Farming debt has risen

It is sobering to learn that farming debt in the UK has risen annually by approximately £1bn for the past five years and in the 12 months to September 2015 it rose by a staggering £1.45bn - bringing total debt to £17.5bn.

This is not all doom and gloom because some of this debt has increased because many farmers have made good profits since 2007 and used some of these profits for much needed investment in fixed equipment and land. However, the tide has certainly turned and in the last 18 months or so additional debt has been taken on to finance losses.

In this context Andersons, the farm business consultants, predict that farm debt is likely to rise between £1 and 2bn by autumn 2016.  Securing these funds will be challenging because banks have become increasingly demanding in their requirements.

But with interest rates still at historically low levels, businesses are currently being cushioned from the worst effects of these rising levels of debt although now US interest rates are increasing, the prediction is that Bank of England rates will follow this upward trend in the next year or 18 months. Rates are not expected to rise dramatically, but now may be a good moment for businesses to consider fixing the interest rate on least some of their long term borrowing.

However, if additional debt is to be taken on, the importance of preparing good business plans, budgets and cashflows cannot be overestimated, particularly if it is predicted that losses will be made in the short term.  

Banks will need to be confident that any farmer wishing to borrow more will have the ability to service that debt. It is no longer sufficient to rely on capital value of land and property as the security.

Farmers who cannot convince the banks that they have a firm grasp of the finances of their own business will struggle to secure further debt. This is the moment when such individuals must be careful not to fall into the grips of unscrupulous lenders who may offer finance but at crippling rates which will often end in tears.  

But for those who can secure debt based on realistic short-term budgets and longer term optimism that commodity prices will rise once again to more sustainable levels, there is reason for hope in 2016 and beyond. 

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

Compass points enterprise zones towards 2016

In the recent round of identification and designation of new Enterprise Zones (EZ) – announced by Chancellor Osborne at the end of the last month -  there are no fewer than 15 locations in Cambridgeshire, Suffolk and Norfolk. One of which, Haverhill Research Park, is claimed by Cambridge but is actually in Suffolk. All of which, to varying degrees, property agents in the patch have substantial interests either directly as an appointed advisor to the development or an occupier seeking premises or, indirectly, in working for the owners or current or potential occupiers on nearby sites, estates or Parks in the pipeline or already established.

The LEPs in this region – the Greater Cambridge Greater Peterborough Enterprise Partnership which delivered the 5 sites which comprise the Cambridge Compass Enterprise Zone area and the New Anglia Local Enterprise Partnership which succeeded in not only making the case for creating 10 new EZs in Suffolk and Norfolk under the Space to Innovate banner, but also in the extension of the current Great Yarmouth & Lowestoft (New Anglia) Enterprise Zone – have done more than a fine job in achieving these zones in the region.

Coming together in partnership with business and other local interests, these LEPs have successfully navigated the labyrinthian corridors of Whitehall to make the regional and local business cases to the national civil servants and government advisors who hold the purse strings when it comes to the creation of EZs and other sources of central funding.  

Anyone who has ever tendered for projects involving public money – whether professionally, many agents have dedicated teams to work in public sector projects and those which have to access public funds, or in a more civic or social role – can have nothing but praise for what the LEPs have pulled off for the eastern region.

But the plaudits shouldn’t stop there. Because while each LEP’s remit and accountability extends to its own area, technically, collectively the emphasis of each of the new EZs in playing to the attributes of each locale forms a chain of EZs which gives a complete picture of our region.

For instance, two new EZ locations in rural north Norfolk will have energy and the low carbon sectors in their sights. Whereas, one in King’s Lynn has agri-tech and food production at its core.  Equally, some of the new EZs in Suffolk play to the strengths of the ports and the A14 in positioning logistics and the supply-chain sectors. 

The Cambridge Compass Enterprise Zones gives 5 former fringe locations a chance to capitalise on the ‘Cambridge effect’ in terms of employment opportunities with 2 – Cambourne Business Park and Northstowe Phase 1 pointing the way forward in co-locating homes and jobs.

These new EZs come in to effect in spring next year (2016) and while I am no archetype Pollyanna, I welcome the way these will help point a way forward for this region which is far from inward looking in having Felixstowe port as the gateway to the rest of the world.

Will Mooney MRICS
Partner
Commercial, Cambridge

Life’s an adventure – and it’s never too late!

One of the best things about an estate agent’s job has got to be all the wonderful houses we get to see throughout the year – in all shapes, sizes and locations.  Added to this, are all the different personalities we come across - I truly believe there is no such thing as an uninteresting person; if you engage with someone for long enough you will always discover something unique and fabulous about them.

Yet some people really stand out from the crowd - they capture your imagination and inspire you.

One such couple, whose house we have recently sold, made a special impression on me.  As estate agents, when we carry out an initial market appraisal, not only are we looking at what the property is worth and how best it should be marketed but we are also developing a bigger picture of our clients - this includes discovering their reasons for moving.

This particular couple had both just retired from prestigious careers and could easily have followed the more usual and very comfortable route of looking forward to grandchildren, spending time on the golf course and more regular holidays.  

But this was not for them.

Having spent so much time on their careers and bringing up their children, they, literally, had no plan whatsoever – or, indeed, perhaps the best plan ever – to sell up and go on a gap year!  Not having taken a gap year prior to their careers it’s the perfect time to catch up.  They can now discover where life is going to entice them.

The down-sizing move (or right-sizing as it is now called) following retirement is often the most difficult move anyone makes in a lifetime.

There is so much to consider, especially if moving from a much-loved family home to something smaller and more practical.

Many people have thoughts beyond retirement of life going downhill – a potential slow-down and living life, vicariously, through children and grandchildren.  But it doesn’t have to be so…

What excited me most about this amazing couple was that a slow-down was not on the agenda - the adventure was just beginning.  They were going to pack up their dogs and some luggage and hop in their car to France and see where life took them for the year ahead.

Without the constraints of responsibilities they can, gradually, take stock of their lives and allow the decision-making process to happen organically.  On a practical note their children are wholly supportive, plus a very small cottage has been purchased in a Suffolk village to ensure they don’t lose their foothold in the UK property market.

It is really refreshing to think that moving house doesn’t always have to dovetail between selling one house with the certainty of buying another perfect replacement. 

What a great idea to take a breather and to remember that there is no set path, just follow your heart.  And, most importantly, it is never too late.

Caroline Edwards
Partner
Residential Sales, Long Melford
T: 01787 888622
E: caroline.edwards@carterjonas.co.uk

Christmas has come early

Christmas has come early for tens of thousands of farmers as the Rural Payments Agency has surpassed the expectations of many industry commentators by starting to make Basic Payment Scheme payments on time.

I was relieved and surprised to receive notification from the RPA at the end of November that a number of clients were to receive their Basic Payment Scheme payments on December 1.  This was the first day of the payment window and the RPA must be congratulated on getting at least some of them out so promptly.

The RPA has confirmed that more than 33,000 farmers in England were paid their 2015 BPS claim on December 1 and they have committed to paying at least 44,000 claimants (50 per cent of the total) by the end of December. This is in addition to having made £21 million of EU dairy support payments to almost 11,000 dairy farmers in England, Scotland, Wales and Northern Ireland as I reported previously.

NFU vice-president Guy Smith said: “When the RPA starts talking about a percentage, we want to see value as well as volume going out. We do not want to see one million £10 cheques. We want to see a good cross-section of payment claims going out.

“A significant amount of money has gone out – and we have to congratulate the RPA for that. But the fact they have only paid just over one-third of applicants increases the anxiety among the have-nots.”

It is clear to me from those payments I am aware of that those which have been made are for small and relatively simple claims. So there is concern that some of the larger, more complex claims may remain unpaid for some time to come.  This worry has been raised with the RPA by industry leaders and as a result the RPA has written to all complex cases, which they do not expect to pay by the end of January. 

The official payment window runs from December 1, 2015 to June 30, 2016, so some farmers could still be in for a long wait and I urge banks to help with the cash flow crisis that will be caused by these delays.

But, at this stage all we can hope is that the RPA continues to surprise us with good news and even the most complex of claims will be made early in the New Year.

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

Right to Rent is closer than you think

Right to Rent has been widely publicised as the need to check on a tenant’s immigration status with regard to occupying residential property in England.

But in reality it is much more; status checks need to be completed on every adult occupier aged 18 or over for all English tenancies starting on or after 1 February 2016.

The effective date from which to begin undertaking checks is January 3, 2016, the start of the 28 day period leading up to February 1 because all checks must be completed in the 28 day period before the tenancy comes into effect.

Whereas in the past a landlord or letting agent might meet the lead tenant and only hear about the others who would be occupying the property, the landlord or letting agent now needs to see every adult occupant who will occupy the property even if they are not named on the tenancy agreement while simultaneously checking immigration status and documentation.

There is no need to check an occupier’s children, but the landlord or letting agent should satisfy themselves that they are under the age of 18 at the time the tenancy begins and keep evidence of this. Further checks on a child will not be needed if the child turns 18 during the tenancy, unless and until the tenancy is renegotiated, or a repeat Right to Rent check is required.

There is no requirement to create a written tenancy agreement listing all those who will live in the property, but Home Office guidance suggests that landlords, agents and householders may find it advisable to do so. If the tenancy agreement is oral or implied, the checks should still be made on all adults living at the property. If there is evidence a landlord, agent or householder was aware of a person living in the property but did not check them, they may be liable to a civil penalty, regardless of whether the agreement is written, oral or implied.

It is advisable to record the following:

• The full name and date of birth of all adults who will live in the property;

• The names and dates of birth of all children under 18 who will be living with them in the property;

• Whether each of the adults named has current permission to be in the UK.

The requirements were enacted in the Immigration Act 2014, which also lists some exemptions I have highlighted below:

• landlords and agents do not have to check the Right to Rent of existing occupiers who moved in before the requirements are introduced;

• where the start of a tenancy pre-dates the requirements, and is renewed between the same parties at the same property without a break, then there is no requirement to conduct checks;

• holiday lets (but the Home Office advises that landlords letting holiday accommodation should consider how a person will be using the property to decide whether Right to Rent checks are necessary. A letting of three months or more, or extending time-limited lettings, would be circumstances where checks would be advisable.);

• agreements to which the Mobile Home Acts 1983 applies, that is an agreement under which a person is entitled to station a mobile home on a site and use it as their only or main home, are exempt. However, should a mobile home owner decide to let their mobile home for use by another adult, this residential tenancy agreement will be subject to the Scheme.

• A residential tenancy agreement that grants a right of occupation in accommodation provided by an employer to an employee, or by a body providing training to an individual in connection with that training, is exempt from the Scheme.

• All halls of residence (whether the landlord is an educational institution or private accommodation provider) are exempt from the Scheme, as is any accommodation provided for students directly by a higher or further educational institution.

• Leases which grant a right of occupation for a term of seven years or more are exempt. An agreement will not grant a right of occupation for a term of seven years or more if the agreement can be terminated at the option of a party before the end of seven years from the start of the term.

The following two groups of people have unlimited right to rent: British citizens, EEA and Swiss nationals.

A landlord will need to see evidence of any adult occupier’s identity (over 18 years) and citizenship e.g. passport or biometric residence permit and compare the original document with the individual face to face. Copies of the documents should be taken and retained for one year after the tenancy ends. The Home Office has published a landlord's guide to checking immigration documents, which may be useful for landlords click here. 

If it is not possible to check the documents before entering into the tenancy agreement (e.g. if the potential tenant is overseas), the landlord/ agent may enter into a conditional tenancy agreement – conditional on production of evidence of Right to Rent before moving in. 

The Act makes it an offence to let premises to someone (either the tenant or any adult occupying the property with them) who the landlord knows or has reasonable cause to believe does not have the Right to Rent.

Given the potential for discrimination, the Government’s code of practice advises that documents should be requested from all potential applicants. Refusing a tenant because they have limited right to remain may amount to indirect discrimination.

When Right to Rent was first mooted, there were concerns that people born in the UK might not hold a passport and therefore find it difficult to prove their residence entitlement. However, a combination of documents such as a birth certificate and driving licence (the guidance states with or without a counterpart, although counterparts have been invalid since June, 2015), are acceptable proof.

A landlord should know or have reasonable cause to believe a tenant does not have the Right to Rent if:

• It failed to check the documents in the first place.

• The tenant had a time limited or discretionary Right to Rent and that period has now ended. This means the landlord must monitor and make sure an occupier’s right to occupy does not lapse.

• The Home Office has served notice that the occupant has no Right to Rent. 

If a person sub-lets a property, they will have responsibility for making the checks, although this responsibility can be passed up to the landlord by agreement. It is recommended that the agreement as to allocation of responsibility for checks is in writing. Likewise, anyone who takes in a lodger should check they have a Right to Rent before allowing them to move in.

It is worth bearing in mind that in his March, 2015, Budget statement the Chancellor included under the section about a sharing society measures to amend its model agreement for an assured shorthold tenancy by summer 2015, to provide that tenants in private rented accommodation can request their landlord’s permission to sub-let or otherwise share space, on a short-term basis. 

The Immigration Act 2014 provides for a “civil penalty scheme” whereby landlords and their agents could face fines of up to £3,000 per tenant. If the Immigration Bill 2015 is approved in its current form, criminal sanctions may apply in situations where a landlord or its agent knows or has reasonable cause to believe that a person does not have a Right to Rent. Criminalising the sanction means that imprisonment may become an applicable punishment.

At Carter Jonas we are taking advice from the Association of Residential Letting Agents (ARLA) and Pain Smith Solicitors putting in place procedures ahead of the legislation taking effect in February in the areas in which we operate.  Where we do not manage our clients’ properties they will need to put in place their own procedures to check the tenant’s right to rent.

The landlords Code of Practice gives very helpful guidance and I recommend that everyone involved in residential lettings studies it. This link connects: https://www.gov.uk/government/publications/right-to-rent-landlords-code-of-practice/code-of-practice-on-illegal-immigrants-and-private-rented-accommodation#only-home

A landlords’ guide to checking immigration documents can be found at: https://www.gov.uk/government/publications/rules-and-acceptable-documents-right-to-rent-checks

Lisa Simon, 

Partner Head of Residential Lettings

T: 020 7518 3234 

E: lisa.simon@carterjonas.co.uk

Farm enterprises and renewable initiatives

Farm enterprises that have taken up renewable initiatives, such as anaerobic digestion plants which also supply heating to tenanted properties need to be aware of rule changes that come into effect by the end of this month.

The Heat Network (Metering and Billing) Regulations 2014 are bringing a change of legislation that will affect how tenants of buildings with communal heating systems will be invoiced for their use of heating, cooling and hot water to ensure that end-users of heat are only charged for the heating they use.

Obligations imposed by the regulations on any supplier of central heating systems are wider than previous legislation and include landlords and owners of buildings where heating is supplied from a central source to more than one tenant, for example shared offices, within the definition of a “supplier”.

As well as landlords who invoice directly for heating charges, buildings where heating is included within rent or service charge payments are also included.

By December 31, 2015, each supplier must send a notification to the Secretary of State for Business, Innovation and Skills via the National Measurement and Regulation Office providing estimates of the yearly heat capacity, heat generated, and heat supplied applying to the heat source in question. 

The Secretary of State must also be supplied with practical information about the location of the heat supply, the type of building in which it is contained, and the type of customer supplied. Following the initial notification this information will need to be updated with the minister every four years.

By December 31, 2016, the supplier must install meters in its building which measure the individual consumption by the end-user in all cases unless it is not cost-effective or not technically feasible to do so. The regulations contain a test for whether or not it is cost-effective for meters to be installed. 

Where it is not cost-effective, this must be considered again every four years and meters installed upon any substantial reconstruction of, or installation of new services in, the building.

By December 31, 2016 heating for each end-user will be separately metered where possible based on actual consumption. 

Non compliance by a supplier is a criminal offence and punishable with a fine of up to £5,000 per offence plus daily penalties of £500 until the breach is remedied.

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

Badger Culls

When are we going to find out if the badger culls have cut TB in cattle?

As part of the government’s 25-year strategy to eradicate TB, farming minister George Eustice visited the West Country to launch a new cross-industry TB biosecurity campaign which includes the introduction of the TB Hub (www.tbhub.co.uk), a website providing beef and dairy farmers with a range of free advice.

But he was unable to answer my question.
 
The website has been created by the Agriculture and Horticulture Development Board (AHDB) in conjunction with the Animal and Plant Health Agency, the British Cattle Veterinary Association, Defra, Landex and the NFU, to provide information on all aspects of dealing with TB on farms.

Among the guidance is a five-point plan outlining measures farmers should take to help protect their herds from bovine TB. The plan includes the following common sense advice:

• Restrict contact between badgers and cattle 
• Manage cattle feed and water to reduce the chance of contamination by other infected cattle or badgers
• Stop infected cattle entering the herd by careful investigation of the TB history of purchased cattle and post movement testing of new cattle before introducing them in to the herd
• Reduce risk from neighbouring herds by awareness of their TB status and ensuring barriers between herds are kept in place
• Minimise risk of infection from cattle manure by ensuring all manure is well rotted and spread on land used for arable purposes or if spread on pasture the land is not grazed for at least two months.

The website expands on these points in detail and while some of the measures are more practical than others, the clear message is that although the government will continue the badger cull in certain areas, they also expect farmers to do their bit by heeding the biosecurity measures set out in this five-point plan. 

George Eustice was also asked about the effectiveness of this autumn’s badger culling programme in three areas of the West Country and although he said that we will have to wait for the official results to be announced it appeared he felt things had gone rather more successfully this year than in the previous two. 

However, what we really need to know is not how successful marksmen have been at killing badgers but whether the culling has had any impact on the occurrence of TB in cattle.  Although we have anecdotal evidence that it has helped, the government needs to carry out a proper analysis of the evidence which will help inform the decision whether the cull areas should be expanded.

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

Defra's updated version of its Farm Business Income

Defra has published an updated version of its Farm Business Income (FBI) estimates for the 2014-15 year which shows that 60 per cent of cereal farms failed to make a profit if income from EU support payments and other diversified income is excluded.

This not only demonstrates the challenges facing farmers in light of the fall in commodity prices but it also demonstrates the importance of diversified income streams without which many farms will struggle to survive. And here the widening digital divide is becoming an increasing problem.

For example when contemplating the conversion of farm buildings to offices, one of the most important features to consider is whether it is possible to provide access to broadband. This is even beginning to impact on the letting of some residential properties on rural estates I manage here in the South West.

Anyone living and working in Wells, as I do, will be all too familiar with the inadequacy of our digital infrastructure and mobile phone reception, but there is hope that these inadequacies will eventually be remedied.  However, in more remote rural areas there may be very little hope of ever being connected via the existing infrastructure.

As a result of this widespread rural problem the Country Land and Business Association (CLA) has submitted written evidence to an inquiry by the Business, Innovation and Skills Select Committee on the digital economy. 

The CLA noted that the government has put significant emphasis on how digital technology can increase productivity in our economy and, in their evidence, highlighted the appetite in rural areas to use new technologies.  However, the CLA raised worries about how the lack of connectivity in rural areas is contributing to the ever widening rural-urban digital divide.

This is becoming a big problem for all businesses in the countryside, not least farmers who are increasingly being required to submit information electronically such as registering cattle identification and movement information or VAT returns and these requirements are only going to increase.

Failure to address this digital divide will result in farmers and other rural communities becoming increasingly isolated from the wider economy, which is a serious concern for the future of the countryside.


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

Solar parks and turbines

The sight of solar parks and wind turbines are not to everyone’s taste but such visual impacts must be balanced against the prospect of more extreme weather patterns associated with climate change.

I will pin my colours to the mast – I do believe that burning fossil fuels is contributing to climate change.  

I recall doing A-level chemistry back in the early 1980s and when my teacher explained the potential impact of liberating greenhouse gases into the atmosphere, and many of his predictions appear to be coming true.

For instance 2014 was the warmest year on record in the UK and eight of the UK's top ten warmest years have happened since 2002.  Similarly 2014 was the fourth wettest year since the Met Office records started in 1910, meaning we have experienced five of the UK's top six wettest years since 2000.

I believe this is sufficient evidence to make us think very seriously about the impact that burning fossil fuels has on our climate.  But the government has taken a retrograde step in turning off support for many renewable projects so abruptly and yet at the same time also appears to be encouraging fracking. This does not make climatic sense.

Then we saw our government do a deal with the Chinese government over the building of a new nuclear power station at Hinkley Point, demonstrating that David Cameron does see the need to subsidise non-carbon energy production to provide security of supply.  I do not disagree with this but I do question the muddled thinking regarding the government’s wider energy policies and the impact this is having on the renewable energy sector in particular.

This sector has grown strongly from virtually nothing over the last 10 years and has become increasingly efficient with the result that solar projects are on the verge of becoming cheaper than gas as a means of generating electricity. 

Therefore reducing subsidy for solar projects was the right thing to do, but cutting it by 87 per cent is too extreme and will constrain the development of this form of renewable energy which has not only helped reduce the production of climate damaging gases but also provided opportunities for many farmers and landowners here in the South West. 


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

Small number of applications for the CSS have been confirmed

Natural England have confirmed that only 2,314 applications for new Mid-Tier Countryside Stewardship Scheme (CSS) were received by the deadline of September 30. This is a disappointing figure and raises concerns that many farmers in agri-environment schemes will now simply withdraw their land when the existing scheme ends.  

Also, because the new scheme is competitive I expect a significant number of applications will be turned down.  

This is perhaps no surprise as the existing scheme which included the “broad and shallow” Entry Level Scheme (ELS) was easy to enter and critics would say it delivered little in environmental gain. However, it did get many farmers and landowners involved in agri-environment schemes to the extent that around 70 per cent of English agricultural land is covered by some form of environmental scheme and this must have delivered some environmental benefit.

But, as funds have got tighter, the demands of the new CSS have increased and it appears they have risen to such a level that they have discouraged many farmers from even applying.  This is despite the difficult economic situation facing many of them.  

It seems the new scheme has either been designed to discourage all but the best applicants or it has been “over-engineered” - making the application and delivery of the scheme too onerous and expensive for most farmers.  My guess is that it is a bit of both but we know for certain that many farmers and landowners will not be entering the new scheme when their existing one expires.

As a result, the Country Land and Business Association (CLA) is calling for comprehensive revision of the scheme for next year.

CLA president Henry Robinson said: “Landowners and farmers want to protect and improve the environment, and we want the new Countryside Stewardship Scheme to succeed. However the chaos of the new scheme’s introduction and the complexity of its requirements have put land managers off participating next year.

“We have been warning the government for months, but they failed to take the swift and decisive action that was required to salvage the scheme. England’s natural environment and wildlife will pay the price. This is a big step backwards in our efforts to improve the environmental management of our landscapes.

“Defra must now enter into open discussion with land managers to ensure that next year’s scheme is much improved both in terms of being viable for applicants and also delivering the best environmental benefits.”

However, it remains to be seen whether Defra will listen to such calls or whether attracting only limited numbers of committed farmers and landowners is the purpose behind the new Countryside Stewardship Scheme. 


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

The hokey cokey referendum

We’ve now entered what commentators are calling ‘a phoney war’ in what could be a two year long run-up to the referendum on European Union (EU) membership which is to take place before the end of 2017.

Unlike the 2014 Scottish Independence referendum, the question on the ballot paper won’t be ‘Yes’ or ‘No’. It will be ‘Stay’ or ‘Leave’.

The campaign groups don’t fall in to the convenient polarities of pro-business versus anti-business or the political groupings of left and right and so, we,  the electorate are not going to be allowed to be lazy in our thinking about this referendum and the consequences of its outcome. 

It is a referendum which will see voices of business line up on both sides and some, in all likelihood, stuck in the middle seeing convincing commercial and policy arguments on both sides.  

It’s not just any old referendum either. It’s a referendum in which the ex-boss of Marks and Spencer, Lord (Stuart) Rose is heading up the ‘Stay’ campaign.  The complexity of the issues is reflected in the make up of the ‘Go’ camp which has two main campaign groups in profile: ‘Vote Leave’ and ‘Leave.EU’. All three groups got under starters orders in October.

‘Vote Leave’ sees formal Conservative and Labour ‘Brexit’ groupings come together in an umbrella membership which hosts individuals with UKIP credentials too. ‘Leave.EU’ positions itself as a more grass-roots movement and the financial sector experience and entrepreneurial business-chops of its ‘ambassadors’ are showcased on its website’s home page.

Confusingly - and refreshingly - both ‘Stay’ and ‘Leave’ are happy to admit to being the patriotic choice. It is to be hoped that the absence of jingoism in the course of the pre-vote debate and the actual ballot itself remains because the presence of national stereotypes does nothing for the clarity of thought we require in making our decision.

At this early stage of the publicity campaigns, there appears to be an absence of ideology too with more of an emphasis on pragmatism. Upon launch, Lord Rose was keen to highlight that the ‘Stay’ campaign was critical of the European Union and voting to remain in the EU was the best way to reform it for the good of the UK.

Leave’s arguments point to the benefits and flexibility of financial and policy independence in the modern world pitted against the inflexibility that being in a single currency imposed on countries like Greece in dealing with the fall out from the financial crisis of 2008. In making the case for Brexit, some free marketeers point to the fact that Euro currency countries could not make their own sovereign case to the International Monetary Fund (IMF) to re-finance debt which might have set them in better stead to weather their stormy financial situation.

While shaking it all about when it comes to Britain’s future, this referendum campaign is also stirring up times past.

The 1975 referendum to stay or leave the European Economic Community (EEC) brought together some strange bedfellows in Prime Minister Harold Wilson and the Leader of the Oppostion, the Rt Hon Margaret Thatcher MP backing the ‘Yes’ campaign.  While supporters of internationalism – which, at the time, included high profile members of the Cabinet in Tony Benn and Michael Foot – were opposed to remaining in the EEC.

Plus ça change, plus c’est la même chose as the saying goes.

Will Mooney MRICS
Partner
Commercial, Cambridge

It has been a busy week...

It has been another busy week with meetings in Taunton, Bristol, Oxford, Reading, the Dairy Dinner, Carter Jonas’ National Rural Division Day and two charity events on the weekend.  

After seven days like that I often sit and ask what if anything I have learned. In this case it was the huge range of fortunes affecting the rural world. 

The woes of the dairy sector are well known to us all, although NFU President Meurig Raymond spoke at the Dairy Dinner of cautious optimism.  He alluded to the price rises in recent international milk commodity auctions giving hope that these increases will eventually feed through to the milk price being paid to our farmers.

It was also interesting to hear at a breakfast meeting that the bank managers there had not seen any significant financial problems with the majority of their farming clients.  This came as a surprise and I suspect if I sit with the same bank managers in six months, they may have a different story to tell, especially if receipt of the Basic Payments are delayed until February or March as many expect.

I then went on to Carter Jonas’ Rural Division Day where we considered the land market, among other topics, and the overwhelming sentiment was that the price of sizeable blocks of quality agricultural land remain firm.  

Demand for such land is increasingly being driven by “rollover money” as farmers and landowners who have sold land for development are looking to re-invest in agricultural land, thereby rolling over the capital benefit and avoiding the payment of Capital Gains Tax in the short term.

But also true is that the land market is extremely local and values often vary hugely across short geographic distances as can be seen here in Somerset with some “flood affected” land on the Levels being worth not much more than £3,000/acre with land in places on surrounding higher ground worth three or four times as much.  This makes the valuation of land very difficult and local knowledge increasingly important.

So, while some farmers and landowners are prospering, others are struggling and as with the land market, their fortunes can be very local – one farmer may have benefited from a good milk contract or the sale of development land while their neighbour has not.  

Sometimes this may be just good or bad luck but there are individuals with the habit of attracting good fortune. Perhaps others should learn from the business attitudes of these “lucky ones”. 


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

MPs promise warm reception for your energy views

The All Party Parliamentary Group for the Private Rented Sector is holding an inquiry into the energy efficiency of private rented housing.

From April 1, 2018, all privately rented properties will be required to have a minimum energy performance rating of E on an Energy Performance Certificate. There are some exemptions, but these will have to be registered and it’s uncertain how long they will continue.

The MPs’ inquiry follows the government’s decision not to renew the Landlord Energy Savings Allowance, originally intended to encourage landlords to improve the energy efficiency of their properties. It was dropped because of low take up. The government has also stopped funding the Green Deal, the original vehicle for helping tenants fund energy efficiency improvements to their homes.

The MPs will consider “the impact of recent policy developments on energy efficiency improvements in the private rented sector and make recommendations about what new policies could be developed to support the sector within the government’s overall ambitions for household energy efficiency and given its efforts to ensure value for taxpayers’ money.”

Their chairman, Oliver Colville MP, says the inquiry will look to develop new ideas that support landlords in meeting their new target, save tenants money on their bills, and help improve standards.

The MPs are all those with an interest to send written submissions of no more than 1,500 words to Ed Jacobs on admin@prs-group.org.uk by Friday, October 23.

Lisa Simon, 

Partner Head of Residential Lettings

T: 020 7518 3234 

E: lisa.simon@carterjonas.co.uk

Maintain your property – and meticulous records. Detail holds the key to success with Section 21

Plenty of focus has been placed on Section 21 notices, their detail, and the need to serve any notice in the correct format in order to be effective.

In fact the detail is so fine that the first draft of the official notice was erroneous and needed correction as the deadline passed for its introduction on October 1.

Possibly more important than the detail is the devilish part – keeping on top of paperwork in relation to maintenance as well as the maintenance itself.

Much of the change was brought about through the Deregulation Bill passed into law at the last possible moment before the General Election.

At the same time as the Bill received Royal Assent, the run-up to the election was also bringing a great deal of talk about retaliatory evictions. Campaigners were concerned that landlords were able to evict tenants under existing law without giving explanation and could easily do so if the tenant complained about the conditions of the property they rent.

As a result, once a tenant has made a complaint the landlord is prevented from retaliatory eviction under section 33 of the Deregulation Act 2015. This makes it imperative that landlords stay on top of their legal obligations for maintenance and that they attend to repairs before the tenant can head for the local authority’s office and seek the serving of an Improvement Notice.

There is no room for complacency in this respect and any tenant who is beginning to appear problematic for other reasons should not be given the key to remaining in their tenancy through a slack approach to maintenance.

Whenever you receive a complaint in writing from a tenant regarding the condition of the property you must within 14 days give an “adequate” response in writing. If you default, a Section 21 notice cannot be served. The legislation refers to the complaint being in writing but possibly all complaints, no matter how minor, should be clearly logged and receive a response.

The section also provides that if the tenant is unhappy with your response he can complain to the local authority who may then serve a notice requiring works to be undertaken. If such notice is served then no valid section 21 notice may be served for 6 months from the date of that notice.

All the provisions provide that Section 21 notices cannot be served after the actual complaint either by the tenant or service of the notice by the local authority. This should not affect earlier Section 21 notices or situations where the tenant has complained to the local authority but they have not inspected either by the time of the service of the notice or the court proceedings.

Private landlords have limited protection. If the tenant can be shown as the cause of the poor condition, either from positively damaging the property or omission, there may be protection but the burden of proof is on the landlord. If it can be genuinely shown the property is on the market for sale there is also an exemption.

Good processes regarding complaints handling, and a clear understanding by tenants as to who is responsible for accepting complaints, is now more important than ever in residential lettings property management.

As a reminder, the law also stipulates that at the start of the tenancy, the landlord or letting agent must give the tenant details of where and how the deposit is held and copies of both the EPC and, where applicable, the gas safety certificate and the Government’s eight page booklet “How to Rent: the checklist for renting in England” which is only available electronically and has to be printed at the landlord’s expense to be handed over each time. It is important to keep evidence of the serving of this paperwork.

Details of what must be served are contained in the The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 which can be found by clicking here.

Good practice will no doubt dictate that at the time of serving the correct Section 21 notice the rest of the documentation should be re-served so that there can be no question of the tenant having received it.

Lisa Simon, 

Partner Head of Residential Lettings

T: 020 7518 3234 

E: lisa.simon@carterjonas.co.uk

Exchange rates for European support payments for farmers have been fixed for 2015

The Euro/pound exchange rate for European support payments for farmers has now been fixed for the 2015 year.  

Previously this conversion rate was fixed on the exchange rate of September 30 only, but this year it is set on the average exchange rate throughout the month of September.

The reason for the change is to reduce the volatility and unfairness that can be caused by using just one date to fix the conversion rate for the whole year, but despite this sensible move the value of the euro has remained subdued.  

As a result the conversion rate has been fixed at the rate of one euro = 73.14p which is the lowest farmers have received for eight years and six per cent down on last year’s rate.

However, because of the introduction of the new Basic Payment Scheme this year, we are still a long way short if understanding how this will actually translate in terms of cash in a farmer’s pocket. This is because the Rural Payments Agency (RPA) still has to calculate the actual value of “a Basic Payment Entitlement” before the conversion rate can be applied.

Here there are still a number of unknown factors which need to be sorted before the value of an entitlement can be calculated.  These unknowns include: 

1. The effect of rebalancing entitlement payments between Lowland, Severely Disadvantaged and Moorland areas
2. The change in the number of entitlements claimed compared to the previous Single Payment Scheme due to the introduction of a minimum claim size and other new rules
3. The deductions which will be made to fund the National Reserve and the Young Farmer Payment
4. The annual change to the Basic Payment Scheme National Ceiling (budget)
5. The rate of “Financial discipline” (basically budget cuts) which may be imposed by Europe

Then there is the question of when the new payments will be made.  Under the old scheme, in recent years most payments were made shortly after the payment window opened in December, and the RPA continues to sound confident about “making the majority of payments in December and the vast majority before the end of January”.  

However, many commentators are pessimistic that the RPA will achieve these timescales and are suggesting farmers should not budget to receive payments until February or March next year.  

This Christmas present will obviously put many, already cash strapped farmers under even more unwanted financial pressure in 2016. 


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

Wells Food Festival

Normally I write about current issues facing the farming industry.  However this week I want to write about the Wells Food Festival, which is now in its third year – it is free and takes place on Sunday, October 11 in the middle of the city.

The theme of this year’s event is Eat the Landscape which will be the subject of a public debate taking place on the day.  The aim is to enable visitors to recognise the connection between their food choices, wildlife and the landscape, as well as producers.  

The public needs to recognise they are contributing to the quality of the world around them by the food choices they make.   

In the last five years, an increasing number of restaurants and pubs have started displaying the provenance of their produce and naming their suppliers.  So this is important to consumers.  

The debate will explore the merits of specialist and artisan producers and the intensive farming methods that many farmers have adopted in order to survive. 

The argument runs like this.  Before the rise and rise of supermarkets, relatively short supply chains between field and fork meant many farmers had a direct connection with consumers. 

Today, the increasing scale of agricultural production, combined with complex supply chains, means that many consumers and producers have lost touch with where their food comes from. In turn this leads to producer issues being forgotten or misunderstood by consumers.  

The predominant trend towards large scale intensive farms with food processed and packaged many miles away is leading to increasing numbers of consumers no longer appreciating where their food comes from, or the importance that farming plays in the countryside supporting rural communities, wildlife and the wider landscape. 

Here in Somerset a significant number of producers have bucked this trend - 92 of whom will be displaying their wares at this year’s Wells Food Festival. By their approach to growing, processing and marketing high quality, added value products they continue a long tradition of connecting directly with their customers.  

This is now seen by many to be a diversification rather than what farmers used to habitually do before the supply chain became so complicated resulting in most farmers being forced down the “production only” route.

Those farmers who have embraced this form of diversification have not only shortened the supply chain enabling them to extract profit that would otherwise be lost to the middle men, but they often make a significant contribution to the wider rural economy, not least tourism.  

It is also important to recognise that many such producers show younger people there is a future for them in our industry although the view that every farmer could make a living in this manner needs to be balanced against the economic reality of producing enough food to feed an ever expanding UK and world population.

Anyhow, whatever your view on this debate there will be sure to be some amazing local food on offer so why not just come along and enjoy yourself.


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

Keeping it real about AI

So much focus in the news on artificial intelligence is far from droning on, believes Will Mooney, Carter Jonas partner and head of commercial in the eastern region

It is incumbent upon any professional adviser to have an understanding of their clients’ business. Those with clients in the technology sector, acknowledge that the speed of change means they are always going to be learning something new. 

The latest technology to intrigue me is Artificial Intelligence (AI).Like many, I do get the basic concept but what’s more tricky is understanding its wordly application and how, in the not too distant future, this might affect my working, domestic and social world.

I could say that understanding AI is above my pay grade, so to speak, but perhaps, one day, an AI-primed robot my be on my pay grade instead of me. Time will tell. But surely all of us with enquiring minds, operating on any pay grade, must be wondering about the the impact that AI is having -  and will have -  on the working world within our life times.

Like most technological developments, AI and its attendent world of robotics once sat in a comfortable package with drone technology in having their roots in governments’ defence spending before coming in to civil use.  As did the first usable prototype of the Internet and look how far down business civvy street that had travelled from the mid-1960s by the mid-1990s.

With drone-eye views of large properties, sites and country estates fast becoming the ‘must-have’ tool in the property agents’ marketing armoury, I can’t help but wonder what mundane but essential jobs in my industry could be happily handed over to an office robot.

It’s been suggested that in the legal world, robots could take on the job of legal executives in checking all is in order on page after page or screen after screen of contracts and agreements.  Whither the legal exec then?

The consensus appears to be that it is jobs in the creative industries which are at least threat from being undermined by AI technology. However, do bear in mind that the people relaying this message are in the media – one of those creative industries.

Far from being a threat to jobs, there are those involved in the world of AI who see their work as freeing up people to do what humans really are good at: being creative and, well, being human. Taking this line, it’s easy to follow the argument that industrialisation has shackled us humans and made machines and drones of us. We do more than be.

In a delicious and ironic twist, perhaps the robots we make and the intelligence we equip them with will free us up to re-discover what the essence of being human is?  This latter point was made with alacrity in a recent interview by Eric Horvitz who is the Director of Microsoft Research’s Redmond laboratory in Seattle.  

The more cynical members of the human race than this esteemed scientist and scholar can’t help but wonder if discovering the essence of our species isn’t a more threatening thought than that of having our jobs done by robots...

It may be that, one day, my job can and will be done by a robot.  But no matter how advanced its intelligence develops to replicate or exceed my own, I do wonder if it will ever share a gut instinct about a deal or the visceral delight and sense of achievement when the deal is sealed.  There’s definitely nothing artificial about those feelings.

Will Mooney MRICS
Partner
Commercial, Cambridge