Just as we started to think we understood what Brexit might mean for UK farming, the result of the elections in America has put us back into a world of disbelief and huge uncertainty.  This uncertainty will be treated with concern by some but others may see the inevitable changes as an opportunity.

Many farm businesses are enjoying a brief period of improved margins, but the influence of a weak sterling after Brexit has had an immediate positive influence on output prices whereas the equivalent effect of increased input prices had not yet impacted.

Our views on the likely effect of the UK exiting Europe were broadly as follows:

• Subsidies will be reduced and refocused to target the wider environment (not just conservation) and areas of the UK which require subsidy to be sustainable e.g. hill farming.
• The availability of willing and low-cost labour will be dramatically reduced.
• We will have a more direct exposure to world markets.
• It is highly likely that UK agriculture will be used as a bargaining chip to secure trade deals for areas of the UK economy seen as more important by Government.
• The positive effect on farm prices of a weaker sterling will continue but this may be diluted by an even weaker Euro.

Now, with Donald Trump as US President in 2017:

• Europe is very vulnerable and may not exist as an organisation for the UK to exit from.
• The trade treaties that are currently in place are now in play and the US’s attitude to future deals will be far more protectionist.
• This will make world trade more complex, more expensive and less reliable.
• This may actually help UK Agriculture in that food security and reliability of supply will start to become a far more important issue for our Government and for domestic consumers.
• Added to this, the growing consumer interest in food quality and provenance should lead to a far greater reliance on UK produce, especially in fresh food and quality products.

So how should UK farmers react to this outlook:

The current ‘typical’ farm business where the farming activities roughly break even and the business owners effectively live off subsidies will have to end.

Businesses will either produce world traded products at the lowest possible cost of production by achieving sufficient scale or specialise in identifiable quality, retaining more of the available margin in the food chain.

Those businesses that choose to achieve cost savings through scale must invest in the correct technology to reduce input usage – much of the current increase in fixed costs for farmers is caused by investing in expensive technological improvements that we don’t need.  Future investment must lead to reduced variable inputs use.

Benefits of scale can be achieved through contracting out to larger operators but these operators must themselves be large enough and technically proficient; using technological advances to reduce costs for all parties.  Those businesses that choose to build profitability by specialising and retaining more of the margin available in the whole food chain will, we think, benefit from a greater demand for home produced food and a willingness from consumers to pay for it.

Whilst subsidy receipts for many will reduce, for others they may increase.  Out of Europe, the UK Government will be looking to target subsidies to deliver measurable benefit such as flood mitigation, water quality and sustaining rural communities.  They will also be looking to reduce the cost of administering the subsidy system and have already suggested that farm businesses will be able to benefit from a Gold Standard which will result in fewer inspections.  The Gold Standard will be achieved by audited membership of existing assurance schemes.

Our advice to farming clients to prepare for Brexit and the changes in America includes:

• Decide whether the business should focus on production of basic commodities at world prices or specialise in high value specialist products sold direct to end user.
• Plan for a substantial reduction in subsidies.
• Aim to reduce costs wherever possible.
• Use technology and efficiency to reduce input costs and labour.
• Benchmark to assess where improvements can be made.

Osmaston Park is an entirely private wedding reception venue, situated just outside Ashbourne at the Southern tip of the Peak District. Set within beautiful and dramatic surroundings of 3000 acres; the site caters for weddings, private functions and corporate events.

Since Osmaston Manor House was demolished in 1965 the site had laid dormant. The owner after getting married in the village church of St Martin’s wished to have the reception on the Manor site, the event was a huge success and inspired the creation of a wedding venue for others to enjoy.

In 2009 works started to uncover the Manor site after 44 years of neglect. After several grass mower blades! the grassed terraces were restored to their former glory, ponds were cleaned out, stone steps cleared and re-set and balustrades restored - the site was ready for the first paying customers. Fisher German advised the Estate in respect of the planning consent required for change of use and were successful in gaining permission from Derbyshire Dales for a temporary marquee on the listed Manor Site.

The Marquee can accommodate 500 people with associated car parking and helicopter landing should you wish to make a spectacular entrance! The site has grown since its initial offering and now caters for 40 weddings a year, 2 wedding fayres, private parties, charity and corporate events. In addition, the Estate is currently considering creating holiday cottage accommodation for wedding parties, guests and holiday makers.    

Osmaston Park works in conjunction with Top Marquees UK who erect the marquee and assist with the clearing up and preparation for the next wedding when there are back to back weddings. Weekly tasks on site are maintaining the grass cutting, raking the paths and keeping on top of any litter.

Advertising is undertaken through a bespoke website, online advertising and the wedding fayre, which, held twice a year attracts approximately 5,000 people to site.

“We are now seeing a number of people booking the site after attending a wedding as a guest” commented the owner “we believe recommendation through word of mouth and providing a first class service are key to future bookings.”

2016 has been the busiest year for the wedding site to date and this trend looks like it is set to continue with a wedding deposit in the bank for 2020!

For further information contact Ian McKenzie on 01530 410824 or email here

http://www.osmastonpark.com/

Landlords: Are You Compliant?

The residential lettings sector has been subject to many recent and upcoming changes that could have a significant impact on Landlords.

If there was a time where re-decoration upon a Tenant vacating was enough to be ready for a new letting, things have moved on rapidly.  Tenants expect more and not only that, legislation requires more. 

Below we highlight just some of the issues that need to considered:

Energy Performance Certificates (EPC)

In order to let a property, it must have an EPC.  The Energy Act 2011 introduced new regulations to improve energy efficiency, by imposing restrictions on letting where a property falls below a specific band. Landlords can no longer unreasonably withhold consent to a Tenant’s request to carry out energy efficiency improvements where funding is available to do the work. In addition:

• From 1 April 2018 - A property that does not meet the minimum energy efficiency standards cannot be re-let on a new tenancy.

• From 1 April 2020 - A property that does not meet the minimum energy efficiency standards cannot continue to be let on an existing tenancy.

It is good practice to know the current EPC ratings of your property portfolios.  This allows budgeting for the energy efficient measures that are required to bring the property up to standard.  Taking advantage of vacant periods staggers the works and completes it ahead of deadlines.

Health & Safety

We are seeing increasing levels of responsibility being placed upon landlords and some of the key things to bear in mind are:

• Landlords annual gas safety inspections
• Compulsory fitting by landlords of smoke and carbon monoxide alarms
• Electrical safety
• Chimney sweeping
• Legionella risk assessments

Deregulation Act 2015

The Deregulation Act sets out measures to prevent retaliatory eviction.  A section 21 notice is normally served to regain possession within two months where the initial fixed term of a tenancy has expired.  The Act states that the notice will not be valid where a Tenant has made a compliant in writing regarding the condition of the house.  That compliant must be dealt with adequately.

Regular maintenance inspections give tenants the opportunity to raise concerns over the condition of the dwelling and for repairs to be actioned.  Ensuring that these are carried out helps to manage the risk and retain the flexibility associated with Assured Shorthold Tenancies.

The requirements upon letting agents and landlords to provide certain information to existing and new Tenants is also increasing.  Failure to provide items such as Tenancy Deposit Certificates can invalidate a section 21 notice.  The Government’s new “How to Rent” guides should also be provided. Click here

If you have any queries regarding compliance or strategy planning for the future, please contact:

Rob Browne on 07501 720418 or email here

Laura Airton on 07880 191685 or email here