The Longer View

In the light of continued uncertainty, it is relevant to highlight the number of small land transactions that we have seen during the last six months. These have arisen largely as a result of farming businesses taking stock of where they are, looking at the balance sheet and identifying small, outlying plots of land that may have amenity or strategic value to a farming neighbour.

Similarly, in the context of larger farm sales, we have seen a trend of splitting these up into smaller land parcels. This has often maximised the value per acre by making the land appeal more to developers and lifestyle buyers as well as neighbouring farmers, who might be interested in expanding into a new 100 acre block, but do not feel comfortable investing in a further 300 acres in the current market.
What this shows is the importance of taking a flexible approach in order to achieve a sale in the current market, with activity down on this time last year and farms taking longer to sell.

The Carter Jonas team in the East of England has found that, currently, smaller strategic sales are generating the best value. One example of this is a mixed use farm in Essex – which was marketed in late 2018 as a whole but subsequently was split into lots and on which offers have since been received totalling well in excess of the initial guide price.

In some cases, we have found that smaller sales are generating values significantly higher than average agricultural values.
The trend for off-market and private sales continues and, while they remain a good option for vendors to initially test the market, we advise our clients that they are better suited to bare arable land. In the next few months, many of the farms that we will be bringing to the market have a significant residential element and we will therefore be recommending open marketing to ensure that we can achieve the full market value.

Thinking of selling, or simply want to know what your property is worth? Contact your local Carter Jonas office: www.carterjonas.co.uk/contact

When our team is tasked with the valuation of rural property, more often than not there is woodland of some size or shape to consider, whether it be a shelterbelt, plantation, scrub or ancient woodland area. One challenge we always face is how do we accurately value woodland?

Market evidence can be thin on the ground and, from the evidence we have found, there is often a special purchaser involved, for instance a neighbouring land owner.

As always, location underpins value, but designations also play their part…

Recently we teamed up with Lockhart Garratt, Environmental Planning & Forestry Consultants, on the valuation of an area of woodland to be purchased as an extension to a crematorium. Here, woodland values were assessed by Carter Jonas, with the timber value assessed by Lockhart Garratt, using their expertise in assessing the productivity of the woodland.

John Lockhart comments: “It is important to know your oaks from your ash trees and also to have an in-depth knowledge of the timber industry, likely market players and also any tell-tale signs of disease, which our team are well versed to do”.

One of the most serious threats to our native broadleaves is the advancing impact of ash dieback. Many will have noticed the publicity around the work that Devon County Council have undertaken in the last few weeks to address issues of roadside safety. Sadly, going forward, we will only see this increase as the impact of the disease becomes ever more widespread and severe. In light of this, it is critical to understand your resource and ensure that management at least considers the impact and, if appropriate, action is taken to secure values. Ash is an incredibly versatile and strong timber, and is famously used as a core material for Morgan cars, a market which could return values in the region of £125/m³ as against £20/m³ for firewood.

Irish Hurling sticks are another important market, with values over £200/m³. Good knowledge of the scale and operation of these, and other timber markets, will be critical in ensuring that the impact of this disease is minimised and effectively mitigated.

Another critical factor is management. Growing crop woodlands requires effective management, however, given the timescale and cost, it is often neglected in competition with other priorities. In particular, we see many developing plantations where pruning is now critically required to secure their future timber values. The financial benefits are clear, with effectively targeted pruning operations resulting in increases in value between 5 and 20 fold. Why produce firewood when you can grow fabulous oak planking timber that will grace our lives for generations to come?

Understanding where to target your efforts and when it is critical to do so forms part of the suite of silvicultural skills that Lockhart Garratt can provide.

However, value now goes beyond simply timber. Woodland is broadly recognised as having a valuable impact on the widest range of ecosystem services, including flood prevention and alleviation, air quality, water quality, health and wellbeing, carbon sequestration, landscape, biodiversity, local climate regulation and public access to nature. As such, natural capital (the sum of our ecosystems, species, fresh water, land, soils, minerals, air and seas) and ecosystem services remain at the heart of government thinking, and form a key element of the proposed 25 year plan for the natural environment. However, these values are routinely understated and difficult to realise.

The 25 year plan notes that England’s woods and forests deliver services to the value of £2.3bn, with less than 10% of this relating to their timber value. This should make us look differently at the resource. Woodlands have not been viewed as an integral part of the commercial operation of rural property in the past, and this needs to change.

In summary, do you really know the value of your woodland? Is it really just that scrub on the edge of your holding, or is it worth more? If it is in poor condition, what can you do to increase its value through planting and carefully planned management? What other values does it hold and how can these best be explored and developed?

For more information, contact Jack Sharpe on 01223 326814 or jack.sharpe@carterjonas.co.uk

This case law, from April 2019, has implications for serving a Case B notice and gaining access to an agricultural holding for pre-planning and development surveys.

Obtaining vacant possession of tenanted agricultural property can be a major challenge for rural landowners when looking to develop a site. Determining the nature of any tenancy is the first step in understanding the strength of the tenant’s position. If the tenancy was granted after 1st September 1995 then, in all likelihood, the tenancy will be governed by the Agricultural Tenancies Act 1995, and the tenancy will end either on the final day of the term or upon the service of a notice issued at least 12 months ahead of the term date.

The Agricultural Holdings Act 1986 governs tenancies that began before the 1st September 1995. In such agreements, the tenant can benefit from lifetime security of tenure, and those holding agreements that began before the 12th July 1984 could benefit from two successions after the original tenant. Failure to acknowledge such tenancy agreements can have severe consequences when implementing a development scheme, and tenants often use their position to frustrate the development and secure substantial pay-outs.

The three most common ways of ending a 1986 Act tenancy are the negotiation of a surrender, the service of a Case B notice to quit under Part 1 of Schedule 3 of the 86 Act, and through a notice to resume part of the holding.

With a Case B notice, this allows the landlord to regain possession of the holding for non-agricultural use and is most commonly used when the landlord has obtained planning permission for a particular scheme. However, such permissions can be conditional upon surveys and inspections that, on occasion, need to be carried out prior to vacant possession being obtained by the landlord, and it is here that landlords can run into problems over their rights to access the property, particularly if such access is required to satisfy the planning conditions.

In the recent High Court case The Earl of Plymouth v Rees, the landlord had obtained planning permission for a substantial residential development that was conditional upon gaining extensive access to the tenant’s farm in order to undertake intrusive surveys to satisfy the planning conditions.

The landlords claimed an injunction to restrain the farmer and his son from interfering with the exercise by the landlords of their rights of entry as reserved by the two tenancy agreements in place across the 238 acre holding. The judge held that no injunction should be granted and ruled on a dispute as to the interpretation of the rights of entry.

In his judgment, Judge Keyser QC determined that the landlord’s rights to access the holding as stipulated in the tenancy agreements should be construed restrictively, and therefore did not extend to intrusive pre-construction surveys. In this case, the works included sinking boreholes, erecting structures and digging excavations. The judge did, however, hold that the rights of entry allowed the landlords the right to enter the farm for the purpose of inspecting and observing, and that this could include leaving behind wildlife monitoring devices.

Clear and transparent landlord-tenant relations can go some way to ease such situations and it is advisable that the Landlord’s team has thought through and planned the necessary steps needed to deliver vacant possession and such access as may be required. On occasion this may require early contact with the tenant to secure their agreement and ensure a smooth journey to a successful outcome.