Entering 2018 with a Positive Attitude
Louis Fell comments on the outcome of 2017 and discusses what 2018 has in store for the rural sector.
2017 has been a mixed year in the rural sector. We’ve seen prices generally slowly rising over the past 12 months, with most becoming higher than a year ago, but nothing that would allow significant spare funds for investment. The exchange rate has certainly helped with the BPS payments for this year, but not so on the machinery prices which continue to rise beyond all levels of affordability. Our new agricultural minister, whilst controversial, perhaps is providing some clearly guidance and steer on his perceived future for the industry; we’ve had a small victory for common sense on glyphosate use and I’m pleased to see European grant money coming forward, let’s get it used up and spent before the split from Europe.
I’ve been asked many times this year if land prices are going to come down; whilst many may like to preach the doom and gloom, we are not really seeing it. Yes, poorer land without amenity value is struggling, but in reality what we are ending up with is a market which pays a higher price for good quality, no black grass, well equipped and location driven farms and estates. This is demonstrating that investment and maintenance does relate back to capital value, rather than just short supply – pushing up prices irrespective of quality. Do I think that prices are going to slide? Not really – unless there is change in capital taxes or the housing market slows down. There is still a good deal of roll over money, inheritance tax and overseas investors seeking long term investments, either as tax savings or simply people looking to own a part of England and their own plot of land.
Development in Yorkshire is vibrant at present – we are seeing massive expansion in warehousing and commercial property, often outstripping residential values, particularly on the M62 corridor; perhaps the Northern Powerhouse will happen without interference from the south. Coupled to this is the growth in housing; although it is a shame that all schemes get dragged down a slow and laborious planning process, with everyone attempting to seek a reason not to do this.
I am very optimistic about the future and 2018, hoping that the wider public will take a more positive approach and create a more positive atmosphere relating to the current situations. There are some great farming/rural businesses in Yorkshire along with many opportunities for those seeking new incomes/businesses, however an open minded approach is needed for those that are look for the new techniques or ventures that seek to protect the business in the future. Rural businesses need to look at those sectors that are not heavily reliant on subsidies and are expanding on the back of quality production and processing; having different streams of income from different businesses which reduce a reliance on the brown envelope payment and we feel should be your focus (if not already) in 2018.
For more information regarding the rural sector, please contact Louis Fell on 01665 511995
From everyone at George F White, we wish everyone a prosperous 2018