Review of a Roller-Coaster Year - Thomas Armstrong, Director of H&H Land & Estates, shares his overview of the farm and land market through a turbulent 2020.
Even though the days may have felt long at times, the year 2020, has most definitely flown by. For H&H Land & Estates, 2020 has presented more than a few bumps in the road, but they have been met with creativity and commitment and we have ensured that the service to our land based clients could continue largely unhindered. It has been a big year, with a number of firsts, including the first ever “socially distanced” on-farm public auction in July of Dove House Farm. This was a resounding success and still proves to be the best and most efficient approach for selling the right type of agricultural assets.
At the turn of the year, the market was strong and has since remained so. In the first half of the year we brought to market a 230-acre former dairy farm to let on a Farm Business Tenancy, this along with the traditional grass letting season delivered healthy results and numerous tenders. Spring saw a large amount of land coming forward, and the strength of offers for next year’s grazing season gives us confidence looking forward.
The Countryside Stewardship application window in February was greeted with welcome arms from a great number of farmers – a fantastic scheme for capital projects which enables landowners to undertake larger scale projects. The appetite and potential for this scheme, with large amounts of capital works items being claimed, saw applications almost double.
This year we also sold two of the largest farms brought to the market across the North West during 2020. Ellerton Grange, Southwaite and Westnewton Hall, Westnewton sold during the national lockdown, and whilst the processes changed, the demand and interest remained undeterred. In late June we closed one of our highest value sales in history, with a plot of development land near Durham City selling for several million pounds. The early March drop in interest rate to 0.25% inevitably led to increased activity and we saw many farm businesses across the North of England and Scottish Border taking advantage of this by undertaking a large amount of restructuring and refinancing.
British agriculture in general has battled through the recent pandemic reasonably unharmed and people will certainly remember the panic buying that emptied shelves across the country. So, I sincerely hope, that the wider general public can now appreciate and will continue to appreciate the work of farmers, and where their food comes from.
Despite the distinct lack of detail on phasing-out the BPS scheme at the beginning of the year, farmers have welcomed the newly published DEFRA plan which goes some way to fill in the gaps. As advisors, it has been a frustrating year in terms of advising clients on changes required for their businesses when so little has been known. This lack of clear and precise detail is concerning, particularly when we think about the fact that what we do now will shape agriculture for decades to come.
Uncertainty and in a bid to pre-empt potential future tax-changes at a time that would traditionally be deemed out of season, during September and October we received several instructions to market parcels of land. The supply is continuing along with the demand.
A major blow which upset many upland farmers and felt like a non-solution to our agricultural transition, was when Natural England pulled the plug on the Woodland Pasture Restoration and Upland payments. However, it was a more positive note, when the BPS payment window opened this month and £1.7 billion issued on the first day and more than 95% of farmers receiving their 2020 payment. Many eligible farmers were also issued their Countryside Stewardship revenue payments, totaling £40 million with a further £60 million of Environmental Stewardship payments.
As we look towards the future, there are a number of lessons 2020 has taught us. Digital technology and remote working has been central to successfully adapting businesses to the COVID context. This meant our yearly meetings with over BPS clients were undertaken remotely via Zoom, Microsoft Teams, telephone and WhatsApp. To diversify and ensure we effectively communicate up and coming issues and topics with the Agri- community the H&H Group Plc launched its first podcast. From feedback received, it is clear that we must embrace change, engage with new technology and look to building a 21st Century land management and advisory offering.
As we await the small print on forthcoming agricultural policies, I very much hope our Government will make the right decisions with regards to trade deals and Brexit. Whatever the outcomes, there are a considerable amount of changes that are due to take place, so I would urge all landowners to speak with their agent if they haven’t done so in the last six months. We may be in for a bumpy ride, but once we have got the other side of the road, I am sure that agriculture has a strong future ahead.