Exciting updates from the Central Midlands Team

The sands of time

The recent announcement in the Autumn statement that the Government intends to invest a further &23 billion in the next five years is likely to lead to further increase in demand for building materials, and aggregates in particular. This will be on top of the growth in aggregate demand seen in the last three years which has seen consistent growth in volumes as the economy has climbed out of recession.

Last year saw sales increase by 4.2% for aggregates whilst volumes of ready-mixed concrete in Great Britain improved by 4%, compared with 2015, and a 4.6% increase for mortar. Asphalt sales remained broadly flat (+0.1%). This is despite the growth in the use of recycled aggregates which has now reached almost 30% of the market.

At the same time mineral planning authorities have been consistently struggling to achieve their seven year land bank requirement under the NPPF for sand and gravel reserves. Many Counties have outdated mineral plans which are in the process of being reviewed and this has presented opportunities for new sites to be allocated.

Replenishment rates for sand and gravel (the ratio of new consents against volumes extracted) has been running around 0.5 for several years now, with very few new sites coming forward during the recession as operators reduced their investment and consolidated.

This position cannot be sustainable and joint working by our minerals and planning team has recently seen a significant new sand and gravel reserve allocated on the back of this shortage – the only such new site in the whole of the County in question. This was achieved despite the initial draft plan having identified another site, a decision which we managed to overturn through highlighting the merits of our clients site and its deliverability.

There is also potential for mothballed and dormant sites to come back on stream including those with limited volumes as the growth in the number of smaller, independent operators in the market has meant that many of these can be made viable by these new operators in the market. These operators will commonly combine a recycling operation with mineral extraction, providing added income streams for all involved.

For further information or discuss mineral opportunities, please contact William Gagie on 01530 410859

Holding back the flood

In 2016 Fisher German were instructed to provide strategic property advice to the Allendale Estate in Northumberland. Allendale is a family run, traditional land estate that has been owned by the Beaumont family for over 200 years and comprises of a mixed portfolio of farmland, forestry, residential and commercial assets.

Parts of the Allendale Estate were badly affected by Storm Desmond in December 2015. This involved damage to historic residential and commercial property through the flooding of the River Tyne.

Fisher German were asked by the Estate to look into potential solutions to deliver increased resilience to flooding. With significant experience in flood risk management matters and a long relationship with the Environment Agency to help deliver flood alleviation schemes, we were an obvious choice to provide advice on this complex matter.

It was anticipated that the Estate would need to pay for all works and permissions and any grant funding would only cover property level resilience works such as flood boards, airbrick covers and non-return valves for foul sewer pipes. Such works are often helpful for properties at risk of flooding but in this instance were of very limited benefit and it was preferable to deliver a community wide flood risk management scheme.

Through assessing the impact of the flooding in 2015, utilising our knowledge of flood risk matters and the potential sources of grant funding, a plan has been put in place to deliver a comprehensive scheme to improve the flood protection to 14 residential properties on the Estate. In addition, much of the initial survey works and construction costs will be eligible for grant funding which Fisher German are in the process of applying for.

For further information, please contact Guy Hemus on 01530 410890 or email here

Fighting for Farmers

Fisher German Farm Business Consultants were asked by a national land owner to assist and advise on historic Single Farm Payment penalties which were applied following a Rural Payment Agency Inspection for an apparent over declaration and Cross Compliance breach their land.

The RPA inspection took place in 2013 and the Inspector reported that some of the land, which was reclaimed but was being farmed, was not eligible and breached GAEC 12 ‘Agricultural Land that is not in Production’ as per the requirements of the Single Farm Payment Scheme.

Some of the disputed land had previously been a landfill site and an open cast mine. The land had been restored, as per the planning requirements, to a species rich grassland and had been drained. The landscaping had been partially completed and as the site had not yet been fenced the grass was being cut for silage and hay rather than used for grazing livestock. At the time of inspection there were silage bales still stacked in the field.

Based on the Inspector’s report, the RPA removed the land in question from the 2013 claim which immediately triggered an over declaration for that year. In addition to this they removed the land from the previous year’s claim and applied penalties back to 2010.

The resultant overpayment and penalties generated a fine in excess of &80,000. This was disputed at the time but the RPA were adamant that the land was not eligible and the penalty would apply. Fisher German were then instructed to handle the negotiations and entered long and protracted discussions with the RPA over the interpretation of ‘eligible land’ and use of the land in question. The RPA withheld the 2013 and 2014 Single Farm Payment and part of the 2015 Basic Payment as part of the recovery process.

In 2016, Fisher German were successful in challenging the detail of the penalty by providing evidence to prove that the land had been farmed in accordance with Single Farm Payment requirements and was eligible. The challenge against the Cross Compliance breach relating to GAEC12 was partially successfully but the RPA still upheld their earlier ruling on some of the land which resulted in the overall fine and recovery from the RPA being reduced from &80,000 to &15,000.

As a result of the previous inspection outlined above, the Claimant was regarded as being a ‘Risk’ by the RPA and was then subject to a further inspection in June 2016. The Inspector again reported that some of the land was not eligible and when challenged on this the alleged breaches and non-conformities were found to be spurious and the 2016 BPS was paid in full.

For further information or help with matters relating to the Basic Payment Scheme please contact Tom Heathcote on 07918 628983 or email here

Young Surveyor of the Year

The Central Midlands Rural Team, based in Ashby de la Zouch were made proud in November by the win of the coveted Young Surveyor of the Year (Rural) by team member Carl Pearson.

Carl was joined in the final six by colleague James Boddington with both competing for the top prize.

In 2015, Emanuel Skelton, also a member of the Central Midlands Team was a finalist and despite not winning was highly commended by the Judges.

The quality and professionalism of these young surveyors in the department really demonstrates that at Fisher German we attract the best and keep best of industry for the benefit of our clients.

Carl’s enthusiasm for the profession, coupled with his innvoative mind and attention to detail is a real credit to him. In his early career Carl has been involved with traditional estate management and a wide range of professional work including valuations and compensation in the North East of England before a move to Leicestershire just over a year ago.

For further information, please contact Carl Pearson on 01530 410688 or email here

Hydro Electric

A 29kw hydroelectric scheme has been installed on the Brackley Burn, a tributary of the River Dee, Aberdeenshire. The project has been undertaken by the Glenmuick Estate is a traditional sporting estate which has diversified into holiday lettings and a deer farm supplying local butchers.

Over the past 36 months the Estate has developed several renewable energy schemes which sell heat and electricity to third party businesses and the National Grid. The schemes have created diversified income within the existing portfolio which is in line with the client’s long term objectives.

In 2014/5 an initial feasibility study for a hydroelectric scheme was carried out on the Brackley Burn with a project value of circa &150,000. The scheme is looking to produce 100,000 units of electricity - enough energy to meet the Estate's current demand for the holiday cottages, main house which sleeps 20 people, workshop facilities, deer larder, electric deer fences, biomass boiler and associated district heating network.

Fisher German prepared the tender documentation for the scheme which was sent out to several firms in the North of Scotland. Tenders were reviewed, references followed up and the client selected a small firm who have had track record of delivering schemes from conception to completion. Fisher German worked with the chosen firm to secure planning within a National Park which was with significant challenges along the way. An abstraction license was obtained with the consent of Deeside Fisheries Board and SEPA. An abstraction license is required as the water used is leaving the river channel, being processed through a mechanical machine and being discharged just over 100 meters downstream of where the water is being extracted from. We were successfully granted planning consent and an abstraction license in September 2016. Pre-accreditation was submitted by Fisher German in October and was signed off by OFGEM on the 29^th December 2016.

Subject to build costs we expect an 11% return taking into account electricity savings.

Fisher German have been in close contact with the firm delivering the scheme and a start date has been agreed for May. Works on site are expected to take 10 weeks and Fisher German will project manage the build. In addition, the Estate are proposing to install a private electricity network to their properties within the vicinity of the scheme. The private network will make use of the electricity produced which will be re-charged to tenants at an enhanced rate.

The scheme will be fully functioning and contributing to the Estate by June 2017. For further information, please contact Ian McKenzie on 01530 410824 or email here or visit the Estate's website here

Letting Fees

Following the recent decision in the Autumn Statement the government is now consulting on whether to ban letting agents’ fees to tenants, to improve competition in the private rental market and give renters greater clarity and control over what they will pay.

The Department for Communities and Local Government (DCLG) will consult ahead of bringing forward legislation and a further announcement will be made once the outcome of those consultations is made public.

For clients owning residential property we will be looking very closely at what this will mean. Undoubtedly there will be a greater push on recouping some of those costs and one such way may be by increasing rents. This will not be welcomed but in the short sighted attempt by the government to cool the buy to let market property owners cannot afford to allow returns to keep falling.

The consultations will take some time to complete and we will keep close to this proposed and unwelcome change. It is anticipated that an outright ban would take between 12-18 months to come into effect so there will be time to provide a measured assessment of how this will impact on our residential property owning clients.

We will continue to keep close to developments in this area and further announcements will be made in due course as to what this may mean to our clients. For more information, please contact Neil Hogbin on 01530 410841 or email here

With Royal Assent

Phase 2b – The route from Birmingham to Leeds had safeguarding directions issued on 15 November 2016. The safeguarded route does contain some amendments to the initial proposed route, including amendments around Measham and East Midlands airport. Consultation is open on these amendments until 09 March 2017. Anyone wishing to put forward representations should do so before this date.

Safeguarding has unlocked the potential for residential property owners, occupiers of agricultural units and occupiers of commercial units with a rateable value of less than &34,500 to serve a blight notice on HS2 requesting them to purchase the property. There are a number of eligibility criteria for submission of a blight notice. If a blight notice is successful, property owners are entitled to make a claim to include the un-blighted Market Value of the property, home owner payment or basic and occupiers loss payment, professional fees and removal fees.

Property compensation schemes for HS2 Phase 2b are currently under consultation. The consultation period ends on 09 March 2017. The proposed schemes provide for different compensation schemes within certain distances from the centre of the line. These include the Rural Support Zone which typically covers properties within 120m of the line in rural areas and where the line is not within a tunnel. Residential property owners within this band would be eligible to request HS2 to purchase the property at the un-blighted Market Value. Between 120m and 300m is the homeowner payment zone where property owners would be entitled to claim a one off payment depending on the distance from the line. An announcement on the opening of the schemes and further details is expected later in 2017.

For those property owners not within the safeguarded or proposed Rural Support Zone, who have a compelling need to sell their property which would result in hardship within 3 years if the property couldn’t be sold, an application can be made to the Need to Sell scheme requesting that HS2 purchase the property at its un-blighted value. There are a number of criteria which must be met to apply for this scheme, which includes offering the property for sale on the open market for a minimum period of 3 months.

On 23 February 2017 the Hybrid Bill for Phase 1 of HS2 obtained Royal Assent. This gives the go ahead for Phase 1 only and the same procedure will need to be gone through for both Phases 2a and 2b. The Hybrid Bill does however contain provision for HS2 to be able to serve notices for survey access on Phases 2a and 2b. Surveys are likely to be undertaken not only within the safeguarded route, but also on adjoining land and woodland. Property owners may receive contact from HS2 with a view to agreeing access licences. In both cases property owners are advised to obtain professional advice.

For further information or advice in connection with HS2 please do not hesitate to contact

Helena Tibbitts MRICS FAAV on 01530 410820 email here

John Ikin 01530 410814 email here