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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

dynamic.We

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

marketplace.We

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,

pgready@savills.com

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”