Navigating the UK rural property market: trends and opportunities
23rd September 2024
The UK rural property market offers diverse opportunities and investments, with various sectors experiencing distinct cycles of growth and change. For farmers and landowners, understanding these trends is crucial for making informed decisions, says property expert Carter Jonas.
Farm and estate property consultancy Carter Jonas has highlighted some of the issues that farmers currently struggle with:
Planning
A company’s spokesperson said: “We welcome the government’s recent announcement on planning reform, particularly the return of mandatory housing targets and the emphasis on delivery in areas with acute affordability issues.
“Local authorities will be required to deliver necessary housing, and while they can decide how to do this, they cannot avoid the issue. Removing planning hurdles will enable landowners and farmers to respond more quickly to local residential and commercial development needs.
“Assuming Biodiversity Net Gain (BNG) requirements continue, those bringing forward land can seek capital uplift, assist societal aims of providing good homes, and enhance the environment.”
Energy
To achieve a ‘cheaper, zero-carbon electricity system’ by 2030, the Labour government plans to:
- Quadruple offshore wind capacity to 55GW.
- Pioneer floating offshore wind with at least 5GW of capacity.
- Triple solar power to 50GW.
- Double onshore wind capacity to 35GW.
- Support new nuclear technologies, including Small Modular Reactors.
- Invest in carbon capture and storage, hydrogen, and energy storage.
- Double the target for green hydrogen.
The Carter Jonas team said that they expect policy changes to open the market to onshore wind developers.
They confirmed that the firm has already seen increased interest from developers.
“This creates new opportunities for landowners and farmers, but care is required as the legal and commercial landscape has changed since the last round of onshore wind deals.
“Labour’s ‘Rewire Britain’ programme aims to upgrade the national transmission infrastructure, impacting land with compensation negotiations needing careful consideration,” they added.
Telephone masts
The Upper Tribunal (Lands Chamber) ruled in favour of increasing the standard rental value of an “unexceptional” rural greenfield mast site from £750 per annum to £1,750, in a decision published in late July.
Carter Jonas said that this changes the direction of rental movement from a previous decision ‘Dale Park’ in December 2020, which set a low rent and was being used by operators as an industry standard.
“This decision provides positive news for any landowner at renewal stage and emphasises the requirement for up to date advice to win the inevitable argument,” a company’s spokesperson continued.
Holiday lets
New planning considerations for holiday lets are anticipated, including a new use class for dwellings used for short-term lets (more than 90 nights a year) and not as a main home. Existing short-term lets will be reclassified automatically, Carter Jonas confirmed.
A new mandatory national register will provide local authorities with information on short-term lets. Two new permitted development rights are expected:
- Changing a property from a short-term let to a standard residential dwelling.
- Changing a property to a short-term let.
Natural capital market
Interest in and the economics of Nature Based Solutions, particularly Biodiversity Net Gain (BNG), continue to develop. It will take some time (probably years) before the full extent of the BNG market is understood.
A spokesperson for Carter Jonas added: “The good news is that sales have started to happen with, happily, the prices of units Carter Jonas have been quoting coming to be at or around the market price.”
Capital Gains Tax
CGT rates may change in the upcoming Budget, and current reliefs may be altered. Many tax reliefs are designed to keep capital flowing in the economy, and hopefully, effective ones like roll-over relief will remain, the experts said.
Inheritance Tax
Carter Jonas continued: “The end of Agricultural Property Relief (APR) has been speculated multiple times. Hopefully, the government will recognise the importance of generational succession for long-term landscape management, which has created some of the UK’s most spectacular scenery and special environments.
“In conclusion, owning land in the UK rural property market offers a spectrum of opportunities. Understanding market dynamics is essential for capitalizing on emerging trends and making informed investment decisions in this evolving landscape.”
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