should not be the case, it seems. Some commentators point out that the recessions of the 1980s and early 1990s burst forth in to a time of increased productivity, fuelling innovation and growth.

At this point, we have to acknowledge our fortuitous position in the East of England in being a location where innovation is the main driver of business activity - whatever the wider economic picture.

The UK economy is acquiring form for underperformance. Called the ‘productivity puzzle’, there are ongoing efforts to try and unpick the reasons why.

One strand involves the examination of the methodology and definition of ‘productivity’. In an age where much business is based on knowledge, data and information in providing services, it may no longer be credible or useful to measure ‘productivity’ in the way it can in economies where industry and manufacturing dominate.

Greater minds than mine are charged with considering how advice and services which, eventually, lead to revenue generation can be calculated and judged against conventional measures of productivity.

Indeed, is it even relevant to judge productivity in a complex world where social and business time and networks mingle? Many a coffee shop brainstorm session has brought forth an idea which, down the line, has resulted in revenue generation for many parties – not least the coffee shop owner.

How can we measure the contribution of the cappuccino to productivity? Yet without that setting and stimulant, the idea which eventually resulted in money being made might not have occurred.

It’s an over-simplification of the modern productivity puzzle but it illustrates the complexity of a business life away from a manufacturing setting where input versus output can be assessed more easily.

Another view of the puzzle suggests that the poor productivity can be blamed on quantitative easing (QE) and low interest rates.

This view argues that many businesses are only around post-recession because of the ‘easy money’ supplied by QE and the perpetuity of low interest rates. In to this mix comes the tolerance of lenders who, mindful of an atmosphere of bank-bashing, have been reluctant to pull the rug from under these unprofitable and unproductive businesses when they really should have done so.

In this view, as long as these ‘zombie companies’ have been able to service their debt, they have survived and have held back the natural innovation and productivity surges which should occur post-recession.

With the Bank of England, for the second year in a row, making mid-summer murmurings of interest rate rises in the not too distant future, perhaps August is a actually a good time to bury what will be bad news for some.

Will Mooney MRICS

Commercial, Cambridge

Wednesday, 2 September 2015

Suffolk: Our village love affair

Some years ago the search requirements of London buyers were highly predictable: a Georgian rectory or impressive farmhouse with a long drive and about 10 acres, all within a 10 mile radius of a mainline station for the City. Seclusion and no neighbours were significant search criteria. But fashions are changing. These days we are just as likely to find London buyers specifically requesting houses in a village or on the edge-of.

Whilst many of us would be thrilled to own the ultimate trophy country house, we are seeing more buyers wishing to be part of a community and part of the action. When you’re used to the busy lifestyle and buzz of London, as well as having everthing at your fingertips in terms of restaurants, gyms, theatres and cinemas etc, it can be an unexpected shock to the system when a rural setting can lead to a sense of isolation and setting up an account with your local taxi firm.

The pretty and vibrant villages of Suffolk make ours a very special county indeed. When these villages also provide a shop/s, pub, restaurant and primary school we are reaching a recession-proof area of the market. Certainly village houses have been the strongest sector of our market for the past couple of years and the tide is not going to change.

In the price range of about £600,000 - £1,250,000 the demand is exceptional. The wide buyer spectrum is made up of families, professionals, London buyers and – most strongly – the retirement market looking to downsize and be within walking distance of amenities. We have had a number of examples in the recent past where good houses in popular villages, such as Nayland, have brought about competitive bidding owing to this diverse demand.

Whilst this is positive news for the vendors, it can be somewhat frustrating for the buyers. We often see scenarios where cash buyers can swoop in to purchase. This creates a dilemma for those wishing to downsize from their well-loved long-term country house to such a village. These buyers are often very reluctant to sell before they find a house to move to but, the reality is, the village house is the biggest love affair in the market. Just as a faint heart never won a fair maiden, fortune (or the best village house) favours the bold.

Caroline Edwards
Residential Sales, Long Melford

T: 01787 888622

Retailers to pay more for milk

Pressure is mounting on retailers who have started to offer to buy milk from processors at an increased price but it is unclear how much this will impact on the price paid by processors to farmers.

ASDA has committed to paying 28p/litre to their milk supplier Arla although because Arla is a co-operative I believe the increase in price will be pooled across all 13,500 farmer members throughout Europe, not just British farmers which would dilute the benefit of this rise here in the UK.

NFU president Meurig Raymond said: “The NFU has been lobbying tirelessly for Asda to recognise the plight of the dairy industry so we are pleased that Asda has moved to support farmers in their hour of need.

“It is clear from Asda that this commitment is to support the UK dairy industry at a time of crisis. It is now important that Arla ensures this is delivered to British farmers on the ground, with immediate effect.

Aldi and Lidl have also made new commitments to pay processors 28p/litre while Morrisons will pay 26p/litre for milk before processing costs.

The Morrisons move followed the retailer’s previous announcement that it was preparing to launch this new brand giving customers the option to pay an extra 10p/litre more for it on the basis the extra 10p/litre would go back to the farm.

Again the detail as to how these new pricing plans will work is not entirely clear. But it is certain that the pressure put on retailers by farmers taking direct action and by talks behind the scenes between farming leaders in the NFU and other organisations is having some effect on the liquid milk market at least.

However, liquid milk is only one part of the dairy market. About half the milk produced in this country is processed into other products such as butter and cheese and farmers supplying milk to cheese processors for example will be unaffected by these developments.

So there is much more work to be done to help our dairy farmers across all sectors but there is no magic bullet which can insulate UK dairy farmers from the disastrously low world dairy commodity markets which are showing no sign of improvement.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381