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FOREWORD
spring / summer 2017 | aspects of land | 3
T he clock is now ticking on two years
of negotiations leading up to the UK’s
departure from the European Union.
For more than 40 years, EU regulation has
governed our trading relationships, the way
business operates and the environment, and
it has been the basis of significant investment
decisions. Few doubt the scale of the
challenge ahead.
However, those of us running rural businesses
need to cut through the noise and focus on the
fundamentals. Business people are pragmatic.
Economies are must keep our
eye on the opportunities, while resilience and
adaptability must be our watchwords.
Lots of companies that were initially
negative about Brexit are now starting to
see how it could be good for business.There
is scope for deregulation outside of the EU,
helping to boost business competitiveness.The
Bank of England has admitted it got its pre-
referendum forecasts wrong. Earlier this year,
the FTSE 100 saw its longest winning streak
ever. A weaker pound presents opportunities
for tourism and leisure businesses: a record
number of tourists visited our countryside over
the last year. And we have seen retailers and
supermarkets starting to source more from
British suppliers as import costs rise. More
fundamentally, the UK remains a safe haven for
investment, politically stable and with strong
credentials for property ownership. Farmland in
particular is a good investment, with a scarcity
of supply likely to underpin values in the
medium to long term. Farm support has been
guaranteed until 2020 and the government’s
commitment to build a million new homes by
then is further good news for landowners.
Of course, there are challenges ahead. UK
agriculture is less productive than in many
other advanced economies and the top 10 per
cent of our farmers are twice as productive
as the bottom 10 per cent.Without subsidy,
many farming businesses simply won’t survive.
It is difficult to envisage current levels of farm
support continuing post-2020 and we need to
get match-fit, ready to compete and trade in a
global need to move from a
supply chain to a value chain, where farmers,
processors and retailers work better together.
We need to develop new skills and new business
models. As well as being open to alternative
land uses: forestry is an increasingly attractive
enterprise, particularly on marginal land and
there are emerging opportunities to monetise
the public services which landowners provide
in terms of water catchment, biodiversity and
carbon sequestration.
The cost of borrowing remains at rock
bottom and we should take advantage of this
to re-orientate, invest and adapt. Our research
shows that over the last 15 years, diversified
income on rural estates has almost doubled
as a proportion of overall income.Those with
a range of assets and income streams are in a
much stronger position to weather the changes
to come.The ever-competing demands on land
and the sheer range of land-based enterprises
– from food to energy production – offer
landowners the opportunity to spread risk and
maximise returns, whatever the outcome of the
Article 50 negotiations.
Philip Gready
Head of Savills Rural
020 3107 5470, ANDREW RAWCLIFFE / ALAMY
WELCOME
“BUSINESS PEOPLE ARE
PRAGMATIC. ECONOMIES ARE
DYNAMIC. WE MUST KEEP OUR
EYE ON THE OPPORTUNITIES,
WHILE RESILIENCE AND
ADAPTABILITY MUST BE
OUR WATCHWORDS”