Brexit Update April 2016 - 67% of agricultural land owners believe UK should stay in the EU
According to our latest poll 67% of agricultural land owners and rural property experts believe that the United Kingdom should vote to stay in the EU.
In our recent series of rural land seminars, 76% of those surveyed held that a vote to leave the EU would have a negative impact on income received from the Basic Payment Scheme (BPS), the biggest of the European Union’s rural grants and payments that help the farming community. The same 76% thought that income received from the Countryside Stewardship (CS) scheme, would also decrease.
Tim Jones, Head of our rural division, said:
“In December, we published a report that considered the impact of a possible Brexit on all sectors of the property industry. However, this is the first opportunity we’ve had to poll, and really gauge the view of, a large majority of our rural clients on the issue.
“Of those polled, 56% thought that the political uncertainty, expected should we vote to leave the EU, would have a negative impact on their businesses.”
When asked whether their estates would be better off out of the EU, 43% of respondents thought that it would not, whilst 34% said that they didn’t know. Just 23% of those polled thought that leaving the EU would have a positive impact on their estates.
In relation to the rural property sector, there has been much debate as to how the Common Agricultural Policy (CAP) will look should there be an exit. However, CAP is not the only subject that should be considered.
When asked how a Brexit would impact on investor demand for agricultural property in the UK, 50% thought that it would have a negative impact. Whilst 34% thought that there would be no change.
“Should the UK vote to leave the EU, the CAP subsidies will likely be reduced, which will also have an effect on rents for both the Agricultural Holding Act and Farm Business Tenancies.
“In fact many of our clients cited farms rents as an area which would suffer, should trade deal negotiations prove lengthy. This in turn could result in a fall in capital values in the short to medium term, though it is thought that best in class and well located land will continue to increase in value.”
Negativity surrounding a possible Brexit was not universally felt amongst all of Carter Jonas’s clients. The EU’s rural development policy, faced criticism from attendees as being poorly targeted and discouraging innovation and new entrants into the industry.
“Whilst the lack of clarity surrounding the outcome of a possible Brexit is likely to become a key feature over the weeks ahead, it’s worth remembering, not all of our clients were fearful of a Brexit.
“Some suggested that the removal of subsidies could drive dynamism and creative business ideas across the industry. Essentially arguing the old adage, necessity is the mother of invention. After all, the UK agricultural industry has not truly boomed since 1973.”
Partner - Head of Rural Division
Tim is head of the firm's Rural Division and of the Cambridge office, although he spends a considerable amount of time in London. He has over 20 years experience in advising institutional and pri...