What does the New Government mean to the Land & Property Industry?
H&H Land & Estates responds to the impact of the General Election on Rural Communities and Town and Country Planning.
With BREXIT looming and a General Election complete, it has been a year of uncertainty for the UK and never more so for the land and property industry. Here, H&H Land & Estates, one of the North's leading Chartered Surveyors, Land Agents and Valuers, responds to the outcome of the General Election and reflects on its impact on the industry in the wake of BREXIT and beyond as well as the effect that the new government will have on development and planning:
“Last week, we witnessed a huge Conservative majority off the back of the pledge to ‘Get Brexit Done’,” explains Tim Sedgewick, Head of Land Agency (North East).
“They will get the Withdrawal Agreement through Parliament and leave by 31st January 2020, but BREXIT is still far from done. A future trading arrangement with the EU following the end of the transition period is still to be agreed. This is of huge importance to British farming, for access to European markets and also for imports of crucial inputs.”
The Conservative manifesto pledges to domestically maintain the £3bn in rural support payments currently received from the EU for the next period of parliament. It is believed the Basic Payment Scheme will start to be reduced from 2021 with a move to a “public money for public goods” model. This requires clarification and rural groups have a huge role to play in shaping how the policy will work in practice.
The Government has pledged to introduce an Environment Bill and set up a new independent Office for Environmental Protection. It has also pledged to get the public sector buying more British food.
There is a promise to invest in nature with headline figures such as an additional 75,000 acres of trees a year by the end of the next Parliament and seek to create new National Parks, Great Northumberland Forest and Areas of Outstanding Natural Beauty.
It will be interesting to see the impact of Conservative plans on land prices and farm incomes. It is unlikely there will be changes to the taxation regimes in relation to land ownership - this is the main driver for farmland investment from our experience. It may well be a case of finding someone to farm it!
If farm incomes continue on their current downward trend and are further hindered by reduced funding, changing weather patterns and more red tape then we will be likely to see farming families want to throw the towel in. The muted change to de-link support payments from the requirement to farmland might incentivise an early retirement for many.
The pledge to plant trees has been a soundbite for every party in the election. It needs to be remembered that countryside areas need jobs and people to remain and manage the land, even if a majority is planted with trees. We wouldn’t want to see skills lost and rural businesses disadvantaged unfairly. The threat of increasing rural crime must also be addressed. Tim continues:
“The biggest worry I have is if our new Government compromise a trading deal with other countries, which sees that country allowed to export food to us, which is produced to a standard which would be illegal to do here. The Conservatives have received new a big rural support, especially in County Durham with the Bishop Auckland and North West Durham constituencies. They cannot betray this trust and must start to deliver noticeable benefits for our rural areas.”
Looking towards the effect that the new government will have on development and planning, Richard Shield, Director of Residential and Commercial Development for H&H Land & Estates adds:
“The resounding majority for the Conservative party will give them a powerful mandate to follow through with the manifesto pledges which, in terms of development, will include efforts to stimulate the economy through the commitment to spend £100bn on infrastructure, including the Northern Powerhouse Rail and the Towns Fund with a pledge to invest in 100 towns. It will be important for our local councils to promote the region to ensure some of our less vibrant settlements are amongst those supported.”
The proposals to ensure that infrastructure required to support new housing comes before the houses is something that will be difficult to deliver without public investment. At present, developers are required to deliver investment in schools, surgeries and community facilities with triggers linked to the delivery of the new homes. The proposed Single Housing Infrastructure Fund is intended to facilitate this proposal, but all developers and landowners will be interested in the working detail when it is forthcoming.
The commitment to ensure that 300,000 new homes are delivered per year by the mid-2020s will be very difficult to deliver without a significant increase in the skilled workforce; the country has only delivered around 180,000 per year in recent years. Richard concludes:
“The planned overhaul of the planning system will also be critical although, as with all the other parties, there is a commitment to defend the Green Belt.
“In terms of house buyers, the proposed long term, fixed rate mortgages at 95% loan to value does put the Conservatives in a position where there may be tension with the Bank of England, who have suggested such a product is not a prudent measure. However, other proposals, such as providing a 30% discount for first time buyers, will be very much welcomed.”