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Savills 2024
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Copyright © 2023 — Savills
Andrew Harle
Head of Rural
Fifty years ago most farmers’ livelihoods came from food production alone. Today, the need for multiple income sources is growing as businesses grapple with the evolution of the post subsidy era.
+44 (0) 7768 708 277
aharle@savills.com
One of the remarkable things about working for Savills – and I’m sure it’s the same for many other rural businesses – is the long-term commitment that many people have to their jobs. As my colleague Peter Bennett celebrates 50 years with the company, I can’t help but think what a wealth of knowledge is wrapped up in that length of service; how much about farming is still as relevant today as it was when he started, and yet also, how much has changed. Terms such as “biodiversity net gain” (BNG), “net zero” and “social value” were barely being discussed five years ago, let alone 50, yet now they fill the pages of this magazine – and the inboxes of my colleagues. This new language is a mark of how much change has been absorbed by farmers and landowners over the years. Fifty years ago, the vast majority of farmers would have probably considered food production their only income source. Now, driven by a need to replace income lost from BPS, farmers have a far wider range of options to consider, not least ones where the principal driver is not food production but, for example, carbon sequestration, renewable energy generation and biodiversity enhancement.
These extra demands on land-use, mean there is a need for change, and food production has to adapt. The maths is clear, to sustain food security for the nation at current levels (let alone increased ones), farmers will need to produce more food from less land and, when you consider that 60% of UK produce comes from just 8% of land, that’ll be no mean feat. In simple terms the answer seems to lie in farmers improving their crop yields. For the past 30 years, these yields have flatlined and the gap between the highest-performing and lowest-performing farms has widened. Now that farmers can no longer rely on subsidies to boost incomes, the importance of yields to their bottom line is paramount. Innovation will be key as farmers look to increase food production in a manner that is both financially sustainable for them and affordable for the consumer. Having dropped off the political agenda for the last few years, all parties have recently made a point of committing to food production. The hope must be that the talk translates into substantive support for farmers particularly against the backdrop of the severe weather impacts on this year’s harvest.
It is those farmers who rise to the challenge of this changing landscape – both metaphorical and literal – who will thrive. Those who see the “new” opportunities that exist as exciting rather than overwhelming will keep the traditions of a thriving rural sector alive. And one thing that hasn’t changed over 50 years, is the rural sector’s ability to rise to a challenge.
FOOD FOR THOUGHT
Change is not new, it is inevitable.
viticulture succession forestry Farm resilience
Next
News
Explore this issue
News from Savills Rural plus expert opinions
01
Life after BPS
Make the most of the Future Farming Resilience Fund
02
IN CONVERSATION
As rural estates evolve so too is the role of the land manager
03
British wine
Why is viticulture the UK’s fastest growing agricultural sector?
04
Diversification
For new business ventures, a third party opinion can be vital
05
Forestry
Winds of change as the sector matures?
06
Generation change
How to keep a family business running smoothly
07
Biodiversity Net Gain
BNG is now mandatory, is there scope for creating units on your land?
08
Behind the job title
An insider’s guide to some of the careers in Savills Rural
09
Market update
A look at farmland market activity so far this year
10
investment in portugal
The country that has a plan for a changing climate
11
Savills services
Contact details for the breadth of our rural services
12
Savills rural services
Prev
life after bps
Savills helps estates toward net-zero targets
The UK government has net zero targets to meet by 2050 and building emission reductions are a key part of that. The war in Ukraine and high global energy prices delayed the 2030 target for EPCs for residential properties to increase from an E to a C, but at some point in time EPC minimum targets will increase to at least a C. Landlords with multiple properties need to consider improvements over the longer term to future proof their portfolios and introduce energy improvements alongside routine maintenance and as properties hit refurbishment milestones. Savills has developed a Net Zero Modelling tool to use with farms and estates looking to reduce the carbon emissions of their tenanted residential properties. The approach uses the skills and experience of the building surveying team, alongside the knowledge of its minimum energy efficiency standards (MEES) assessors to create a report that estates and farms can use to help them reach net zero aims.
The team works with the client to gather information about each residential properties’ carbon emissions, potential improvements it could receive, and what the costs to make them would be. The information Savills gathers includes details such as the Energy Performance Certificate (EPC) rating, CO2 emissions, maintenance and repair costs and potential EPC after work is done. All of it is then combined into a report which gives clear and practical advice on step-by-step improvements that could be made and what the costs would be. It divides the work into stages of one to three years, three to five years, and five to ten years.
“With this report, clients are able to make strategic short, medium and long-term decisions, identifying the easy wins and more challenging requirements. One client we worked with three years ago has now sold a number of properties to fund improvements for others. These now provide comfortable and energy-efficient housing for their tenants and show good examples of retrofitting work to reduce carbon emissions.”
Every estate is different, We work with the client to identify the specific requirements of their portfolio, while causing the least inconvenience to their tenants.
David Shaw Savills Architecture and Building Surveying Team
Viewpoint:food
+44 (0) 7824 311 073
dwshaw@savills.com
+44 (0) 7525 950 782
mfountain@savills.com
david shaw
Michael Fountain
For more information, contact:
Why our food policy needs attention: How will we feed a growing nation if there isn’t any government policy to do so? Rural land use in the UK is on the cusp of change on a scale not seen since the 18th-century land clearances. As well as providing enough land for a growing population to live on, Britain’s countryside will be instrumental in helping to meet net zero targets, improving biodiversity and still providing enough food for everyone to eat. As a result of the UK leaving the EU, the Basic Payment Scheme (BPS) ended in 2023. In 2024, Scotland and Wales will continue with payments while they finalise the details for their future agricultural policies.
by kelly hewson-fisher Savills Rural Research
Food security index The Prime Minister stated, at the NFU conference in February, that “food security is a vital part of our national security”. He announced the launch of an annual food security index, although he didn’t elaborate on what would happen if the indicators declined. Nevertheless, this all feels like a move in the right direction and let’s hope that by the next election there really is a substantial policy that allows food production to truly stand side-by-side with environmental protection and recovery.
Public money for public good In England, however, the agricultural transition got underway in 2023. Basic payments for food production are being phased out and will reduce to zero by 2028. They are being replaced with public money for public goods, under the umbrella of the Environmental Land Management scheme (ELMs). Food security in the UK currently stands at between 50% and 60% and has done for over two decades. It stood at 30% after the two world wars and rose to 80% in the 1980s. Yet the UK left the EU without a food strategy and the government has, until recently, resisted considering food production to be a public good.
Carbon emissions and climate risk There is the Sustainable Farming Incentive (SFI) available under ELM. This encourages farmers to invest in soil, water and the environment – the foundations of food security – but it can hardly count as a policy for food security. This doesn’t have to be at the expense of the environmental measures. With regards to food production, many of these are now being driven by the market itself. Companies such as McCains, Nestlé and First Milk, for example, all require producers to follow regenerative agricultural practices.
+44 (0) 7977 539 956
kelly.hewsonfisher@savills.com
Savills Architecture wins work on old and new
+44 (0) 7540 204 144
mwatt@savills.com
Savills Architecture and Building Surveying team in the south west has won the tender to oversee the restoration project for the Gatehouse at Stover Country Park, an 18th century listed parkland and pleasure ground in Devon. The Grade II* listed gatehouse (also known as the Granite Lodge) is currently on Historic England's Heritage at Risk register following a long period of disuse. The works to the gatehouse form part of the wider Restoring Stover Park project. The team has developed the initial permitted scheme to repair and conserve the gatehouse, removing it from the at risk register and creating spaces for displaying archives. Work is due to start on site by late June.
In a totally different part of the country, and style of work, Savills Architecture and Building Surveying team in Scotland has secured planning permission for its design for a contemporary, off-grid, sustainable home that nestles into the hillside on Alladale Wilderness Reserve. The property is aiming to achieve close to PassivHaus standard, with high levels of insulation, whole house ventilation and triple glazing throughout. It will also have a large overhanging roof to reduce overheating and solar glare in summer and to provide shelter from the harsh Scottish weather in winter.
Mark Watt
For more information relating to Architecture and Building Surveying, contact:
Golden anniversary: Peter bennett
Later this year, Peter Bennett, will celebrate 50 years of working for Savills. He joined in 1974, initially in the Chelmsford office where he formed one half of a team of two, predominantly advising on farm management. “Back then, it was mainly in hand farming, then share farming was introduced, then contract farming, now joint ventures as units continue to get bigger,” he says, reflecting on the changes he has seen over the last half century. “Not forgetting the essential use of IT and online systems now. What a change!”
Over the course of his career he has specialised in water supply and reservoir construction and advised investors and governments in central Europe on the restructuring of state farms and the involvement of private investment. “I have seen a great number of changes over the years, in farming practices, the way we work, and farming profitability, but one thing that hasn’t changed is the interaction with clients – some of whom I’ve known for 50 years now. Working with people is still a joy.”
+44 (0) 7967 555 460
pbennett@savills.com
Peter bennett
VIEWPOINT: How do we attract the next generation?
by mark scott Talent and Recruitment Partner, Savills Rural
Rural careers could be in crisis if young people don’t know their options. Every year at Savills we have 80-100 applicants to the Rural graduate trainee scheme. And while not every graduate from a rural enterprise or land management course will send their CV our way, a good proportion will. On that basis, the number of people entering the rural workforce each year is really very small, some estimates put it at half the number it should be. And with all the land management needs that the next few decades are going to throw up, it’s a crisis that needs to be addressed. As rural employers, we have worked on designing great courses for undergraduates to take where they can learn about the wide and varied careers available in the rural management sector, and the skills they need. The problem is, I can count the institutions that provide these courses on two hands, with fingers left over. Not counting the Scottish Rural College, which is widespread across Scotland, there is not a good enough geographical spread of these colleges across England and Wales.
+44 (0) 7977 343 911
mark.scott@savills.com
Our Diary
Teams from Savills Rural will be at a number of events over the next few months. These include:
29–30 May
6–8 June
11–12 June
20–23 June
26–27 June
Suffolk Show Trinity Park, Ipswich suffolkshow.co.uk
Royal Cornwall Show The Royal Cornwall Events Centre, Wadebridge royalcornwallshow.org
Cereals Newnharm Farm, Hertfordshire cerealsevent.co.uk
Royal Highland Show Royal Highland Centre, Edinburgh royalhighlandshow.org
Groundswell Lannock Manor Farm, Hertfordshire groundswellag.com
Royal Norfolk Show Norfolk Showground, Norwich royalnorfolkshow.co.uk
If we want to break down the barriers to who considers a career in the rural sector, then we need to make it possible for people to live at home in an urban area yet study rural affairs. Or live at home and study within an hour of their home in the east of England, even. More institutions need to offer the courses, but for that to happen, more school-children and sixth-formers need to know about rural careers and show an interest in studying them. It’s a little bit chicken and egg, but we have to start somewhere with educating the next generation about the opportunities to work in surveying, preserving historic buildings, forestry, agriculture, renewables and natural capital. These are subjects that resonate strongly with Gen Z and Gen Alpha and if the knowledge of how to get into the disciplines were there, I have no doubt we could hugely expand the number of people looking to start a career in the rural sector.
The key to raising awareness is collaboration. And Savills has started work with other rural employers and the Central Association of Agricultural Valuers (CAAV) to design a Routes to Rural talent attraction strategy. Together we’re looking at how to divide up the many different career areas and then how to market them. Through open days, presentations in schools, outreach work with organisations such as the Young Farmers, and offering internships and work experience we can reach potential undergraduates before they select their field of study. We are also working with LEAF Education (Linking Environment and Farming) on career days and farm visits that allow children first-hand experience of what it’s like to work on a farm or in a forest. I grew up in suburban Newcastle where pretty much the only career I ever heard about was working on a building site. I fell into Savills by chance, but hopefully, with these initiatives we won’t have to leave it all to chance, we can educate people to make an educated choice about their future career paths and in the process truly diversify our workforce.
Schoolchildren visit working rural estate
In February, 144 pupils from different schools visited the Dunmaglass Estate near Loch Ness, for a food, farming and estate day provided by the Royal Highland Education Trust (RHET) Highland. RHET Highland is a charity that gives young people the chance to learn about food, farming and the working countryside through hands on experiences, such as visiting the Dunmaglass Estate. On the day, the children learnt all about sheep and wool, sustainable beef production, deer management, tree identification, timber products, renewable energy, farm machinery, and working dogs. The Savills Rural team in Inverness has been working closely with RHET Highland to build connections with clients, including Dunmaglass Estate. The combined effect on carbon levels could be huge. To my mind, that’s certainly worth backing.
+44 (0) 7977 293 764
krista.macleod@savills.com
Krista Macleod
Savills Woodland and Arboriculture team is helping The Crown Estate with the biggest new woodland creation scheme on Crown Estate land for decades. The scheme aims to plant 200,000 trees across 170,000 ha over the next three years. It will involve six different estates in the north east, north west and south of England. The planting has been devised in close collaboration with the Forestry Commission. It will be predominantly native broadleaf species with a small percentage of conifers and some non-native species to create biodiverse, multi-use, climate-resilient woodlands. In a separate scheme, our Estate Management team is involved in planting native hedgerows on behalf of The Crown Estate.
woodland and ARBORICULTURE
+44 (0) 7714 312 039
arawdonmogg@savills.com
ALICE RAWDON-MOGG
REcent RESEARCH
social value in a rural context Estates and farms often supply great social value in the form of housing, jobs, events, commercial opportunities and open spaces, but they often don’t record the impact this can have on the local community and wider society. The report looks at how to assess and improve social value in a rural context and includes case studies to provide examples of what can be achieved.
The Farmland Market This annual publication includes a review of the 2023 farmland market and projections for 2024 and beyond. In this election year, it also takes a look at how different political parties’ pledges might affect agricultural land values.
Forestry The third report looks in detail at the performance of the UK forestry investment market during the 2023 forest year, targets and incentivisation for tree planting and what actions can be taken to help mitigate storm damage to forests and woodlands.
+44 (0) 7976 738 610
mark.townsend@savills.com
Mark Townsend
IN ADDITION... See Savills Rural Knowledge Portal for more rural research. Visit the Knowledge Portal
explore our latest viewpoints
While due to initiatives such as the Taskforce on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD), supermarkets and banks now require farms to supply information on their carbon emissions and climate risk if they are doing business with them. With an election looming, it does seem as if politicians are starting to realise the need for more policy around food production.
Labour has pledged to improve food security as part of its “new deal for farmers”, and its focus would be to make ELMs work with a balance between food and the environment. It has committed to the land-use framework to support this balance. The Liberal Democrat Party has pledged an additional £1 billion to the agriculture budget. It says its focus would be on fairness and working on fair trade deals.
Good Transitions
in conversation
With the state of flux brought about by the ending of the Basic Payment Scheme, farmers could be worried about where they head next. Fortunately there is government-funded guidance to help them see their options.
As agriculture in the UK transitions to a world without the Basic Payment Scheme (BPS), many farmers are finding large gaps in the balance sheet. The Future Farming Resilience Fund (FFRF) provides free advice to farmers in England from experts such as Savills, to help navigate this new world. “It’s no exaggeration to say that the end of BPS is bringing about an agricultural revolution. I think we will see widespread industry consolidation as some exit the industry and others take on that land. Increasingly, I expect to see a wholesale change in how farmers manage their businesses with many adopting a far more targeted approach towards future output.” says Kieran Vallance of Savills Food and Farming.
“It has been a turbulent market over the past few years, with some farms experiencing higher profit years, followed by steep drops in commodity prices and rising costs. This has added pressure to farming businesses. “We’re having a lot more conversations about farm finances and there is weight being brought to bear by the banks. The FFRF offers farmers an opportunity to discuss business options and alternative funding streams,” says Kieran. When arable and beef farmer Charles Landless of Ian Landless Farming, Bicester heard about the FFRF from a Savills email, he took the chance to explore these options.
“We wanted to improve the resilience of our farming business, particularly in the light of increasing pressure from our bank to de-risk. We discussed the existing structure of our farming business with Chloe Gimson of Savills Food and Farming. and then undertook an extensive review of our Countryside Stewardship agreement. “After looking at several different options, we decided to replace our existing Countryside Stewardship scheme, which wasn’t due to end until 31 December 2026, with a more advanced CS scheme. This was being allowed as part of the transition process to help mitigate the loss of BPS. Savills helped us with the new application and resolving technical administrative issues at the Rural Payments Agency to enable final approval of the scheme,” says Charles. “We also received advice to explore capital funding options that led us onto applying, with the help from Savills, for a CS capital grant for fencing. Altogether, the advice resulted in the annual value of our CS payment increasing from around £10,000 to £28,000. This has meant that our arable cropping area has been reduced by around 50% and enabled us to eliminate break crops by replacing them with CS options instead.
“This reduces growing risk and the CS options, including flower rich margins and plots, winter bird food and legume and herb-rich swards, all attract good income per hectare, albeit with some costs attached. In the medium term this will lead to a more stable income and some reduction in costs and in five years‘ time, the government might be crying out for more food production.
For many farmers, the FFRF has been crucial to accessing the various environmental scheme options. Chloe Gimson says around 80% of the fund FFRF work she has been doing relates to farmers transitioning from BPS to CS or Sustainable Farming Initiative (SFI) agreements, which can be complicated to navigate correctly. Agricultural contractor Gavin Smith of Oxford Poultry Ltd was one of those who wanted some guidance on the SFI scheme, as well as help with the application itself. “I was lacking time during autumn to get on top of the SFI guidelines,” he says.
Having the advice gave me more confidence to apply for SFI and meant I got the application in earlier than I would have done on my own. This has meant I have already started to receive SFI payments, which has helped with cashflow.
Know your funds
Farmer and landowner action
Countryside Stewardship (CS) financial incentives for farmers, foresters and land managers to improve the environment, with eight grants available; CS and SFI agreements can be in place at the same time.
Sustainable Farming Incentive (SFI) rewards farmers for practices that help produce food sustainably and protect the environment, with 23 actions across eight different areas including soil health, integrated pest management and farmland wildlife.
Improving Farm Productivity Grant open to farmers, growers and related contractors, it will pay for capital items to improve farm and horticulture productivity through the use of robotic/automated equipment and the installation of solar equipment.
Farm and Equipment Technology Fund includes three grants to help buy equipment or technology to improve productivity, manage slurry and improve animal health and welfare.
Farming in Protected Landscapes Fund (FiPL) available to farmers and land managers in National Parks or AONBs in England for projects that support nature recovery, mitigate climate change, provide opportunities to discover nature and protect/improve the quality and character of the landscape.
Georgina Sweeting of Savills Food and Farming is also seeing a large proportion of clients asking for help with SFI options. “The very wet winter has led to cropping difficulties, which in turn has meant more farmers exploring alternatives. It varies across farm type – for highly productive arable units, the SFI rates don’t really stack up, but this changes for mixed farms. Herbal leys and legume fallows give flexibility and we’re seeing a lot of land go into these options.” Kieran is also seeing a large uptake in herbal leys and legume fallow options in the Cotswolds area, where the mix of arable and sheep means both are viable options either as break crops or for finishing lambs. “In some situations, though, our advice has meant that farmers have been able to access funding for something they are already doing. One of our regenerative farming clients, whose business model involves finishing cattle and low-input cereals, is now receiving thousands of pounds of income via CS for things he was already doing like growing herbal leys.” It’s not just about environmental schemes, however. Kieran says he’s also working with clients to restructure their businesses in innovative ways. “One of my clients accessed grant funding to help ease an investment for a direct drill. The new drill is helping to meet local contracting demand, while supporting the businesses’ transition towards reducing its carbon footprint for crop production, which in turn is opening up access to new markets." Inevitably however, despite Defra’s tinkering with the payment rates for SFI and other schemes, there’s still a shortfall. Recognising this and being proactive in dealing with it is key, says Georgina. “There’s no doubt that the penny is really starting to drop for some farmers who have been artificially cushioned by the BPS and haven’t been on top of the figures. Now though there’s a chance to use this funding for advice that can help them build for the future,” she says.
At a glance
Future Farming Resilience Fund - what is it and what does it offer?
Available to those in receipt of the BPS, the fund offers advice including an initial free consultation on how to manage the first few years of agricultural transition. This advice is provided by organisations like Savills and comes in a variety of forms, including one-to-one consultations, farm visits, reports with recommendations, and access to workshops and webinars. The aim is to give clarity on how farming in England is changing, identify how farmers can change their business and what they will need to do, with ways to get tailored support.
+44 (0) 7870 186 489
georgina.sweeting@savills.com
Georgina Sweeting
+44 (0) 7816 184 211
kieran.vallance@savills.com
Kieran Vallance
+44 (0) 7815 032 090
chloe.gimson@savills.com
Chloe Gimson
In conversation
BRITISH WINE
LIFE AFTER BPS
Rural estates are changing, and so too is the role of the land manager. Michael Horton based in Ipswich and Charlotte Gilfillan based in Inverness share their insights and discuss some of the differences between the two nations.
I have been involved in land management for almost 20 years in Scotland and have seen many estates, which have traditionally been loss making enterprises, evolve into multi-faceted rural businesses that are performing and making significant contributions to the local and national economy.
+44 (0) 7967 555 530
mhorton@savills.com
Mike HORTON
+44 (0) 7974 064 743
charlotte.gilfillan@savills.com
charlotte gilfillan
Without doubt one of the biggest changes I have seen during my career in estate management is the diversification of farms and estates that has arisen from the need for these businesses to create new income streams. There are now several new markets that we can develop with our clients.
Diversification into short term lets has been very popular in Scotland too, with many clients looking to capitalise on initiatives like the NC500 road route. Unfortunately though, the introduction of the Short Terms Lets Licensing Scheme has negatively impacted this market and the often fragile rural communities which rely on income from tourism.
Here in the east of England, especially so on the coast, one of the most common forms of diversification has been into the leisure sector, notably providing accommodation such as cottages, glamping pods and campsites. The key to success is an unswerving focus on customer satisfaction, given the standards required and the advent of social media. Others now include agritourism increasingly linked to environmental enhancement.
Yes, we are finding our clients are looking to take a much more strategic approach to their businesses, allowing them to capitalise on opportunities such as natural capital, tourism and renewables and manage risk such as compliance of housing stock. This is where our role as estate managers has also evolved as we are as much entrepreneurs as we are managers.
I would say clients are far more financially driven and aware, that is not to say that the previous generation wasn’t but the commercial focus is different. A key part of my responsibility now is investment appraisal if clients are committing capital.
In Scotland, the National Planning Framework 4 strengthens support for renewables. While the policy picture looks more positive and advancement of technology provides new opportunities, the challenge is building the necessary infrastructure to support this.
That’s true. One of the opportunities that was far less common earlier in my career is renewable energy. Wind, solar, anaerobic digestors, hydro, the advent of these now offer big possibilities, which is set to develop further.
There have been other changes, too, which have put an increasing legislative burden on landlords. These create a requirement for additional investment, but landlords have a limited ability to increase rents to reflect this. In general, we are finding yields are almost non-existent and some clients are having to consider consolidation of rural property portfolios. That’s very much at odds with many estate owners’ objectives of wanting to supply rural housing to help support local communities. Another thing happening in Scotland is that there is high demand for let agricultural land, against a very limited supply.
I keep a weather-eye on policy and legislation north of the border, as quite often it is introduced in England and Wales, some of these less welcome, like the worrying prospect of rent controls. I understand the motivation around the idea in Scotland, but some of the proposals in the Renters Reform Bill in England could have a huge long-term impact on the supply of rural rental properties at a time when we need more availability.
Finding the right balance between sustainable food production and other land-use objectives like forestry is quite a challenge here. Land ownership in Scotland has been subject to a lot of change, with an increasing number of new buyers looking to take advantage of grants for woodland creation and peatland restoration to offset their own carbon emissions. This has resulted in an often polarised debate regarding land use. Land is a finite resource and we need to work collaboratively to identify the right land uses, in the right places, for the right reasons.
In England I’m noticing a big shift by owners to farm their estates in-hand because they want to farm in a way that suits their purpose, one that ensures that their tax status is as flexible as possible, and from a desire to develop large scale environmental schemes.
We are seeing an increasing number of farms taking a regenerative agriculture approach, too, and the new subsidy arrangements in Scotland will focus heavily on biodiversity gain and a low carbon approach. I would like to see more financial support for the development of farm clusters. The Farm cluster model is well established in England and has demonstrated what can be achieved in respect of the environmental, social and financial benefits through working collaboratively.
I agree. But agriculture has always navigated its way through change. Stewardship and custodianship of the land is not a new phenomenon, but what is new is the identification of some of the markets in this space including carbon capture and biodiversity net gain.
There has been a general greening of support throughout my career of working with farmers. It’s not all new, I was involved in one of the first environmental schemes, the Broads Marsh Grazing Scheme in the Norfolk Broads back in 1987. It does not take away from what I think is the farmer’s first priority, which is producing food. Farmers want to produce food while protecting the environment. These two objectives are entirely compatible.
Grape expectations
DIVERSIFICATION
Viticulture is now the fastest growing agricultural sector in the UK. Our experts look at how it’s evolving.
A streak of chalk-heavy soil, similar to that which primes grapes in the Champagne region, has always run from the North Downs through Sussex and into France. But it’s the British climate, particularly in the southern region, that has changed. It’s now become increasingly favourable for grape cultivation thanks to warming temperatures. Currently, the majority of vineyards are found in Kent (which accounts for 26% of the country’s plantings), Sussex and Hampshire, with a few in Cornwall and others located in Snowdonia, Herefordshire and East Anglia. Suitable areas are those with free-draining soils and south-facing slopes that aren’t likely to be battered by strong winds and late frosts. Chardonnay, Pinot Noir and Pinot Meunier – the three grapes used to make champagne – are the main varieties planted in Britain, followed by Bacchus, Seyval and Ortega, which are grown for still white and rosé wines. Commentators predict that if temperatures in the UK continue to rise, there could be opportunities for planting varieties to make red wine and other areas suitable for viticulture could open up in the East Midlands and Severn Valley.
Winemakers from Sussex, Kent and Hampshire picked up 143 medals, including gold, in last year’s Decanter World Wine Awards, with a best-in-show for Gusborne’s Blanc de Blancs 2018 (widely regarded as the best year so far in British winemaking). A platinum medal was awarded to Ridgeview’s Rosé de Noirs 2018, a sparkling rosé made in East Sussex, with other awards going to makers in Cornwall and Shropshire. While detractors of British wine raise concerns about quality and the price of a bottle (a bottle of British still wine often costs around £20), others see it as an opportunity. Recent investments include one last summer by the California-based Jackson Family Wines. Part of a US giant, it will be working with a wine-making facility in Kent and is buying land, including beyond the chalk sites that attract most English producers. Meanwhile, in December last year, the country’s best-known producer, Chapel Down, entered the AIM, explaining that the move (from Aquis stock exchange) reflects the increasing demand from institutional investors.
These figures are still tiny when compared with traditional wine-growing countries – France and Italy together produce more than five billion bottles each year – but the UK area is growing faster than any of the top 25 wine-producing countries. If new plantings continue at their recent pace and yields continue to rise, by 2032 it is anticipated that Britain will produce close to 40 million bottles a year. To date, the majority of investors in the sector tend to be people who have had a successful career and are looking for a change in direction. Some well-publicised long-established big names have also entered the British wine market. This year will see the first release of sparkling wine from Domaine Evremond, Champagne Taitinger’s venture in Kent, which began in 2015. Pommery, meanwhile, has land in Hampshire, and the world’s biggest sparkling wine company, Henkell Freixenet, bought the Bolney wine estate in Sussex in 2022.
Looking back three decades, few seriously considered that British wine had a future. According to Vines in a Cold Climate by the drinks’ writer Henry Jeffreys, interest began in the 1970s among retirees with “a major’s pension and a double-barrelled surname”. Then a more professional approach was adopted. When in 1997 a sparkling wine from Nyetimber in Sussex beat several champagnes in an international competition, it turned heads. Since then, a reputation for producing high-quality sparkling wines has been established. While in its infancy, the English and Welsh wine industry modelled itself on champagne and adopted the same method, now makers are growing in confidence about what they are doing. It’s not just about sparkling wine but still wine, too, and Essex, which has clay soil, is fast growing a reputation as one of the premium still-wine counties, especially Pinot Noir and Chardonnay. Wineries are also diversifying into producing vermouth and grape-based spirits, too.
This year, British Airways introduced a new rotation of all-British bubbles for passengers travelling in their business and first classes. Some of the winemakers, including Hattingley Valley, have created bespoke blends specifically to be enjoyed at altitude. While the airline has been serving home-grown wine for almost a decade, outside observers note that this new programme aligns with a pivotal time in British winemaking. The volumes required to serve it in business class are substantial; thanks to recent growth in production, those demands can now be met. There are now over 940 vineyards in the UK, covering a total of about 10,000 acres – the vast majority in England, with 170 or so acres in Wales, according to Wine GB, the national association for the English and Welsh wine industry. Its figures show that the amount of land growing vines has increased by nearly 75% in the period from 2018 to 2023. Its latest survey of producer members reveals that 2023 produced an enormous grape harvest – enough to make between 20 and 22 million bottles of wine. That figure is up to 68% more than Britain’s previous record harvest of 2018, when enough grapes for 13.1 million bottles were picked.
Every single plant needs tending and the quality of the fruit is very important. Each day of rain during the harvest season has an impact on the amount of sugar, so there’s no doubt that growing vineyards is riskier the further north and west you are, as the weather patterns are that much more unreliable. Having said that, it’s incredibly exciting. Last year we harvested 50 tonnes of fruit and this year we plan to produce our own-label wine. Jo Hilditch
On top might be ecological or viticulturalist assessments and labour costs for planting and maintaining the vines. These have been estimated to be between £12,000 and £14,000 per acre. “Then the vines take up to five years to reach full productivity,” adds Chris. “Few expect to become millionaires, but they do now expect a bit of a return for all the hard work.” Jo Hilditch of Whittern Farms, on the Herefordshire Welsh Borders, would agree. She was already producing blackcurrants and cider apples when, in 2020, she and the team decided to diversify into vineyards as well. “There had been an oversupply of apples in the area and so we were bought out of a contract,” explains Jo. “Rather than putting the land back into arable, we decided to harness our knowledge and expertise of fruit growing and plant 30 acres of vineyards using the same equipment and machinery we already had on the farm.”
The price of land suitable for vines typically ranges from £16,000 to £20,000 per acre, while established vineyards, aged 5 to 20 years, can sell for up to £35,000 per planted acre (productivity tends to drop off after 20 years). “It requires a significant upfront investment,” says valuer Guy Streeter, based in Savills Petworth Office. “For the period 2021–2023, my team valued just over £84 million worth of vineyard assets in an area amounting to just over 3,800 acres.” An uptick in wine-making has had an impact on land values, adds Chris Spofforth of Savills Rural, who has been involved in the market since the early 2010s. “It’s much more commercial nowadays than it used to be and many vineyards now sell on the private market,” he explains. The set-up costs include soil conditioning, root stock and infrastructure such as trellising and fencing.
They planted three German varieties – Seyval Blanc, Reichensteiner and Madeline Angevine, which are best suited to the local climate. The grapes are sold to Fitz Wines, which makes sparkling wine using the Charmat method, similar to prosecco. “There are challenges – even as mechanised as we are, it’s very labour intensive,” explains Jo. Ashley Lilley of Savills Rural helped the team at Whittern expand into viticulture, acting as a “sounding board”. His advice for anyone wanting to do the same is to look thoroughly at feasibility, financial strength and resources. “Like any kind of diversification, the best examples are those that start off in a small way and then grow organically. Going in too big at the beginning – particularly with viticulture, where there is a large upfront investment and a gap of four or five years until the first harvest – can be risky. It can be hugely rewarding, but it’s so important to go in with your eyes open.”
ESTABLISHING A VINEYARD
943
Hectares under vine in the UK have more than quadrupled since 2000
2,300 people are employed full time with a predicted 50% growth in jobs by 2025
68% of the 12m bottles produced in 2022 were sparkling
The price of the most expensive bottle of English wine, Fifty One Degrees North from Gusborne
£195
Vineyards in Britain
THE MARKET
To hear more about the viticulture market and the opportunities that it presents, watch our short video filmed at Yotes Court Vineyard.
Seen from outside
FORESTRY
It can be difficult to take a step back and review the running of your business when you’re caught up in the day-to-day management, but inviting someone else in to take that step for you could be the answer
When you’re setting up a new tourism or event business, there are always countless questions. What should I charge? Who will my customers be? Who should run it? How do I advertise? However, while these are all important considerations, they are not just relevant to the set-up process, says Adam Davies of Savills Tourism, Leisure and Events Consultancy, they are questions that you should continue asking throughout the lifetime of the business. “It has been a tough few years for tourism and leisure businesses,” says Adam. “But those who do well are those who consistently look at their business, the market and their customers’ needs, and make the changes that are required.” In recent years, rural leisure businesses have faced multiple challenges: Covid, the cost of living crisis, a scarcity of staff post Brexit and greater competition in the marketplace as more landowners look to diversify. “There’s plenty to think about,” says Adam. “And that’s on top of many other changes, such as the rise of social media in how customers research travel options, or new legislation around short term lets. It’s a lot for an operator to keep on top of, especially when they’ve got the day-to-day management to concentrate on too.” As an example a business health check can look at social media for a business, which now plays a huge part in the tourism sector. As younger generations start to become paying customers, how a business uses social media to market itself will have to change to keep up. A recent report from glamping site operators Canopy & Stars, reported that TikTok, rather than Instagram, is now its fastest growing channel for users looking for holiday inspiration. And it pays to be aware: bookings from 18-24 year - olds at Canopy & Stars have risen 400% in the last year.
Adam mentions a visitor attraction he once worked with where there weren’t written procedures for checking the fire alarm or making sure the first aid kit was kept stocked. “It can seem like a small oversight, until something goes wrong,” he says. Adam has come across issues in employment contracts. When a venture has grown organically from being a labour of love for the owner, to one with a permanent workforce, he has found that there can be a lack of any policy for employee entitlements and benefits. “These things are important, both from a legal point of view, but also making sure that your employment offering isn’t falling behind that of your competitors. In a marketplace that is currently short of staff, you need to be doing everything you can to aid staff retention.” Of course, it’s not always because of change and growth that a business needs to review how it operates. It’s equally important for businesses which have been doing things a certain way for years. It can often take an external pair of eyes to point out where change might be helpful, not only because it can be difficult to look objectively if it’s your own business, but also because an external professional can bring a wealth of knowledge and experience. Adam recently provided a business health check to an upmarket exclusive-use holiday property. “The advice was wide-ranging,” he says. “We covered their website and marketing channels, but also internal improvements they could make to the house, their pricing matrix and the possibility of outsourcing their laundry.” The results show that no question is off the table when it comes to reviewing a business, including: Who should do the washing?
“The health check was definitely useful. Adam is very knowledgeable on the practical side of running events and the bigger picture trends. He gave some great insight into ways we might change our focus in certain areas, for example increasing staff wages and how we work with suppliers. “I’m in the process of rewilding what used to be farmland at Kinkell Byre and I’ve got lots of ideas for developing more outreach work to do with that and bringing in the local community more with allotments and a cycle path, and we have also recently completed 10 cabins for guests. Once that is underway, and I've implemented some other operational changes, I’ll definitely call Adam back, I think the health check is something worth doing on a regular basis.”
In practice
Rory Fife, the owner of Kinkell Byre, a wedding venue near St Andrews, discusses his property’s recent business health check.
“A friend of mine mentioned the business health check service that Adam and Savills offer, and I thought it would be a good idea to get another pair of eyes to look at the wedding business. It has been going since 2003, and although I grew up here, I only moved back and took over running Kinkell Byre five years ago, after a career spent as an economist in the Middle East. “The business employs five full-time staff and 10 full-time equivalents, as well as providing business for external suppliers. We’re busy with events every weekend, and during the week too in the summer. So, it’s a healthy business, but as an economist, I thought it made good sense to have an outsider’s view, to make sure we were operating as efficiently as possible.
Another element we come across quite often with people who have set up diversification businesses is that these have frequently started off small with the owner doing just about everything, but as they’ve grown and taken on more people, the owner has stepped back, but hasn’t necessarily put procedures in place to make sure that the many jobs they previously held in their head are now shared out among the new workforce.
+44 (0) 7929 854 314
adam.davies@savills.com
Adam Davies
+44 (0) 7855 999 486
sfoster@savills.com
simon foster
visit: kinkellbyre.com
Commercial forestry sector -
GENERATION CHANGE
Following several years of positive growth in the forestry sector, 2023 marked a change in the pattern. James Adamson of Savills Forestry unpicks the figures.
Like all investment markets last year, the commercial forestry market was subdued. There was a general lethargy across many sectors largely down to the rapid rise in interest rates. However, towards the end of last year and at the beginning of this one, we have seen much more confidence from potential buyers as interest rate rises appear to have reached the top. Although this has not fully translated into market activity yet, I feel confidence is building. It wasn’t just commercial forestry that had a tough year. The amenity woodland market, which relies on general wealth and confidence in the economy, was eroded by the cost-of-living crisis. In general, prospective purchasers preferred to hold on to their cash rather than undertake discretionary spending.
a mature investment
by James ADAMSON
+44 (0) 7807 999 751
james.adamson@savills.com
There are very few properties that can't be enhanced with well-designed tree planting so there is no reason not to try.
How would you describe the forestry market in 2023?
New house-building, which is a major user of sawlog timber, showed increasing uncertainty last year and this weighed on timber demand. Of course, this allows one of the great attributes of timber to come to the fore, which is that if the market isn’t there, you don’t need to harvest. We saw a lot of postponed harvesting in 2023.
Is the appetite for timber still strong?
There was very little market activity – less than 40 trades of investment grade forest assets over the year – which means that from a statistical point of view, it is tricky to translate the prices paid into trends. Due to the slower market, forest properties inevitably sold at a lower price than they had the previous year, on average falling around 10%, but with a wide variance from case to case.
How did prices compare to previous years?
Yes, but demand has dropped away from 2020-2021 levels. While there is plenty of optimism around the woodland carbon market, the long term nature of the product means the financial picture isn’t certain yet. In England, there is renewed confidence in tree planting grants and there is an appetite for woodland creation, but the economics of competing land-uses makes conversion to woodland a tough choice in many instances. Scotland traditionally provides the majority of new planting in the UK, but the Scottish Government has recently cut the funding for planting grants, although not its planting target. It will be interesting to see whether this is the start of a transition towards a different funding model, less supported by the public purse. In Wales, there is fairly vocal opposition to tree planting, especially where it is undertaken by institutional investors, but it remains a key government target, so provides interesting stimulus to the land-use debate.
And are people still looking for land to plant for timber or woodland carbon credits?
We have seen a rapid evolution in new planting dynamics, driven by the role trees can play in mitigating the climate crisis. Landowners need to consider what their overarching objective is, and at what scale. Any land use change can be a long process and woodland creation is no exception. With site surveys, planting design, making a grant application, reserving tree stock and finding suitable contractors, the process can often take years not months. England has recognised this is a constraint and has announced a new fast-track scheme for low-sensitivity sites. It is clear that UK-wide planting targets are not going to be met, but it is also true that there are very few properties that can’t be enhanced with well-designed tree planting so there is no reason not to try. We are still at the very beginning of the carbon journey, so there is some way to go before we can be confident about the merits of monetising carbon, or not, as the case may be. My view is, if you want commercial woodland don’t fixate on carbon, but if you want to plant landscape, amenity or conservation woodland it could be a real bonus in due course.
What do you think landowners and investors looking to start forestry planting projects need to consider?
Six tips for successful succession planning
BIODIVERSITY NET GAIN
New generations rarely think like the old ones, so how do you successfully work together to ensure the smooth transition of the family estate?
Next generation successors are more inclined to look at estates as businesses rather than simply investment portfolios, adds Clive Beer of Savills Rural Consultancy Services. They’re creative, entrepreneurial and egalitarian, with a greater wish to engage with new markets, like natural capital, and to explore diversification opportunities.”
In an ideal world, the transition of the family estate from one generation to another would be straightforward, with everyone happily embracing new chapters in their lives. In reality, the future longevity of an estate doesn’t just happen, it needs careful planning. There is a desire among many of the next generation to become a different type of custodian, explains Ben Knight of Savills Rural. “They’re aware of their estate’s brand value, but they have also seen past struggles with things like fixed tenancy agreements, for example, so they’re much more drawn to a collaborative approach.”
“From what I’m seeing, next generation successors also have a different attitude towards risk, which makes them more open-minded,” says Sarah Butler of Savills Rural. “And they’re much less comfortable with the historic, ‘feudal’ kind of tenant/landlord relationship.” Inevitably, this reluctance to remain in the past means that both generations have to find ways of working with each other to ease the transition and ensure future success.
“Communication is key. If issues are raised, they can be resolved but if you keep knowledge to yourself, do not expect a positive outcome. People can only manage what they know. Transparent, two-way communication ensures that successors develop realistic expectations, but both sides must respect each other’s views.
Family values
Clive Beer of Savills Rural Consultancy Services discusses tips and techniques for working together successfully as a family.
“It can be difficult for older generations to forget that their offspring are now adults, with responsibilities to their own partners and children, and there’s always a temptation to cross boundaries with families that you might not cross with other work colleagues. I find intellectual honesty to be a powerful tool of persuasion. I also advocate focusing on the thought process. If you have an amazing thought process, you’ll find the right answer. People often start with the answer and that’s the wrong approach.
“What should you avoid? You should avoid saying there are sacred cows because, straight away, you’ve fettered the range of discussions. Poor language, like sarcasm, hinders communication, as does bringing up things from the past, unless there’s a genuine impact on the present or future. And you should definitely avoid being a keyboard warrior – happily espousing contentious views from behind a computer screen, but avoiding discussing them in person.”
“If you don’t train people for wealth stewardship, don’t be surprised if they’re no good at it,” says Ben. Training successors to be custodians of wealth is critical – this can include gaining external qualifications or running businesses off the estate, attending estate meetings, getting involved in estate enterprise, or bringing forward new initiatives. Finally, succession doesn’t just happen; it must be nurtured to be successful. “The next generation needs the freedom to make their own mistakes and to own them without blame,” observes Sarah. That way, the estate can evolve as the next generation grows in confidence.
Training and education
Lack of communication in a family business leads to assumptions, unwelcome surprises, and decisions not being made. Conversely, the best lines of communication involve openness, honesty, transparency, and an opportunity to share knowledge that might not be formally written down (see below.) “Often, the struggle comes in communicating the benefits of new ideas,” says Ben. “The older generation may see it as an idealised approach whereas, for the next generation, it’s an opportunity to suggest new solutions and apply fresh perspectives.” Good communication also ensures things that have always happened, such as community events, will carry on. “Something as simple as a village Christmas party not happening can unravel decades of community goodwill because the next generation either has no idea about it, doesn’t take responsibility for it, or simply forgets to organise it,” explains Sarah. “Without effective communication, these soft skills can easily trip up successors.”
Two-way communication
Adopting a modern business structure across the whole estate is strongly advised – particularly during a transition phase. “We recommend putting in place Trustees/non-exec directors and introducing different board levels to carry out decision-making,” says Ben. “This allows the successor to join a new board at an advisory level and become involved in discussions about the estate’s ambitions and objectives before assuming more responsibility at a later date.” “Successors can also initially be given ownership for a stand-alone business within the estate and gradually expand their responsibilities across more enterprises,” adds Sarah.
Third party support
With succession planning happening much earlier than it used to, successors have far greater opportunity to make clear career choices. “Setting critical dates gives people more freedom because everyone can work to the same timeline,” says Clive. “But what is worse than having no timeline at all, is to promise a timeline then not adhere to it,” notes Ben. “The aim is to agree a timeline that suits both parties, then stick to it.”
Workable timelines
Whether it’s an inter-generational family agreement or an estate bible that summarises estate assets and defines strategic objectives, the aim is the same: to avoid misunderstandings and future strife. The family agreement ensures that all generations know what is expected of them, and the estate bible provides a business plan and a blueprint for the management of the estate. However, with both types of document, they only work if all generations take part in discussions and agree the outcomes.
Written agreements
Today, typical estate ownership structures mean that it may not always be a “whole estate” succession, so clear boundaries and definitions need to be established. “The future role of an historic house can be a big sticking point,” says Ben. “The incoming generation welcomes more flexibility around the use of the house – pop-up restaurants and flexible accommodation, for example – so that’s an area that needs absolute clarity. “The succession of titles also needs to be established,” adds Clive. “Nowadays, there is a greater acceptance that while the title might go to an elder son, the management, or even the ownership, of the estate could potentially go to a sibling better placed to run the family business.”
Clear definitions
+44 (0) 7867 786 607
bknight@savills.com
BEN KNIGHT
For more information about succession planning, contact:
+44 (0) 07917 423 588
sbutler@savills.com
sarah butler
+44 (0) 7967 555 654
cbeer@savills.com
clive beer
Land of opportunity
BEHIND THE JOB TITLE
Could your property benefit from supplying land for Biodiversity Net Gain units?
Meeting Biodiversity Net Gain (BNG) targets, set by the government, became compulsory for developers in England on 12 February 2024. Described by Natural England as “an ambitious government strategy to make sure that habitat for wildlife is in a better state than it was before development”, BNG requirements mean developers must provide at least 110% of the biodiversity value found on the site prior to their development, once work is finished. Developers must follow the mitigation hierarchy, which in the simplest of terms means provision of biodiversity on-site, or where this is not possible off-site via a local authority framework, and as a last resort the purchase of statutory biodiversity credits through Natural England. Rural land provides a unique opportunity to deliver these off-site BNG units, says Johnny Campbell of Savills Rural. Land put forward to qualify as possible off-site BNG units is assessed for its biodiversity performance, which is calculated using the Defra Metric. This metric assesses four key site components: distinctiveness, condition, strategic significance, and the area of the habitat, to ascertain a baseline habitat score. Following the baseline assessment, actions are proposed for how it can be approved, either through enhancement of existing habitat, or creation of new habitat. These improvements are formalised into a 30-year site Habitat Management and Monitoring Plan (HMMP). The natural capital marketplace is all about additionality, which is to say that the environmental action would not have happened without the financial reward for the outcome.
Land with the lowest baseline has the most headroom for additional biodiversity, or uplift, for example monoculture arable or species-poor grassland and can therefore yield higher BNG units per hectare. Should farming businesses wishing to continue farming put land forward for BNG, ideally it would not be part of core day-to-day operations. For example, more unproductive and marginal land. This land, with the correct management, has the potential to provide significant biodiversity benefits that can unlock local development through the distribution of BNG units. Demand for BNG units is naturally linked to the level of development in a local area and “we are seeing demand for BNG units beginning to creep up following the mandatory start date earlier this year," says Julia Pound of Savills natural capital brokerage.
The recent approval of responsible bodies (to deliver conservation covenants) will allow off-site BNG transactions in areas where there isn’t a local authority framework to enable them. One of the benefits of responsible bodies will be their ability to sign off schemes in different geographical areas. This will help move things along,” says Johnny. “It’s also possible to ‘stack’ payments for land being used for BNG alongside other private and public environmental schemes such as Nutrient Neutrality or the Sustainable Farming Initiative (SFI). To do this, however, landowners must be able to demonstrate that each payment is for an additional action,” says Johnny.
"There are things to take into consideration, however, not least that there are considerable speculative costs, which can reach figures of £20,000-£30,000, to generate the required baseline ecological survey, HMMP plus associated legal costs. This may take months or possibly years to be recouped. Some local planning authorities have not had the time or resource to progress the framework that will enable BNG, therefore the speed of returns from BNG could vary geographically,” he adds. Another key consideration is the length of time the land will be tied into the HMMP agreement – at least 30 years.
“This may well mean that the original landowner might not be the one to deliver on the agreement for its full term. It’s important to discuss succession planning when considering BNG, to make sure that the next generation is willing to continue to deliver the biodiversity uplifts required,” says Julia. “Inevitably, having an HMMP agreement on an area of land will impact its value should the land parcel, or farm as a whole, come to be sold. Again, this is another aspect to consider.” Whilst the detail is evolving, the recent HMRC announcement that land in certain environmental stewardship schemes, such as a S.106 or Conservation Covenant, will qualify for Agricultural Property Relief, will give landowners more confidence in putting land forward.
What is the Savills Environmental Exchange?
Our natural capital brokerage team is working with a number of landowners and credit providers to bring forward a suite of environmental schemes to help unlock local development. Savills works with clients across the country to create habitat banks and these can be paired with developers through the SEE’s map-based mechanism. It is free to use and is the first port of call when there is an enquiry for environmental credits. The SEE currently has access to over 5,000 BNG units incorporating more than 50,000 hectares for distribution throughout the country. Visit: Savills Environmental Exchange
Baseline ecological survey – this looks at what the land has now; the Defra metric uses habitat as a proxy, so, for example, it looks at the species in a grassland or woodland (rather than bird or insect species numbers) to quantify the baseline units.
How to put land forward for BNG units
Here’s a quick look at the process:
A Habitat Management and Monitoring Plan (HMMP) puts in place the ways in which the mandatory 10% lift in BNG will be achieved, plus how these will be monitored, reported and reviewed.
Legal agreement – this will secure the HMMP and must last for at least 30 years.
Add the habitat bank to the National Sites Register so that credits can be issued for planning applications.
For anyone thinking of putting land forward it’s worth getting professional advice on the costs and benefits to see if it is the right scheme for your business. Sites / units can also be listed on platforms to capture the development market, for example the Savills Environmental Exchange.
+44 (0) 7974 585 191
johnny.campbell@savills.com
johnny campbell
+44 (0) 7807 999 838
julia.pound@savills.com
JULIA POUND
In their own words
MARKET UPDATE
Savills Rural has a huge range of roles, here three employees tell us about theirs.
julia pound
Natural Capital BROKERAGE
Having spent 14 years doing estate management, I moved across to the natural capital team in 2021 and I now head up the brokerage side of that business. In short, my job is to help our landowner clients create environmental credits, which I then sell to developers who need to mitigate the environmental impact of their developments. These are typically in the form of Biodiversity Net Gain (BNG) Units, or Nutrient Neutrality Credits and we essentially operate as a match making service between demand and supply. I enjoy the challenge of finding the right solution for the right site and the fact that this work helps to deliver sustainable homes whilst also contributing to nature’s recovery. The natural capital market is nascent and fast moving, which is incredibly exciting. It is satisfying to witness its evolution and contribute in some way to its growth. I’m lucky to be dealing on a daily basis with entrepreneurial people, from landowners to fund managers, from ecologists to promoters and everybody in between. There is certainly a real energy about the people that are involved in this space.
My previous experience in estate management has set me up well for this role. The organisational and people management skills, plus the ability to juggle all the moving parts of a complex business, all translate. If you look upwards in Savills, estate management has been the starting point for many of our senior figures. I’ve moved locations for work several times over the years. I started out in Canterbury then moved to Oxford, but ultimately coming back to my family farm in the south west has always been the dream. I love kite-surfing, so living near the sea is perfect. I find it to be a complete release and one of the only times when my mind is truly off the day job. Being out at sea, totally alone and harnessing the power of the wind is an extraordinary feeling. As with most extreme sports, it requires an element of courage (and perhaps some loose screws) to commit yourself 100% to a jump or trick and land it. You must back yourself and be absolutely all in, which is very much how I approach this role and my career with Savills. It will be interesting to see how the nature markets evolve in the coming years and I’m excited to be a part of such an important new sector for the business.
Eilidh Henderson
Apprentice
“I had no idea what career I wanted to do when I was at school. I liked graphic design, and I liked the idea of working outside, but nothing felt so compelling that I wanted to study it at university – although my school did try to persuade me to. Instead when I left school I went to work in a local restaurant and was there for four years. I worked my way up from waitress to supervisor. Then one day an ad for the Savills Graduate Apprentice scheme flashed up on my phone and I thought it looked interesting. The interview process was really tough, and the first time I applied I did two interviews, but didn’t get offered a place. But I didn’t give up and I applied again the next year and got accepted. That was in 2022.
I am now studying for a BSc in Construction and Built Environment alongside working as a Land Officer obtaining land consents for Savills. The job involves lots of liaison between landowners and developers or their solicitors. At the moment I’m embedded with Scottish Power. I spend two days a week up in Kilmarnock and two in the Savills office in Dumfries. On the fifth day I do my studying. Then for two weeks each term I go to Edinburgh Napier University. Essentially they condense the whole term’s teaching into that two-week block, so it’s quite intense. It’s a four year degree, and I’m sure I’ll stay at Savills when I finish it. Land consents is a growing part of the business, and I’d like to see where it takes me. Savills is a big company and that means loads of opportunities. I’m not a city person, and to be able to live out in the countryside, have an interesting job and play my rugby at the weekends, that will keep me happy.”
+44 (0) 7890 904 573
eilidh.henderson@savills.com
Jamie Wedderspoon
RURAL AGENCY
I graduated into a challenging economic environment and jobs across all sectors were impacted by the “credit crunch”. I committed to finding a job in property and applied to every grad scheme possible and when Savills offered me a job in the Brechin office I jumped at the opportunity. I studied Real Estate at Herriot Watt University, the course was more focused on commercial property, so working in Brechin meant translating my commercial degree to the rural sector and developing a knowledge of the market. Ironically I have a identical twin brother, who is a Director in West End Office Agency for Savills, who studied Agriculture and switched to commercial property. After qualifying as a chartered surveyor, I moved to the Edinburgh office to focus on agency work for farms and estates throughout Scotland. I loved Edinburgh life – it’s a great city to live in, you have the benefits of city living whilst being able to get to the hills or a beach in 30 mins. I got married, had a child and got a dog. Life was looking pretty settled, so when my wife - who’s a vet - got the opportunity to go and work out in the Cayman Islands in 2021, we thought, let’s go and have that adventure knowing that Scotland would always be home.
I secured a job with a property developer on Cayman via connections I’d made at Savills and for just over two years we lived beside the beach in constant sunshine. We enjoyed spending time on the beach with our spaniel Bumble who made the journey with us, scuba diving and travelling around the Caribbean/Central America region. After a hugely rewarding two and half years we made the difficult choice to return to Scotland to be closer to family – the weather certainly wasn’t a contributing factor! Throughout my time at Savills I had some great colleagues and mentors (many who have turned into friends) who I’d kept in regular contact with and it was through these connections that my current role came about. It has been good reintegrating back into Savills life, meeting new colleagues and connecting with old ones. My job is now focussed on expanding the rural agency offering in the north east of Scotland. It’s about increasing our market presence and becoming the agent of choice for sellers.
+44 (0) 7977 729 459
jamie.wedderspoon@savills.com
I graduated into a challenging economic environment and jobs across all sectors were impacted by the “credit crunch”. I committed to finding a job in property and applied to every grad scheme possible and when Savills offered me a job in the Brechin office I jumped at the opportunity. I studied Real Estate at Herriot Watt University, the course was more focused on commercial property, so working in Brechin meant translating my commercial degree to the rural sector and developing a knowledge of the market. Ironically I have a identical twin brother, who is a Director in West End Office Agency for Savills, who studied Agriculture and switched to commercial property. After qualifying as a chartered surveyor, I moved to the Edinburgh office to focus on agency work for farms and estates throughout Scotland. I loved Edinburgh life – it’s a great city to live in, you have the benefits of city living whilst being able to get to the hills or a beach in 30 mins. I got married, had a child and got a dog. Life was looking pretty settled, so when my wife - who’s a vet - got the opportunity to go and work out in the Cayman Islands in 2021, we thought, let’s go and have that adventure knowing that Scotland would always be home. I secured a job with a property developer on Cayman via connections I’d made at Savills and for just over two years we lived beside the beach in constant sunshine. We enjoyed spending time on the beach with our spaniel Bumble who made the journey with us, scuba diving and travelling around the Caribbean/Central America region. After a hugely rewarding two and half years we made the difficult choice to return to Scotland to be closer to family – the weather certainly wasn’t a contributing factor! Throughout my time at Savills I had some great colleagues and mentors (many who have turned into friends) who I’d kept in regular contact with and it was through these connections that my current role came about. It has been good reintegrating back into Savills life, meeting new colleagues and connecting with old ones. My job is now focussed on expanding the rural agency offering in the north east of Scotland. It’s about increasing our market presence and becoming the agent of choice for sellers.
“I had no idea what career I wanted to do when I was at school. I liked graphic design, and I liked the idea of working outside, but nothing felt so compelling that I wanted to study it at university – although my school did try to persuade me to. Instead when I left school I went to work in a local restaurant and was there for four years. I worked my way up from waitress to supervisor. Then one day an ad for the Savills Graduate Apprentice scheme flashed up on my phone and I thought it looked interesting. The interview process was really tough, and the first time I applied I did two interviews, but didn’t get offered a place. But I didn’t give up and I applied again the next year and got accepted. That was in 2022. I am now studying for a BSc in Construction and Built Environment alongside working as a Land Officer obtaining land consents for Savills. The job involves lots of liaison between landowners and developers or their solicitors. At the moment I’m embedded with Scottish Power. I spend two days a week up in Kilmarnock and two in the Savills office in Dumfries. On the fifth day I do my studying. Then for two weeks each term I go to Edinburgh Napier University. Essentially they condense the whole term’s teaching into that two-week block, so it’s quite intense. It’s a four year degree, and I’m sure I’ll stay at Savills when I finish it. Land consents is a growing part of the business, and I’d like to see where it takes me. Savills is a big company and that means loads of opportunities. I’m not a city person, and to be able to live out in the countryside, have an interesting job and play my rugby at the weekends, that will keep me happy.”
Market activity on the up
INVESTing IN POrTUGAL
The 2024 farmland market is underway - what are the early indications?
Relative to last year 15% fewer new potential buyers registered in the first quarter of the year, but the number is more than in 2021 and 2022. Higher supply and fewer buyers offer an opportunity for those in the market to be more selective and prices must reflect the quality of a farm as well as its scale.
England During the first quarter 19,300 acres were publicly marketed in England, which was 43% higher compared with the same period of 2023 and follows on from last year being the first time since 2018 that supply in England exceeded 100,000 acres. “This is partly natural correction after four years of the lowest supply on record,” says Alex Lawson of Savills Rural, “but it also reflects the move away from area support, with landowners who haven’t revised their business models starting to feel the pinch as payment amounts reduce.” Farmers remain keen to buy, especially those with funds from Business Asset Rollover Relief (BARR), alongwith amenity buyers. Alex has also noticed increased interest from institutions and corporations seeking investment vehicles motivated by food security, the environmental, social and governance (ESG) agenda and commercial opportunities around net zero.
RaNGE IN POTENTIAL VALUES "Realistically it’s too early to report on values in detail as so few new transactions have completed. I think it’s fair to say on average they remain pretty much in line with where we left them at the end of last year. However, what is becoming clear is the range in potential values, which are now at the point of differing between parishes depending upon who in the market and what’s on offer. There could be some interesting developments in niche sectors, such as Dutch farmers looking to buy in England in the face of their government reducing intensive livestock farming. This could add competition for quality dairy, pig and poultry units.”
+44 (0) 7967 555 502
alawson@savills.com
ALEX LAWSON
+44 (0) 7807 999 412
echanning@savills.com
EVELYN CHANNING
+44 (0) 7968 550 419
drees@savills.com
DANIEL REES
+35 (0) 3838 781 546
james.butler@savills.ie
JAMES BUTLER
Scotland “Last year the market felt sticky,” says Evelyn Channing of Savills Rural in Scotland, “and at this point 2024 could be similar, both physically (if it doesn’t stop raining) and in sentiment. With the Scottish government yet to reveal the detail of future subsidies it’s hard for farmers to plan and previously more opportunistic buyers are conscious of interest rates.” Opportunities in the UK Consequently, market activity to date has been limited and although last year’s supply of 26,100 acres marked a 7% increase on 2022, it was still 40% less than the pre-Covid five year average. “Sellers are predominantly retirees,” Evelyn says. “We’re just beginning to see signs of people coming under debt pressure, which could lead to more supply.
The market is still influenced by BARR money, but we’ve seen more acquisitions by individuals investing in farmland as a hedge against inheritance tax.” Interestingly, some potential buyers based in Europe quote that they are looking for opportunities in the UK for geo-political reasons. Prime arable values remain at an average of just under £10,000 per acre, although competition can push the very best land to £13,000 per acre. Average arable and lowland pasture land remain stable at £7,000 and £4,500 per acre respectively, but uphill land values have softened by 15–20% as the financial model for commercial tree-planting is revised. “Many planters have realised how much unplanted land they already hold,” Evelyn says, “and there’s a recognition of risk, with changing interest rates, some approvals withheld, the Scottish government’s planting budget slashed by 40%, and 2025’s funding already allocated.”
nORTHERN irELAND The price gap between Northern Ireland and the rest of the UK has narrowed, so fewer sellers are moving away. Average values have increased over the last couple of years, to a broad average of £12,000 per acre. A notable trend is the number of transactions achieving £20,000-plus per acre. These are typically smaller holdings: scale, or the lack of it, is a key factor in the market. The average size of holdings sold is 30 acres, and with less than 1% of Northern Ireland’s farmland offered for sale each year, supply is very limited. “Just one 300-acre farm coming to the market skews the year’s figures,” says James Butler of Savills Ireland.
With volatile inflation emphasising land as a secure tangible asset, James’s forecast is bright: “The market is healthy and consistent. Farmland will remain a sought-after investment and supply will remain limited, underpinning firm prices.”
Wales Rising interest rates slowed the market last summer and autumn and the continued wet weather has been an impediment. “However, viewers are now active,” says Daniel Rees of Savills Rural in Wales, “but the market is price sensitive: we have seen some corrections of 5-10%.” Overall, though, pent-up demand increased values by 23% last year, with grade 3 pasture performing strongest. Good arable and dairy land achieved an average of £8,000-£10,000 per acre, but acquisitive neighbours can push prices to £12,000 per acre.
Last year 15,700 acres were offered in Wales, more than in any year since 2000. So far this year this trend continues with supply up by 34% during the first quarter compared with Q1 2023. Potential buyers tend to be farmers looking to relocate and investors seeking environmental subsidies and renewable energy potential. Scale commands a premium, with demand for holdings of 300-plus acres — enough to use some land for renewables, or for the next generation to start farming alongside an existing agribusiness.
cheshire
AYRSHIRE
Outstanding Grade I listed Jacobean Hall About 101 acres Guide £11.4 million
Click to explore map:
Scale determines price as much as land quality. Farms of 100-plus acres with a good house and buildings are typically bought with non-farming money; ‘turn-key’ farms equipped for contemporary farming methods command a premium. Values for small parcels depend on local interest: disparities can be as much as £5,000 per acre for similar quality land.
Exceptional dairy and arable farm About 302 acres Offers over £4 million
Investing in Portugal
SAVILLS SERVICES
With a government that is putting money and support into agricultural infrastructure, Portugal is a solid option for investors
Overview of Portugal With its Mediterranean climate and supportive government policies, Portugal is a very favourable option for agricultural investors and those wanting to acquire land for farming. It has a strong export market for olive oil, almonds, walnuts, tomatoes and blueberries.
The country’s greatest agricultural success story is the creation of the Alqueva Lake - a reservoir in the south east of the country created by the completion of the Alqueva Dam in 2002. Combined with a wide-reaching irrigation network, it has transformed agriculture in the area, building in climate resilience and improving food security. As a result, farmers have diversified into new crops and had the confidence to invest in new technology that has reduced input costs and increased yields. The lake can hold enough water to irrigate the 170,000ha catchment area for three years even with no rainfall. The opportunities that this large-scale irrigation project has unlocked have attracted many foreign investors, who have acquired and consolidated large holdings, particularly of tree-crop orchards that are often available with professional management and good cash yield generation potential.
What grows where?
Where does Portugal sit in the world rankings of exports?
Where do Portugal's agricultural exports go?
netherlands
Brazil
United Kingdom
Italy
FRANCE
SPAIN
4%
5%
6%
9%
37%
6th
largest exporter of processed tomatos
largest exporter of olive oil
3rd
largest exporter of blueberries
7th
largest exporter of almonds
13th
Last year, almond production in Portugal grew by 20% as newly planted young trees began to bear fruit. As they continue to mature, the harvest will grow and Portugal could become one of the world leader’s in almond production within the next five years.
Tagus basin
Good for: Walnuts, olives, vegetables Bare land value: €20k/ha
ODEMIRA
Good for: Salads, berries Bare land value: €30k/ha
Algarve
Good for: Avocados, citrus, berries, vineyards Bare land value: €75k/ha
Castelo Branco
Good for: Olives Bare land value: €15k/ha
ALqUEVA
Good for: Almonds, olives, reliable water source Bare land value: €30k/ha
COIMBRA
faro
SETúBAL
beja
SANTARÉM
ÉVORA
PORTALEGRE
LISBOA
LEIRIA
Tagus Basin
Alqueva
Odemira
+44 (0) 7890 984 004
jonny.griffiths@savills.com
Jonny Griffiths
International Farmland
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