New father time

At the year’s end Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, is looking forward, very far forward.

Whether your view of Old Father Time is that he hands his watch over to New Baby Time on Hogmanay or you’re of the feeling that, much like the Grim Reaper, the old fellow is a fixed feature who watches over us year-in year-out as the sands of our lives slip through the hourglass, is a matter of cultural education or superstitious belief.

What the Oxford Martin Commission for Future Generations wants us to do is exorcise our habit of short termism and think about the consequences of our actions. When I say us, what I mean are policy makers who are urged in the Commission’s report “Now for the Long Term” which calls for radical thinking in policy and business.

The Oxford Martin School (http://www.oxfordmartin.ox.ac.uk) is an “interdisciplinary research community of over 300 scholars working to address the most pressing global challenges and opportunities of the 21st Century”.

The Commission’s latest report has ideas about transforming the way governments and corporates go about their business. But the ideas are not founded on wishy-washy sentimentalism. How could it be? The international brains of the commission are chaired by the former director general of the World Trade Organisation, Pascal Lamy who only left that post in September.

The report identifies megatrends - demographics, social mobility and technology to name but three - that are shaping the 21st Century. A century which, the founder of the School Dr James Martin, says could be our best or our worst ever.

These megatrends are, by default, drivers of change and our institutions need to update themselves or become obsolete.

Business and financial systems come in for criticism for short termism. The sector is urged in the report to re-wire itself for long term investment as opposed to slavishly following quarterly reporting cycles.

Interestingly, on the day Pascal Lamy was fulfilling his media commitments about the launch of the Commission’s report, news broke of the departure from Invesco Perpetual of one of the biggest stars of fund management. Neil Woodford said his decision to leave his role managing a £24.6 billion fund and co-managing another of £6.4 billion was based on where he sees long term opportunities in his industry.

Monsieur Lamy pointed out to one interviewer that the news media seemed to be frightened by the long term too. In a time of rolling 24-hour news schedules to fill, it’s no wonder many journalists and producers look to the brevity and immediacy of Twitter and other social media platforms for news and views to source or reinforce a story or even report social media activity as news in itself. There’s a lot of air time to fill and our attention span appears to be ever-shortening.

Pascal Lamy pointed to a couple of examples where business and policy makers had come together to think about the long term with staggering success achieved in a relatively short space of time. Namely, anticipation of Y2K technology meltdown in the year 2000 and also in setting minds to tackling HIV-AIDS in the late 1980s and 1990s.

It seems fitting to quote Marx here: Groucho Marx. “Why should I care about future generations – what have they ever done for me?” But it seems that the Oxford Martin Commission’s view is that in thinking about future generations, we could actually do ourselves a favour right now.

Will Mooney MRICS
Partner
Commercial, Cambridge

Government modulation - hot topic of debate

Until 2005, I thought modulation was a musical expression referring to a change in pitch or tone, but as is so often the case in the context of “EU diplomatic speak” this word popped up with quite another meaning when the CAP was last reformed in 2005. Its new meaning is basically a “tax” to be taken off one payment and added to another and in recent weeks this has become a hot topic of debate.

Under the forthcoming CAP reforms which are due to take effect in 2015, the government is proposing to modulate or effectively tax the payments due to be received by farmers by 15%. Farmers and farm leaders are not impressed and are urging government to reduce modulation to a much lower rate of 9%.

The reason for the argument is that the funds received from the EU to support farmers and the wider rural economy come under two funding streams or “pillars”; pillar one providing direct payments to farmers and pillar two providing wider rural economy payments.

Historically the UK has always had low pillar 2 funds compared to the rest of the EU, which at least in part stems back to the budget rebate negotiated by Margaret Thatcher in 1984. As a result when subsequent governments have wanted to increase funding for the wider rural economy they have effectively “taxed” or “modulated” the pillar 1 pot to supplement the pillar 2 pot.

Most recently one of the primary drivers for such modulation was to fund the environmental stewardship schemes which have been introduced widely throughout England and it is understood that around 70% of the farmland in England now falls within one scheme or another. However, in addition to the environmental schemes, pillar 2 funds have been used to fund a whole raft of measures in the wider rural economy varying from “knowledge transfer” schemes to helping fund small start up businesses.

My experience with the latter schemes in particular is that although they do have some merit, by the time it has taken the relevant authorities to develop the rules and implement the schemes, it often means it takes many years for the modulated funds to reach their ultimate destination. In these economically difficult times, such delays could be very damaging and therefore, although I would support the continued funding of the existing environmental schemes, I would suggest that increasing the money being fed in to pillar 2 funds at the expense of direct payments to farmers would be a bad idea.

To put it simply, paying funds direct to farmers and landowners will be a much quicker and more effective way of getting financial support out of the EU in to the our rural economy than would be the case if we invented a whole raft of new schemes with their associated rules and bureaucracy to reallocate the same funds, on occasions to exactly the same people, but often several years later than would otherwise have been the case.

It is appreciated conservation organisations in particular will disagree with this but it also has to be appreciated that like farmers they receive significant funds from the CAP in one form or another. It is understandable that they would like to see more funds directed to conservation but equally, many such organisations will have experienced the cash flow problems that occur when new schemes are introduced with the resultant delay in receipt of funds. Thus, in my view supporting a continuation of the existing environmental schemes as suggested by farm leaders rather than an expansion of pillar 2 funding as suggested by government is the most sensible approach in these uncertain economic conditions.

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

The Rural Payments Agency

The Rural Payments Agency (RPA) has reported that it has successfully paid Single Payments to 95,600 farmers in England on the first day of the payment window being 2nd December this year. This is the best the RPA has ever achieved since the Single Payment Scheme was introduced in 2005 and it is a far cry from the chaos and delays which were experienced by many farmers in the early years of the scheme.

Indeed the payments made on 2nd December exceed the RPA’s own payment targets, which is good news for farmers, many of whom in the livestock sector in particular are still reliant on these subsidies in order to make a profit.

However, there is a concern that with the forthcoming reform of the CAP which will come in to force in 2015 that the RPA does not take its eye off the ball. It is imperative the RPA makes sure that as far as possible the progress that has been made in recent years is not squandered when the new scheme is introduced.

There is hope that the new scheme will be easier to administer because the government has sensibly decided to roll over the existing “entitlements” in to the new scheme. This will mean farmers will not have to go through a fresh registration process under the new scheme but there will no doubt be many other complications which may have the potential to cause problems.

The entitlements are important because in order to claim the area based support payments under the Single Payment Scheme and the new successor scheme, farmers need to match the number of entitlements they hold with an equivalent area of qualifying farmland. Therefore, as a result of the decision to roll over existing entitlements in to the new scheme, the value of entitlements has appreciated from around £200/entitlement to around £300/entitlement because there is now certainty that they will be around until 2020 which is when the CAP will next come under review.

Accordingly, those farmers with spare entitlements may consider selling them sooner rather than later because under the new scheme it is understood that any entitlements which are not claimed in 2015 will be confiscated without compensation. These entitlements will be put in to the National Reserve for distribution to other claimants, the rules for which are as yet unknown.

Further, any claimants with less than 5 hectares of land will no longer be allowed to claim in the new scheme which means they may wish to offload their entitlements now even though this would preclude them from making a claim in 2014.

So, it seems just as the RPA have got to grips with the existing Single Payment Scheme after 9 years of trying, there is a danger things could go awry as a new scheme is introduced in 2015. However, I hope the roll over of entitlements will make this process much more manageable than it was in 2005 although that does not mean to say the RPA or farmers should be complacent. The new scheme will present both opportunities for some and dangers for others and farmers will need to keep abreast of developments as the detail of the new scheme rules start to emerge over the coming months.

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

Carter Jonas' Energy Index

The Energy Index 2013 has just been published by Carter Jonas’ research team and I think this will make interesting reading to farmers, landowners and anyone with a general interest in the subject of onshore renewable energy technology.

The report gives a brief over view of the five principal technologies which are anaerobic digestion, biomass heating, solar photovoltaics, hydroelectric power and wind and then analyses how they perform against a variety of measures. These include efficiency, cost of installation, annual operating costs, development timeframe, planning risk and the financial support mechanism of each technology type.

The key objective of the index is to rank the various technologies against the various measures to help landowners and farmers through the difficult decision making process as to which technology may be the most suitable for them to pursue. Clearly the physical characteristics of every site are different and these will often be the most significant factors guiding a landowner as to what opportunities may be available but I would suggest this index will be of interest to anyone who is at the start of this thought process.

The energy sector is clearly high on the political agenda and at the time of writing we await an anticipated announcement in Chancellor’s autumn statement on potential changes to the manner in which green levies are to be raised in order to fund renewable energy developments. Clearly if these changes result in significant cuts in the subsidies which are paid to encourage certain types of renewable developments this could have a significant impact on the viability of certain technologies.

Having said that, the renewable energy sector and its costs of development and pricing structure are already changing; there are a number changes to the financial support mechanism which are in the pipeline and forthcoming government announcements may result in further changes. It is uncertainties such as this which last week saw the shock announcement that RWE Innogy has decided to cancel the proposed development of the so called “Atlantic Array” which was planned to be a 240 turbine wind farm located off the North Devon Coast.

In light of this volatility it is Carter Jonas’ intention to update their Index on an annual basis although will be worth keeping in close contact with their energy team to ensure you keep abreast of changes as they happen because waiting a year for an update in this fast moving industry will be too late.

Anyone interested in receiving a copy of the index should contact James Stephen on james.stephen@carterjonas.co.uk or they can download a copy from the Carter Jonas website: www.carterjonas.co.uk

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

Obscure court case causing problems

A seemingly obscure case in the Court of Appeal is proving a headache for politicians and could be a problem for some residential landlords.

A seemingly obscure case in the Court of Appeal is proving a headache for politicians and could be a problem for some residential landlords.

The effect of the ‘Superstrike’ case, the name of one of the parties involved, could have far reaching effects for landlords who have had the same tenants in a property since before deposit protection legislation came into effect in April, 2007.

In Superstrike, what’s known as a Section 21 notice was served to evict the tenant but the move failed because the tenancy dated from January, 2007, and then continued in 2008 under what the appeal court determined was a separate statutory periodic tenancy.

The court ruled that this in effect created a new tenancy but the deposit had not been protected with a tenancy deposit scheme so the landlord was prohibited from obtaining the eviction order. However, politicians say this was not the outcome intended when legislation was drafted and they are now looking at how to correct the anomaly.

In the meantime, landlords who have not protected deposits need to do so using one of the approved schemes. They are obliged to serve the tenant with what’s called Prescribed Information and the scheme leaflet for the tenancy deposit organisation they use.

There are various options to overcome the situation and every landlord needs to be confident that they are in the right position individually with regard to deposit protection and also be aware that further court rulings or legislative amendments from Government could further affect their position.

 

For further information; ‘Likely Implications of Tenancy Deposit Protection Case Superstrike Ltd v Marino Rodrigues’, has been produced in collaboration between the industry bodies ALA, BPF, NALS, NLA, RLA RICS and UKALA.

I will happily point landlords in the right direction for the advice they need and in some instances may recommend that the deposit is returned to the Tenants prior to serving a Section 21 notice.

Lisa Simon, 
Partner
Head of Residential Lettings, Mayfair
T: 020 7493 0676
E: lisa.simon@carterjonas.co.uk

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

A con that can legally steal your house

It can happen. Section 58 of the Land Registration Act 2002 provides that if a person is listed as the proprietor of a legal estate with HM Land Registry it is conclusive evidence of ownership.

Imagine losing your house after it was effectively stolen because the law favours a third party.

Case law (Barclays Bank plc v Guy 2008) dictates that while the rightful owner can restore his or her name as owner, if the mortgage was granted through the lender relying on indisputable title, albeit one effectively stolen, the mortgage charge remains and must be repaid.

Worse still, if the house had been sold to a third party everything would be lost.

The case law involved a house where a tenant registered the title fraudulently and used it to obtain a mortgage from Barclays. The owner wanted complete ownership of his house returned but only managed to re-register the title. Barclays kept its charge on the property so the money would have to be repaid when the house was sold – unless the fraudster could be found with the money.

You can prevent becoming a victim by popping in the post a simple form ‘COG1’ (Up-dating Registered Owners’ contact address) with evidence of identity. It tells HM Land Registry to amend the record for your property to provide your current address for correspondence. You post the form with evidence of your identity and its job done.

For more information visit the Land Registry website

Lisa Simon, Partner
Head of Residential Lettings, Mayfair
T: 020 7493 0676
E: lisa.simon@carterjonas.co.uk

An HS2 update

HS2 - the rail infrastructure project which will provide direct, high capacity, high speed links between London, Birmingham, Leeds and Manchester. With the exception of London, these city destinations and the route of HS2 are nowhere near the eastern region.

Yet, apparently in furore and froth with which KPMG’s report was greeted by the media across a recent weekend after the BBC made its Freedom of Information (FoI) request, HS2 means we might lose out in the whole of Cambridgeshire to the tune of £253 million according to some local press reports and south Essex by £151 million. In Cambridge city alone, it could be as much as £127 million.

Further north but still in the east; in fact the UK’s most northerly eastern city, Aberdeen – dubbed Europe’s renewable energy capital – can expect a drop in economic output by £220 million because of HS2.

Really? I doubt businesses in the granite city are concerned as the city’s residential and commercial property markets are buzzing as the year draws to its close.

Those unfamiliar with the sophistry of accountancy have no reason to doubt the statistical robustness of the reported figures. It’s the linguistic rigour that’s bothersome. Because those cities, towns and locations were ‘set to lose’ ‘could lose out’ ‘potentially reaching losses’.

It’s bothersome because it’s just distracting and sensational. It’s doubtful that commercial interests considering investing in our region are not going to do so now because of the open publication of the KPMG report. But it is possible that HS2 deflects future investment from the eastern region to the Midlands and the North West.

Possible but unlikely.

It’s hard to argue that investment interests here already or those which will come to this region can find what they are looking for in Birmingham, Leeds or Manchester. If they could they’d be there already, surely? And if they do head west and north, others are sure to fill the void because success attracts and breeds further success.

I should’ve been upfront at the outset: my firm has been awarded a place on HS2 Ltd's framework agreement for professional services relating to land and property. But I have yet to be snubbed for this by peers and clients in the east of the country since the KPMG report went public and, with the round of year end social dos in the horizon, I anticipate as full a diary as ever.

Will Mooney MRICS
Partner
Commercial, Cambridge

The Common Agricultural Policy is yet again being reformed

As many readers may be aware the Common Agricultural Policy (CAP) is yet again being reformed. In theory the new regime should have come in to force on 1st January this year, but as with all things “European” nothing is straightforward when you need to get 27 member states to agree on anything, let alone a far reaching and complicated reform of the agricultural subsidy regime stretching from Finland in the North to Greece in the South and Portugal in the West to Bulgaria in the East.

However in June this year the EU Agriculture Ministers agreed the principles for the next reform package which is due to start on 1st January 2015. As a result the old regime has had to be rolled forward for 2013 and 2014, which in itself poses problems, while the detail concerning the new regime continues to be hammered out at both a European and member state level.

As you can imagine this is a fearfully complicated system but as part of this regime, our government, in the form of DEFRA has just published its consultation package for England. The government is inviting people to make their opinion known on a whole variety of issues and a couple of the most important questions I have identified are:

1. How much money should be diverted from direct payments for farmers (Pillar 1) to Rural Development funds (Pillar 2). The government favours 15% to be diverted from Pillar 1 to Pillar 2 which is the maximum allowed by the EU but now is your chance to make your view known.

2. Should we redistribute the Pillar 1 support to farmers in favour of upland farmers at the expense of lowland farmers. There appears to be a general under current of support for this proposal because only a relatively small reduction in payments to lowland farmers would make a significant difference to upland farmers. However, as most lowland livestock farmers still rely on subsidy payments to make a profit, unlike arable farmers, there may well be a difference of opinion on this matter within the lowland farming community – again now is your chance to voice your opinion.

Within the consultation paper the government has also made a number of important decisions, the most significant of which for farmers here in mid-Somerset is that the existing regime of entitlements will be rolled forward in to the new scheme.

"This is a very important point because farmers will not have to apply for new entitlements under the new system as they did when the current scheme was introduced in 2005. This application process caused a massive administrative headache which took years to sort out. The practical effect of this is that the introduction of the new Basic Payment Scheme (BPS) as it will be known, should be much more straightforward when it comes in to force in 2015. But, another side effect of this is that the capital value of existing “entitlements” is likely to rise to reflect the fact that they will now be around until at least 2020 rather than potentially being phased out at the end of 2014.

The timescales for the introduction of the CAP reform package are very tight indeed and as a result the government needs to report back to the EU on the latest consultation by 31st December this year so if you want to make your views known, now is your chance and so I suggest you download the DEFRA consultation document and get consulting.

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

Producing Renewable Energy From Waste

Interest in Anaerobic Digestion (AD) as a means of producing renewable energy from waste – usually methane, which can either be burnt to generate electricity or put directly in to the grid as gas – has increased.

This is exemplified locally by the new AD plant which has been set up by local cheese producers, Wyke Farms near Bruton. This has represented a huge investment in both time and money. The facility has cost £4m and has taken five years to plan and construct. It consists of three 4,600 cubic metre digester vessels which digest cow slurry, pig slurry, rape straw and “whey permeate” from the cheese making facility. The German technology is capable of converting 75,000 tonnes of biodegradable waste each year.

Richard Clothier, who is the managing director and third generation family member at Wyke Farms, said: “We aim to operate our business in a way that has minimal impact on the Somerset environment, and create a truly symbiotic relationship with the countryside.

“We’re committed to energy efficiency and we’re proud to be one of the first national food brands to be self-sufficient.

“Sustainability and environmental issues are increasing in importance to each and every consumer in the UK and green energy makes both emotional and practical sense.”

Mr Clothier said the plant “simply creates a cycle - we can now take the cow waste, which has inherently been a problem, and turn it into pure, clean, energy to drive all our own needs and more. This, in turn, leaves a natural fertiliser that we can plough back into the land to invest in the future health and wellbeing of our cattle – and so the cycle starts again.”

Clearly the Clothier family believe in the importance of sustainability and have realised that this is becoming of increasing importance to us all, hence their major investment, however not all farmers have been prepared or are able to take this “leap of faith”.

The potential for the use of on-farm AD has been recognised for some years but in general it is only a few large plants which have been set up. As a consequence DEFRA has recently announced it has established an “On-Farm AD Fund” to reduce financial barriers to the development of small scale on-farm anaerobic digesters in England. The Fund is to be administered by the Waste & Resources Action Programme (WRAP) which itself was established as an independent not-for-profit company limited by guarantee in 2000.

It is believed the fund will provide:

• Grants of up to £10,000 to prepare business plans and feasibility studies for AD units.

• Loans of up to £400,000 (or a maximum of 50% of the cost) for constructing an AD unit.

To qualify for access to the fund it is believed various conditions will be applied which include:

• The farm must “have access to manures and slurries” – but it is not clear to what extent these will have to be used in the AD plant.<br />
• The maximum size of the AD unit will be 250kW.

• A business plan must have been prepared before a loan can be applied for.

• Loans will be available from early 2014, although no exact date has been given.

• No details about the term of the loan or interest rates has yet been released.

At this stage it is not clear how much money will be available or how useful this fund may be but if anyone should have any initial enquires they should contact local Renewable Energy expert Thomas Ireland via email. 

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

Wells Food Festival

The inaugural Wells Food Festival certainly brought a buzz to Wells last Sunday with the market place packed with stalls and visitors tasting and purchasing the various artisan foods on offer. But of particular interest to me was the debate which was held at the Bishop’s Barn entitled “Milk Matters” and if the turnout is anything to go by the general consensus is that it does.

Over 100 people packed in to the Barn to listen to the debate which was preceded by a blind tasting of 6 different samples of milk which varied from UHT and pasteurised supermarket milk to unpasteurised Guernsey milk. Everyone had an opportunity to taste and vote for their favourite milk and in the end it was the pasteurised Jersey milk from Ivy House Farm, Beckington near Frome which was voted the audience’s favourite. This was fitting because Geoff Bowles of Ivy House Farm, stood in at the last minute for one of the panellists who was unable to attend the debate.

The debate itself was interesting, chaired by environmentalist Chris Banes with dairy farming panellists, in addition to Geoff Bowles, including Ruth Kimber from Charlton Musgrove, David Cotton from West Bradley, Judith Freene from Pilton and Steve Hook from Sussex.

Each panellist told the audience about their experiences in dairy farming including the opportunities and challenges they face in their own businesses. David Cotton, a 4th generation dairy farmer explained about milk production from the perspective of a mainstream dairy farmer, where he regards himself as the primary producer, selling his milk to a processor who will then process the milk to bring it to the market, whether that be liquid milk, butter, cream or cheese.

Ruth Kimber, similarly sells most of their milk to Wyke Farms who turn it in to farmhouse cheese, while the other panellists explained how they have taken the processing and marketing of their milk in to their own hands so as to take advantage of niche markets, bringing them closer to the customer and thereby gaining premium prices for their milk products.

Judith Freene of Brown Cow Organics explained how she moved in to yoghurt production in response to the slump in organic milk price some years ago, which alongside their other products has proved a great success. Geoff Bowles also explained his story of how, when his farm was cut in half by a new road in 1983, his family decided to process their own milk in order to survive, initially driving to London to sell milk in premium outlets and subsequently supplying customers direct and via a wide range of small retail outlets.

Similarly Steve Hook, who is featured in a documentary film about his farm, called the Moo Man, explained how he decided to sell raw, unpasteurised organic milk to the public and how he has tapped in to a niche market where he is able to command a price of up to £2/pint, as compared to the lowest price I could find on the Tesco website which was 25p/pint.

This perhaps explains the dilemma many dairy farmers find themselves in; they either have to find a niche market which usually involves processing their own milk and selling their product direct to the customer or through outlets where they can achieve a premium price or, as in the case of David Cotton and the vast majority of dairy farmers, they have to become as efficient as they possibly can to survive the highly competitive retail market dominated by the supermarkets.

Herein lies the crux of the problem facing many dairy farmers; do they go niche or remain primary producers of a commodity. Either way it is hard work, often requiring significant investment with loans which will have to be paid off by the next generation. This is why many dairy farmers, especially those without successors, continue to leave the industry; there are currently less than 15,000 left in the UK, a number which has halved over the last 15 years.

Accordingly, what came over very clearly to me was that there is one concern which cuts across niche and commodity producers alike and that is the need to attract the next generation in to dairy farming, whether that be to take on the family farm or to work for others as a herdsmen or other skilled workers. But in all instances the financial viability of the dairy business is the key in order to be able to pay such staff a competitive wage to enable them to live in the countryside which is valued by so many and which has been shaped by dairy farmers over the centuries.

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

Carter Jonas enters The ESTAS Awards 2014

Our Residential Letting branches have entered the Estate & Letting Agent Awards.  http://www.theestas.com/ The scheme recognises the best agents based on research conducted through Landlords around the UK. The awards, known as the ESTAS measures the quality of customer service provided by agents through the rental process.

I am very pro these awards as they give our Clients the opportunity to provide feedback to us.

Phil Spencer, TV Property Expert says “I think it says a great deal about company who’s prepared to stand up and announce to customers and competitors that they believe in providing the best possible service and they’re happy to prove it.

These awards help agencies to focus on customer service levels and that’s why so many sign up each year” “Taking part in the ESTAS sets agents apart from their competitors. It sends a clear message that they are passionate about customer service, prepared to go that extra mile for their clients and keen to listen to feedback”.

Lisa Simon, Partner
Head of Residential Lettings, Mayfair
T: 020 7493 0676
E: lisa.simon@carterjonas.co.uk

400ha of Productive Farmland Destroyed

Following the recent launch of a relief fund to help raise money to fund the dredging of rivers on the Somerset Levels to help prevent a repeat of the 2012 flooding, many farmers are furious about the destruction of more than 400ha of productive farmland near Bridgwater.

The land has been acquired by the Environment Agency (EA) in a bid to create a huge new expanse of salt marsh and associated wetland habitat which will be managed by the Wildfowl and Wetlands Trust. It is believed this project has cost in the order of £20m and it is this and the fact good quality farmland has been destroyed which is getting farmers angry.

The land is located on the Steart Peninsula, at the mouth of the River Parrett where it enters Bridgwater Bay. Much engineering work has taken place over the last 18 months or so in order to transform it from an area of farmland to an area of low lying lagoons and creeks. Once the sea wall is breached to allow flooding at high tide, it is anticipated that over a period of time the land will develop in to a huge new area of salt marsh.

"The EA claims it doesn't have the money to spend on river maintenance, and yet farmers on the Somerset Levels pay levies for that maintenance," said James Small, Somerset NFU chairman. "At the same time, they see vast sums being spent on destroying farmland for habitat creation at Steart.

"The EA has a not-inconsiderable budget, and one of its mission statements is to protect the natural and working environment," he added. "It all comes down to priorities, and if the government was serious about protecting farmland and businesses it would just take a tweak in policy to reflect what people really want on the ground."

However, the EA have explained that the Steart project is being delivered to meet the government’s responsibilities under the EU Habitats Directive and failure to create such new habitat to offset the loss from rising sea levels would trigger large fines by the EU. "Some people don't like the project, but we have a legal obligation to create this new habitat," he said.

So it seems it is EU law and the government’s need to comply with it that is creating paradoxical situation where the EA does not have enough money to carry out routine dredging of rivers on the Somerset levels and yet within 10 miles the same organisation is spending around £20m to flood otherwise productive farmland. All I can say is that I think farmers affected by flooding on the levels will find this situation extremely difficult to understand.

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

The 2013 Dairy Show

Last week the eyes of the UK’s dairy industry were focused on the Bath and West Showground where the 2013 Dairy Show was held on 2nd October. This year the show was sponsored by Micron Bio Systems and Pearce Seeds Ltd whose support was much appreciated by all because it turned out to be yet another excellent event.

I have been attending the Dairy Show for over 20 years and I have to say it has become a highlight in my calendar because it consistently attracts high quality livestock entries and visitors from across the country who, this year were able to view over 310 trade exhibitors displaying all manner of products and services.

This year the show attracted over 6,600 visitors and because the vast majority of these are either committed dairy farmers or people closely involved in the industry, it also attracts a wide variety of quality exhibitors all keen to be involved in the long term future of the dairy industry.

I suppose the most significant feature I noticed this year was the number of dairy farmers who are now seriously considering installing robotic milking machines. Lely, one of the robotic milking machine manufacturers certainly had a significant presence at the show.

Having discussed this with a number of farmers who came to our stand it seems that for smaller family farms in particular the use of robotic milking machines is a real prospect. It saves the cost of expensive labour and frees up time for the farmer to do other things rather than standing in the milking parlour for 6 hours or more a day.

The same does not necessarily seem to be the case for larger units where the farmer/owner is probably not physically milking the cows himself anyway, but what is clear is that technology in the dairy industry is becoming ever more important and those who do not embrace it in one form or another are likely to struggle in the long term. As with all industries one cannot let one’s business stand still for a moment but the problem facing many is that investment costs money and it seems for some that the profits are not there to allow for this.

This was highlighted by a press release from Old Mill Accountants whose head office is in Wells. They explained that figures from their client base showed that the average dairy farmer lost over 1p/litre last year. However, what I think is very telling is that their best dairy clients were producing milk for an incredible 12.65p/litre less than the worst. Herein lies a tale in that it seems to me some farmers have been able to control costs and it is the close control of costs, not just the headline milk price which defines the difference between success and failure in the dairy industry.

But what attracts many to the event is simply to see the best livestock on show and this year saw the closest ever competition with a Holstein and Ayrshire cow being tied equal for the coveted Supreme Champion. They were finally separated by bringing in an additional judge who awarded the title to the nine year old Ayrshire Sandyford Fable, owned by ED Tomlinson & Son of Loughborough and Reserve Champion went to the Holstein Moorshard Lennon Rosa, owned by RK & FG Miller & Sons of Bridgwater.

So all in all it was another excellent day for all who attended and Show Manager Alan Lyons said "It was a great show, with large volumes of visitors flowing through the gate. The quality and increase of both the trade stands and the cattle were extremely high which bodes well for the future of this popular show in the agricultural year."

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

Update on the CB1 Development

‘Change is usually sad, but it is dangerous to live too much in the past, and to overstate the past at the expense of the future.’ Graham Dawbarn, architect (1893-1976).

By way of a counterpoint to criticism of new buildings in Cambridge, Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, shakes his pom-poms to cheerlead the new.

The quote, courtesy of The Twentieth Century Society website (www.c20society.org.uk), was made in 1956 by the architect in response to opposition to redevelopment plans for Imperial College which meant the demolition of the Victorian Institute in South Kensington.

Also on the Society’s website is an authored piece which describes the New Museums Site on Pembroke Street in Cambridge as “….Cambridge’s most elating piece of Brutalism.” Brutalism is a positive reference in this context and refers to a style of post-1945 architecture The New Museums Site was built between 1966 and 1974 and, in the University’s current plans for redeveloping this campus, it has engaged a heritage planning consultant.

If you’ve been living or working in Cambridge for as long as I have, you might still refer to various locations in the city which have been modernised by their old, pre-development names. If not all the time, then it’s often useful explaining the locations to fellow, old Cantabrigians who are not so involved in the property and development scene in the city. Christ’s Lane as Bradwell’s Court and the Cambridge Leisure Park as the Cattle Market.

It’s a decade since the old cattle market site was redeveloped as Cambridge Leisure Park. It’s almost unforgivable for us property people to make these venial vocabulary slips. Especially if we’ve been involved in the deals like I was in securing the Leisure Park for Travelodge. Ten years on and I’ve been involved in the deal which has seen another Travelodge open this past summer as part of the Eastern Gateway redevelopment of the city.

While people might not like the specific architectural design of the buildings themselves in the locations I’ve referenced here, it would be a strange view indeed, if people preferred to retain the dilapidated buildings or derelict sites of these locations before their redevelopment.

The cb1 development will ensure the city’s railway station will no longer be the disappointment it must have been to many on first arrival. It will be a fitting complement to the impressive King’s Cross/St Pancras redevelopment from where many visitors will have boarded the train to Cambridge.

The planning application’s lodged for a second railway station to the north of the city and not before time if you’re arriving in Cambridge by train and expecting to do business at its influential science and business parks.

And it’s commerce which is driving these new developments. It’s the same commercial forces which have fostered economic prosperity in the city at a time of recession.

A recently published book called “Hideous Cambridge: a city mutilated” sees its author and city resident, David Jones take a light-hearted but critical swipe at what he sees as the city’s ugliest buildings - which are also some of its newest.

This is some of the very property offering in the city – whether that’s commercial or residential – which struggles to keep pace with demand so the developers must be doing something right. It’s in not developers’ commercial interest to build something nobody wants to live or work in.

To my mind, Cambridge is, at last, beginning to look like the modern city it is. Change can be sad and, in this city, change certainly doesn’t go unchallenged.

In any location, the changes in skyline and at street level brought about by new buildings and development are of their time now as much as these things always are. I am sure The Twenty First Century Society will agree.

Will Mooney MRICS
Partner
Commercial, Cambridge

It's Been Hot Town Summer in The City

There was no summer slouching on the development front in Cambridge.

In fact, the locations of many of the buildings are contributing to creating new frontiers in the city’s expansion or, at least, new gateways.

The remodelling of the city’s Newmarket Road spine is forging ahead with the new 219-bed Travelodge opened last month (August) as part of the vision for the Eastern Gateway and work on the new Premier Inn is underway here too. The Travelodge is financed and owned by the Charities Property Fund – whose investor base includes substantial representation by the Cambridge colleges - and, on the occasion of the opening, the Fund referenced the value of such a freehold interest in a ‘development constrained centre such as Cambridge’.

The early part of the summer saw the ceremonial ground-breaking at another new frontier in the city with work-on site well underway on Phase 1 of North West Cambridge. This £1 billion development by the University of Cambridge will eventually see a 150 hectare mixed-use development on land around the Huntingdon Road and Madingley Road routes.

The University also moved forward on its preparation of proposals for the redevelopment of its New Museums Site campus on Pembroke Street in the heart of the city.

Also in the historic core of the city, on Trumpington Street, The Cambridge Judge Business School – previously known as the Judge Institute of Management Studies – appointed a project team to advise on proposals for its £30 million expansion project.

As the summer really hotted-up in July, the planning application was submitted for the city’s second railway station. Known as Cambridge Science Park Railway Station, the transport interchange will form an integral part of the redevelopment of Cambridge’s northern fringe which is envisaged will see the creation of new, high quality B1 commercial space complementing the existing business and science park locations in this part of the city.

And speaking of this part of the city, July also saw the announcement of outline planning permission being granted for three plots of Phase VI at the Cambridge Science Park which, in total, will add 13,800 sq m of brand new office and research & development space in this internationally renowned location.

Over at Cambridge’s first railway station, developer Brookgate is working to bring forward one of the next phases of CB1: numbers 50 & 60 Station Road. Spread over eight floors, 50 Station Road will give 62, 840 sq ft and 60 Station Road will be a significant 68, 254 sq ft of much-needed, Grade A accommodation in the centre of this world-class city.

News recently of AstraZeneca increasing its requirement at the Cambridge Biomedical Campus on the Addenbrooke’s site to 800,000 sq ft from the earlier figure of 650,000 sq ft.

Institutional investors, financiers and developers are doing what they can to maximise the property potential in the city’s ‘development constrained centre’ and its outer fringes.

Hot town summer in the city, indeed. Despite the past summer’s heat, it’s been alright for those of us with development and property interests here.

Will Mooney MRICS
Partner
Commercial, Cambridge

Campaign Launched to Prevent Future Flooding

The flooding of 2012 may be a distant memory for some but it still haunts many farmers and landowners on the Somerset Levels who were so badly affected; finding their land immersed deep under water for months on end.

Farmers maintain the problem has been caused primarily by the Environment Agency failing to dredge the rivers. It is estimated this has reduced the carrying capacity of some of the major rivers such as the Parrett by as much as 40% which has resulted in flooding.

As a consequence a campaign has been launched to raise £4m to prevent future flooding on the levels. Michael Eavis launched the campaign last week at Burrowbridge, near the site of some of the worst flooding which lead to the closure of the A361 to Taunton for many weeks during wettest periods of 2012 and early 2013.

Michael Eavis explained, "They used to have half a dozen drag lines that would be going throughout the winter. It should be so simple to introduce a system that works but it's all been an absolute shambles. Unfortunately the maintenance of the Levels has been an example of central government interference, when it should have been left to the people who know what they are doing. One of the benefits of dredging is that you build up the banks at the same time so it's a double whammy effect."

The campaign, which has been organised by the Royal Bath and West of England Society, is aimed at raising the funds required to start dredging works as soon as possible. Edwin White, from Easton near Wells, speaking in behalf of the Society said, "This situation has been allowed to develop over the last 10 or 15 years and now it's reached a head with heavy rains of 2011 and 2012.”

To date the Environment Agency has pledged £300,000 towards the fund which seems to be tacit acceptance that dredging will help the problem. This is despite the fact they maintain dredging is not the long term solution although I am not clear what they think is the solution unless they consider allowing the levels to flood is acceptable.

The Wessex Regional Flood and Coastal Committee and Somerset County Council have also pledged the same amount as the Environment Agency. Thus the fund has been pump primed with some significant sums of public money but is appears to me that there is still a very long way to go. Whether there is an appetite from individuals and the private sector more widely to make the significant donations which will be required to hit the target is in my mind open to question.

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

Dairy Farmers Feeling Frustrated

Many dairy farmers are yet again feeling frustrated that they do not seem to be receiving a fair share of the profit which is being generated from the milk they produce as a consequence of the high world market prices for milk products.

As a result “Farmers for action” (FFA) held a blockade on 5th September at the Morrisons supermarket distribution centre near the Bridgwater junction on the M5. About 100 farmers were involved and FFA chairman, David Handley handed over a letter addressed to Morrisons’ chief executive explaining why the farmers felt the need to act.

Mr Handley explained that, "The reason that farming families had turned up was very simple; most dairy farmers over the past three months have seen no milk price increases despite the fact that global markets are at an all time high. Last year, it was agreed by all parties in the dairy chain that dairy farmers who have to take the lows in the market place should also benefit from the highs."

FFA is demanding that major processors and supermarkets work together to raise the milk price to a minimum of 33p/litre, but preferably 35p/litre across the board so farmers can make a "bit of profit". FFA estimate the average price being paid to farmers for their milk is 31p/litre but some are receiving as little as 27-28p/litre at which level they will be making significant losses.

A Morrisons spokesman said: "We buy the milk sold in our stores directly from a processor, who sets the price received by the farmer for each litre they produce. The increases we have made in the amount we pay to processors since last summer have resulted in a rise of more than 4p/litre for farmers, bringing milk prices to their highest level in recent years."

This is indeed true but even at these high prices farmers are only receiving a milk price which is equivalent to that which they were receiving in 1992 if inflation is taken in to account. I think it is generally agreed by independent analysts that the increase in world commodity prices has not been properly reflected in the price farmers are receiving, but there is disagreement as to how best a fair increase can be achieved.

The NFU for example is not supporting the protests because they think the matter is best dealt with by negotiation between processors, supermarkets and farmers. As far as I can see, one of the difficulties is that because there are so many different contracts offered by the various milk purchasers, it is difficult to get to the bottom of what is really happening. For instance Dairy Crest announced last week that its “formula contract “price is set to increase by 0.153p/litre to 32.082p/litre from 1 October which will be 0.693p/litre ahead of their standard liquid milk price.

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

Forward Guidance and its Feel Better Factor

Compass pointing straight ahead, Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, reckons UK plc is more than ready to see where a new road map will take us.

With his dashing good looks which, I am reliably informed by one who should know, can cause a collective Twitter swoon when he’s on the television, the new Governor of the Bank of England appears to have become the poster- boy and superstar of central banking over the summer, while many of his peers will have been sunning themselves on the beaches instead of sweating the statistics.

One month on from taking over from Lord King on 01 July and by 07 August Mark Carney produced and presented a “forward guidance” strategy. As a concept it instantly captured the attention and imagination of the media and business commentators.

The clarity that the simplicity of linking the Bank’s base interest rate with inflation and unemployment targets has, generally, been welcomed by operational business interests too.

The unemployment rate is currently 7.8 percent with the base rate at an historically low rate of 0.5 percent – a level unchanged since March 2009.

Mr Carney and his monetary policy committee cohorts have done much to allay fears that recent, more positive economic data would be the harbinger of an interest rate hike. However, he denied that that 7 percent unemployment or below was a target and preferred to pitch it as a figure at which point the Bank would only consider raising the base rate.

Should the inflation rise to above 2.5 percent at any point in the medium term and his forward guidance states that 7 percent or below unemployment figure is forfeit with 2.5 percent inflation being the more important figure influencing consideration of a possible interest rate rise.

Quantitative Easing (QE) continues until the inflation and/or unemployment thresholds are reached too.

Having such forward guidance about interest rate policies puts the Bank of England on a par with the Federal Reserve and the European Central Bank who, apparently, already have published policies on such matters too. Now we have these too.

It is really important that we don’t lose sight that such low interest rates are not the norm and it is inevitable that they will rise. For some, that will come as a shock.

Picture this: a day in September when the base interest rate rises so quickly in succession from 10 percent to 12 to 15 percent within a matter of hours. That day happened nearly 21 years ago. That day, the 16 September 1992, was ‘Black Wednesday’ and has become the stuff of historical study for economics students and ancient history to a new generation of borrowers.

There was a time when base rates were always in double figures. But have never been above 5 percent since spring 2008. And we all know what happened that autumn.

Yet I shouldn’t be churlish. While ‘Forward Guidance’ is not an economic regime in itself and more of a tactic for abnormal times to get us back to a more normal regime. We’ve had to live what, some years ago, was characterised as the ‘new normal’ for long enough and many of us have had quite enough of it.

Whether a regime or a tactic to give us a road map to sustained recovery remains to be seen but I, for one, am more than happy that Governor Carney’s pronouncement has been part of a summer of positive data which makes it feel as if we’re pointing in the right direction. At last.

Will Mooney MRICS
Partner
Commercial, Cambridge

Harvest is Nearly Over

Harvest is nearly over and in general, although yields have not been astounding, the weather has been kind for once. It has probably been the least interrupted harvest for 5 or 6 years which is a welcome relief to everyone after the series of wet summers we have experienced in recent years which culminated in the disaster that was 2012.

The impact of last year’s weather has certainly affected this year’s yields with some “winter” crops which were established in wet conditions last autumn/winter really struggling but for those who held their nerve and planted crops this spring, these have performed reasonably well. The hot dry spell in June/July did result in some crops dying off prematurely which was particularly noticeable in beans and some cereals on lighter land.

However, in general it has been a positive story and many farmers have already been able to sow next year’s oilseed rape which needs to be in the ground before the end of August in order to produce a reasonable crop next year. Indeed as we move in to the transition period between the end of harvest and the start of cultivations for next year’s crop many farmers will be secretly hoping for a little rain so as to help with creating a seed bed and for the establishment of the next crop.

But we only want rain in moderation because there is a lot more work to be done before the winter is upon us. For example livestock farmers will be hoping that the weather is not too wet as many still want to take a late cut of grass silage and all the maize is still to be harvested. Last year was so wet that some maize crops were never harvested and that which was harvested was generally very poor.

Thankfully this year looks very different, with some good maize crops around and fingers crossed, if the weather does not deteriorate too much there is a reasonable chance of harvesting it towards the end of this month or the start of next. This would be a great boon to livestock farmers who should have a good store of winter forage in stock this winter which should help support milk production and the fattening of beef cattle.

So all in all, this summer’s weather has been a merciful relief to all farmers in the area; cattle have generally thrived out at pasture, crops have grown reasonably well, harvest has been straightforward and the establishment of next year’s crops is well underway – what a difference a year makes.

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