Fisher German Newsletter Autumn 2016

Expansion for the Bedford office

Property experts and chartered surveyors Fisher German are expanding into new offices at Priory Business Park in Bedford.

The team at Bedford has recently been bolstered with new commercial property experts Mathew Brandon and Simon Warner who will offer commercial property agency and planning advice. The commercial team at Bedford can now offer valuable professional services in all aspects relating to commercial property. The team is led by well-respected Fisher German partner Simon Patrick.

Simon comments “it’s exciting times, we now have the size and experience in the team to really make a difference in Bedfordshire with regards to commercial property. The market is performing well at the moment and there is huge potential to help clients. Simon Warner is a chartered town planner and Central Bedfordshire Council are publishing their draft local plan at the end of this year. Simon will be reviewing this and informing clients accordingly.”

The rural team is already well established following Fisher German’s merger with Warmingtons last year. Sam Skinner, Jeremy Clayson and Matthew Ayres will continue to offer advice on core rural services including valuation, telecoms, land and farm agency, management, compulsory purchase and landlord and tenant matters.

Sam concludes “we now have 8 individuals in the team but I can quickly see this growing so we have moved into offices which can accommodate double this number and hope to fill it very soon. Bedfordshire presents some great opportunities and with the ongoing investment in our team we can offer excellent advice in the region.”

For further information about our Bedford office please contact Sam Skinner on 01234827114 or email him here

Autumn promotions

Fisher German Chartered Surveyors are pleased to announce a ream of new promotions within the firm which all take effect from 1 October 2016.

Richard Broome and Holly Parry have both been promoted to Partner. Richard Broome is managing director of the LinesearchbeforeUdig service associated with the utilities and infrastructure sector of the business. Holly is a rural surveyor, managing prestigious estates and carrying out general practice work. She also has a wider role in developing business strategy in the rural sector.

In addition to the two partner promotions, Tom Collins, a member of the planning team. and Louise Duffin, one of our rural team, have both been promoted to Associate Partner.

Seven individuals have also been promoted to Associate. These are; Jenny Salt, a member of the planning team; Laura Airton, Jack Healy, Evan Hughes and Simon Tivey who are all rural surveyors and Matthew Turner and Joanne Harding who are in the utilities and infrastructure team.

Senior partner Richard Sanders comments “the promotions draw people from a number of sectors, service lines and offices across the business and is an encouraging reflection of the continued growth and success of Fisher German. I congratulate all of these individuals on their well-deserved promotions and, on behalf of the partnership, I would like to thank them for their substantial contribution to the success of the business”.

New use for high quality office conversion

The Chester office recently completed the letting of a Grade 2 former Farmhouse. The 3,450 sqft property converted to high quality offices has very quickly found a new use as a Children’s Nursery which following some adaptation will be opening later in 2016.

The Hapsford Property received a lot of interest from a number of potential office users but ultimately the location was seen as an ideal opportunity for the Bannamoon Franchise to open their latest Nursery.

According to William Lewis, it is not unusual for potential tenants to find alternative uses for such properties. “When planning the Hapsford development with the client we tried to be innovative by converting the surrounding barns to smaller residential units and the Farmhouse to Office. This is a great location for an office but ultimately the market found an alternate use. Childcare is a thriving sector, aided by the Governments Tax Credit System. This is the second Nursery we have let in the Chester area over the last 6 months. We are frequently receiving enquiries from people looking for potential nursery sites. Location is key. The new Bananamoon Nursery is located close to the M56 close to a number of good size towns/ villages and is in a convenient location to commuters.

If you are struggling to let your premises, whether it is office, retail or industrial Fisher German would be happy to provide you with an appraisal. The best achievable rent or capital value for a property may lie in an alternative use and with our in-house Planning and Development experts, along with the expertise of the Commercial team, Fisher German are best placed to realise your property’s potential. Within our wide reaching database and vast range of contacts, we may already know the right person for your property.

For further information about this project, contact William Lewis on 01244 409671 or email him here

Agricultural Property Relief

Whilst Inheritance Tax counts for less than 1% of the Government’s tax income, it is also one of the most contested taxes due to the reliefs that are currently available. Of those reliefs, Agricultural Property Relief is probably the most contentious, as investors have increasingly sought safe haven in agricultural land and property contributing to strong agricultural land values. Most of us will have heard of the large tracts of Lincolnshire bought by the Dyson family in recent years (other vacuum cleaners are available!).

In our experience HM Revenue & Customs (HMRC) are now routinely challenging the majority of applications for Agricultural Property Relief. However, due to lack of resources both at HMRC and the Valuation Office Agency we are experiencing a significant backlog in assessment of Inheritance Tax property values of circa two years from the date of death; in addition novel areas of challenge by HMRC are being seen on a regular basis.

We have recently been involved with a case where HMRC argued that unless a farmer can demonstrate that crops end up in the human food chain then the use of the land is non-agricultural. This clearly creates enormous difficulty where for example grass is mown for hay and is sold to a fodder dealer. Unless the fodder dealer could demonstrate that the hay is then sold on to purchasers for feeding only to agricultural animals then HMRC argued that this was not part of the human food chain.

A similar situation could apply with, for example, combinable crops sold to a merchant and the merchant subsequently selling on to a horse feed manufacturer. It also raises significant issues for any non-agricultural crops, for example those grown as an aerobic digester feed stock. The case is not yet agreed with HMRC but it is unlikely that they will pursue this point through the Tribunal.

HMRC are also challenging an application for Agricultural Property Relief on a small farm with modest income where, due to the relatively poor quality of the land and soils, the majority of the farm’s income is made up of Basic Payment and Stewardship Scheme incomes. HMRC have sought to challenge this case on the basis of the level of sales for the business, implying that there ought to be some form of minimum farming standard and level of profit. In the current agricultural climate, small farms such as this are doing well to generate a profit at all and their reliance on subsidies will come as no surprise to those in the industry. This does not make the holding any less suitable for Agricultural Property Relief and the only recognised test in this regard is whether the business was one of trade with a clear intention to make profit or not.

Even in cases where Agricultural Property Relief is allowed in principle, HMRC seek to restrict the relief available to agricultural value, looking for deductions to any parts of the property which they believe have any amenity value over and above the basic agricultural value. This clearly has significant implications for land and farms close to our towns and cities where elements of the valuation may well be attributed to their amenity.

Those of us who are Registered Valuers work hard at preparing comprehensive, accurate Inheritance Tax valuations which are robust and capable of scrutiny by HMRC. We are aware of the recent comments of one particular member of the Valuation Office Agency who advised HMRC via email (inadvertently copied in one of our valuers) that “I have not yet looked at this file in detail or inspected the property but it appears to me that the values reported are a little high.” How they ascertain that without looking at the file in detail or inspecting the property is beyond us!

It is clear from our experience that HMRC are under pressure to deliver as much tax revenue as possible from Inheritance Tax and they are seeking to challenge applications for Agricultural Property Relief for all sorts of reasons. Good professional advice is required as to the strength of an individual case, but those appointed as Executors should not be afraid to take a robust stance with HMRC if a case warrants it.

There has been much debate in recent years as to the future of Agricultural Property Relief, however we believe it is unlikely to be a priority for the current Government to drive through changes to relief available for a tax which generates a relatively small proportion of annual tax income, an even smaller proportion of which relates to agricultural property. In any event, should Agricultural Property Relief come under fire, for many Business Property Relief unless reformed as well, could offer a viable alternative. The opportunity for a significant increase in Government income is limited.

For further information, contact Richard Scriven on or email him here

National Country Agency Team

Stuart Flint Alasdair Dunne

"It's not all about what you know,

but inescapably it's about who you know"

Some higher value and more complex properties such as farms, estates and larger country houses require a rather different approach.

The National Country Agency Team (NCAT) has been established to add value to the excellent work done by our rural and residential agency teams and in response to the needs of our clients. The NCAT already has an enviable track record in generating exceptional results.

The team is led by Stuart Flint and Alasdair Dunne who work closely with colleagues in Fisher German office across the country. Their wealth of experience and impressive list of contacts puts them within reach of the largest number of potential buyers.

"Higher value and more complex properties benefit from decades of broad-based experience. Technical expertise is coupled with rare insight into the market and the myriad of factors that combine to influence sales at the upper end of the market."

If you feel that your property sale might benefit from the expert insight of the National Country Agency Team, contact them on 0207 870 7799

Click below to find out more about NCAT

Two major development sales

The hunger for new homes is still alive in Derbyshire as two major development sites are sold in the county.

Two house builders have purchased sites in Crich and Linton in a pair of multi-million pound transactions.

Leading development agency Fisher German acted on behalf of a private landowner and land promoter Gladman to sell a site in Crich with planning permission for 113 homes to builders and property developers Harron Homes.

The firm also acted on behalf of Gladman and another private landowner to sell a site in Linton with planning permission for 84 dwellings to house builder Strata.

Ben Marshalsay, Partner, said: “These are two major developments which were both sold within in a relatively short space of time.

“Despite a little uncertainty in the market, these were both smooth transactions thanks to our local knowledge combined with our market expertise and show that there is still a hunger for homes in Derbyshire.

“The two sites are in well-regarded locations and are both facilitating much-needed homes in the area.

Local demand

“There is currently a demand for homes in countryside locations that benefit from good amenities and are commutable to nearby cities. Both Crich and Linton allow residents to live a country lifestyle while still being within a short distance from Derby.”

Both of the Yorkshire building firms were eager to purchase sites which would help meet the need for new homes in Derbyshire.

Paul Robinson, from Strata, said: “Work has started on-site in Linton and homes are due to be available from June 2017. The development will feature 84 homes in total, which are predominantly three and four-bedroom suitable for families.

“There is currently a real demand for homes in Derbyshire, particularly in south Derbyshire, so this was a very attractive site. We are just completing a development a few miles away so this is a continuation of that and should provide essential housing for the area.

“We are keen to create communities in areas that are attractive to both first time buyers and families that want to purchase their forever home. We lead by design and find it very encouraging to see the continued demand to purchase houses from plan.”

Katie Charlesworth, from Harron Homes, added: “Crich is a pretty village on the edge of the Peak District and is a very popular location for families.

“Work has already begun on the development and we expect the first homes to be released for sale around late September.

“We were very pleased to purchase the site in Crich which will mainly feature executive four and five bedroom detached homes in a wonderful countryside setting with excellent commuter links.”

For further information contact Ben Marshalsay on 01530 567465 or email here

Renewable energy business rates

Renewable energy installations are anticipated to be hit with significant increases in business rates from April 2017, with rates for commercial solar rooftop installations set to rise by between six and eight times above their current levels.

The Valuation Office Agency (VOA) are responsible for the valuation of power generating sites in England and Wales (including all renewable technologies) and are currently carrying out a revaluation of business rates. New rateable values (RVs) will be set, and these will be used to calculate business rates from April 2017 up until 2022.

Renewable energy installations which operate as a commercial venture are liable to pay business rates, unless they are less than 50kW in size, part of an agricultural building (where the energy is used on site) or classed as a small business or charity. The RV is normally calculated on a receipts and expenditure approach because the value of such properties is very closely related to their ability to make profits.

The VOA’s model for the current 2010 revaluation (1 April 2010 - 31 March 2017) uses a valuation date of 1 April 2008. Feed-in Tariffs (FiTs) and the Renewable Heat Incentive (RHI) were not available at this time and instead the market was driven by Renewable Obligation Certificates (ROCs), Climate Change Levy Exemption Certificates (LECs) and Non Fossil Fuel Obligation contracts (NFFOs) which consequently informed the VOA’s RVs. RVs currently work out at approximately &8/kW for solar projects and around &25/kW for onshore wind turbines, but these figures can vary greatly between projects.

Revaluation changes

In the upcoming 2017 revaluation the VOA are anticipated to alter the way in which they value renewable projects, to reflect how the capital costs and subsidies have changed since the last valuation date. Solar installation costs, for example, have fallen around 80% since 2008 and the subsidy landscape has undergone enormous change during this period with the introduction of FiTs in 2010. Two valuation methodologies are being proposed for solar PV.

Firstly where electricity generation is intended mainly for export (eg solar farms), the methodology will reflect the specific subsidy received and as subsidies and costs have fallen over the past years, this should be fairly reflected in the resulting RV.

Secondly for projects where a large proportion of the electricity is used within the building (eg self-owned commercial rooftop projects), the RV could now be calculated under the ‘contractor’s basis method’, meaning that the installation would be treated in the same class as other machinery owned by the business.

Implications

Dan Thory of Fisher German comments, “the resultant RVs would represent the capital costs of the install spread out over the lifetime of the system. For example, a 100kW rooftop system RV (currently around &8/kW) could increase to &55/kW, pushing the annual rates demand from &398 up to &2,734 (a seven fold increase)”.

He continues “this will have serious implications for up to 23,000 non-domestic PV roof installations between 10kW and 5MW, affecting businesses, local authorities, schools and hospitals. The proposed RVs for such projects will not reflect current FiT levels and projects which have been installed since the major solar FiT reduction in February 2016 could see their lifetime return on investment reduced to near-zero. Furthermore there would be little incentive for any future rooftop solar deployment”.

The RVs for ground mounted solar, onshore wind, hydro, biomass and anaerobic digestion projects are also anticipated to rise in the VOA’s revaluation, with projects built before 2012 seeing the highest increases. Planned changes are due to be published in draft on 30 September 2016.

Small Business Rates Relief

If you feel that your business rates have been incorrectly or unfairly calculated by the VOA, it may be possible to apply for small business rates relief (SBRR) or in some cases, appeal to the VOA. Darren Edwards, head of the firm’s Sustainable Energy Sector comments: “we are being contacted by a fast-growing number of existing and new clients asking us to assess the accuracy of the business rates levied upon them. We are finding the VOA’s current generic approach to ratings often does not account for the high number of project by project variables thus leading to an incorrect RV. We have had some good success challenging the VOA”.

Further information

For further information or advice please contact Dan Thory 07880 389578 or email here or Darren Edwards 07918 677571 or email here

French connection

Project Background

The Interconnexion France-Angleterre (IFA2) is being developed as an high voltage direct current (HVDC) link between the French and British transmission systems. It will be capable of transporting at least 1000MW providing power for up to 1 million homes and businesses.

Two HVDC submarine cables will be buried within the seabed, running across 204km between Great Britain(GB) and France. The cable will connect to the GB transmission system at the existing National Grid Electricity Transmission (NGET) 400kV Chilling cable sealing end compound (see the plan above).

IFA2 is at a mature stage of development, with the planning application submitted. Once completed this will be the second link to France following the commissioning of IFA in 1986.

National Grid (NG) Land Business Support

NG Land and Business Support have been contracted by the project to provide the onshore GB land rights to deliver the project, which can be categorised as follows:

1. Acquire permanent land on which to build the converter station with associated access, drainage and service rights
2. Provide temporary land to facilitate the building of the converter station
3. Deliver easements for onshore DC cable route
4. Deliver easements for the onshore AC cable route

Fisher German’s Role

Instructed as an external land agency service, Fisher German initially produced an optioneering report, which assessed various sites. Further review allowed for the optimum converter station site to be identified and cabling routes established. Significant work had been undertaken in identifying potential converter station locations. Two sites, Chilling and Daedalus, were chosen for their environmental and technical feasibility.

Fisher German are responsible for the following parts of the lands elements of the project:

A full review of all potential converter station sites which meet the land criteria specification

Diligently locate any suitable land for further review by the project team

Provide a report detailing all the sites, commenting on pros and cons against the criteria referenced with a plan. Commentary is also required on planning and environmental designation.

Referencing
Identify the individual landowners, occupiers and any third party rights over land (including mortgage lenders and any other relevant parties).
Collate findings within a Book of Reference with associated land plans.

Provide Access for Surveys
Ensure that appropriate means of access and egress are available to enable completion of all required survey works; payments made in line with NG’s Land Rights Strategy.

Negotiate Legal Rights via Option Agreements
Secure voluntary rights for all onshore cable easements and access in accordance with NG’s Lands Rights Strategy to be delivered by an agreed programme deadline.

Settlement of Compensation Claims
Following completion of the works on site, negotiation and agreement of compensation claims submitted by owners and occupiers.

For further information, please contact either Matthew Hodgetts on 01905 459432 email here or Samantha Jones-Davies on 01905 459424 email here

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