Positive growth in the farmhouse and country cottage markets

Two reports have recently been published by Carter Jonas’ research department on the farmhouse and country cottage markets. Both reports indicate there has been positive growth in these two markets in the six months to September 2013 which reflects the improving economic sentiment in the wider economy.

However, although the brighter economic prospects may be driving demand, it is probably the lack of supply of quality property coming on the market which is as an equally important factor pushing prices up. Carter Jonas reports the average notional price of a farmhouse now stands at £1.49 million and in the south west prices have risen by 3.9% since the spring with Somerset being highlighted as a notable “hot spot”.

But the key to achieving a successful sale is getting the price right at the outset according to Kit Harding, head of Carter Jonas’ South West Farm Agency team based in Wells.

Kit commented, “We have had a successful year selling farms and farmland throughout the South West, including here in Mid Somerset but in every instance realistic pricing remains a key factor when bringing a property to the market. Properties which achieve the best prices are those being released to the market with accurate guide prices which encourage competitive bidding which often leads to best and final closed bids from multiple parties, thereby maximising value to the vendor.”

As far as the country cottage market is concerned, although there has been growth nationally, prices in this area have remained stable. It is speculated that this is largely as a result of the stamp duty threshold at £500,000 which continues to hinder price growth for properties valued just under this level although once this threshold is breached values may well move upwards.

It is also interesting to note that the rate of growth in the prime Central London residential market has slowed in 2013, in part because of the potential threat of the introduction of a “Mansion Tax”. It is speculated that this slowdown may encourage the traditional migration of young families from London to the country, especially if they see the value of rural properties beginning to rise after a long period of stagnation. Consequently values in the farmhouse market in particular are forecast to rise by 7-10% in 2014 in areas such as mid-Somerset.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

New permitted development rights

Hot on the heals of the new permitted development rights which came in to force earlier this year the Department of Communities and Local Government have consulted on further proposed changes to the permitted development rights which could have a significant impact in the rural sector.

Before considering the changes that have been introduced and also those on which the government are consulting it is probably worth going back to basics to explain what permitted development rights are. As most people will be aware if you want to build a house or new office for example one would normally require planning consent and in the countryside in particular, carrying out such developments has often been difficult.

However, there are certain types of development that do not require planning consent such as minor extensions to houses or certain changes of use and these types of development are carefully defined and set out in “General Permitted Development Order” (GPDO). The right to carry out certain types of development under the GPDO are called “Permitted Development Rights” and it is the recent changes to these rights which may be of interest to farmers and other property owners.

The key changes which have already come in to force on 30th May this year which may impact on farmers in particular include:

• The permitted change of use from agricultural use to a whole variety of commercial uses including offices, shops, financial and professional services, restaurants, business and storage.

These new rules are not applicable to recently built farm buildings (first brought into use after 3rd July 2012 or later), buildings which have not been solely in agricultural use, Listed Buildings or where the change of use exceeds 500 sqm. There are also a number of conditions which apply, perhaps the most important of which is that if the area involved exceeds 150sqm the farmer will need to gain “prior approval” from the Local Planning Authority before enacting the change of use and the LPA have the right to refuse the application.

• The permitted change of use from offices to dwelling houses.

Again there are a number of conditions which apply. For example the building must be in office use immediately before 30th May 2013 (or last used as an office) and must be brought in to use as a house before 30th May 2016. Such change of use is also not applicable to listed buildings. For all such changes, “prior approval” from the Local Planning Authority will be required which can lead to a refusal of the application.

However, in addition to these two significant new rules the government are consulting on a number of additional potential permitted development rights including the change of use of existing buildings used for agricultural purposes of up to 150 sqm to change to residential use with up to three additional dwellings potentially allowable on farms.

It remains to be seen whether such a fundamental change will be allowed but what does seem certain is that at a government level, even if this may be resisted at the Local Planning Authority level, there is an increasing willingness to contemplate some forms of development even in the countryside which will present opportunities for some farmers and landowners.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Hot topic: Housing in rural areas

The provision of housing in rural areas in particular is always a controversial topic; landowners are often eager to see development on the edge of a village so they can profit from the development value of the land while neighbouring householders very often don’t want development “in their back yard”.

This can lead to prolonged and expensive planning applications and one of the tactics used by those protesting against development is to try to get the land which is the subject of the planning application allocated as a “Village Green”. Very many such applications appear to be spurious, but the cost of defending such a claim can be enormous and the claim may ultimately frustrate a development altogether.

However, this tactic has been recognised by government as not being in the wider public interest and they have amended the law accordingly. Thus under the Growth and Infrastructure Act 2013 landowners can now proactively protect their land prior to making a planning application so as to avoid a subsequent “Village Green” application.

The process involves the landowner depositing a statement and map with the commons registration authority (the County Council), effectively bringing to an end any period of use “as of right” for lawful sports and past times on the land to which the statement relates. The deposit of the statement will not prevent the start of a new period of recreational use as of right, but the landowner may deposit further statements to interrupt future periods of use.

This extends the protection which is already afforded to landowners in relation to linear public rights of way where a similar deposit can be made under the S31(6) of the Highways Act 1980 whereby the landowner can register those rights which exist so as to prevent new rights of way being inadvertently created.

So, if you are a landowner and wish to protect your land against a “Village Green” application or claim for a new public right of way it is suggested you should look in to depositing the appropriate statements and plans now because the relatively modest upfront cost of doing so could save you or your family a huge sum of money in the future.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

New “Small Capital Grants Scheme” for Farmers in England poised to be launched

Following the coalition government’s decision to abolish Regional Development Agencies (RDAs) the England Rural Development Programme (ERDP) has been in turmoil.

The ERDP forms part of the Common Agricultural Policy and elements of the programme had been developed and administered at a regional level by the RDAs. Thus their abolition has left a vacuum and threatened the delivery of European funds for the remainder of the programme which runs to the end of 2013.

However the government has recognised this problem and has taken the scheme back in hand to be administered by DEFRA. What this means is that they have done away with the regional delivery programmes and developed and national programme so there is now conformity across the country.

To my mind this makes a great deal of sense because under the old scheme, whether or not a farmer or rural business qualified for grant aid depended on the programme which was developed by the various RDAs. This lead to unfairness on occasions where for instance a business in Hampshire may have qualified for grant aid whereas across the regional and county border in Wiltshire, a very similar business may not have.

As you can imagine, the process of harmonising the various regional schemes has taken time and some difficult decisions have had to be made on what schemes to drop, although the national programme is now just getting up and running. The first of the new schemes which is about to be launched is called the “small capital grant scheme”.

This is an exciting opportunity for farmers although funds are likely to be limited and so farmers and foresters should be ready to make an application the moment the grant scheme opens which it is believed will be sometime in mid-November.

The scheme will initially be open for about eight weeks before it closes to allow the applications to be assessed and then the scheme will open again for another eight weeks and so on until the funds are exhausted.

The grant aid will vary from £2,500 to £25,000 although until the rules are published it is difficult to be precise as to exactly what investment proposals will qualify but in broad terms it is understood the money will be targeted at increasing the competitiveness of the agricultural and forestry sectors.


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells