Aug 24, 2015 RICS news 0 comment

The plan to boost rural connectivity and productivity

This has been a busy week for rural matters. On Wednesday we released our Rural Land Market Survey and responded to the Government’s Rural Productivity Plan.

This ten point plan had been trailed as part of The Chancellor’s ‘Fixing the Foundations’ last month.

Rural Productivity Plan
The release of the Rural Productivity Plan was anticipated with some curiosity, given the many announcements made on city led growth and urban devolution. Many were keen to see how the plan would help stimulate our rural areas, often forgotten in national economic policy making.

While we welcomed the initiative to stimulate rural economies through enterprise zones, broadband and business rates, some of the measures are either re-hashed announcements or aspirations without back-up detail.

It is imperative that enterprising and dynamic land entrepreneurs have an opportunity to succeed and we welcome the government’s acknowledgement that rural areas, not just cities, can contribute to the recovery.

These ten measures are a hand up and not a hand out, particularly cutting on-farm inspections and improving telecoms.

One of the biggest issues that rural communities and businesses are struggling with is affordable housing for younger workers. Increased apprenticeship numbers will grow the workforce but forcing Starter Homes on rural exception sites is removing the homes they will need later in life. Starter homes are offered at a 20% discount on market rate and these sites are, after all, specifically designated for affordable housing and often built by housing associations.

Much still relies on the rural proofing of other departments, like road and rail spending, and the ability of cash strapped local authorities to fund 100% business rate discounts. These are an underwhelming set of measures compared even with the Rural Economic Growth Review in 2011.

More importantly for estates and farmers, our data out today shows greater available rural land and lower price growth expectations over the next 12 months which will create the conditions for land -based businesses to grow.
Jeremy Blackburn, RICS Head of Policy
Download the full Rural Productivity Plan.

RICS Rural Land Market survey
The main outcome of the RICS/ RAU Rural Land Market Survey H1 2015 showed that there was an increase in the supply of commercial farmland and a tailing off of demand across many parts of the country, which has resulted in a significant reduction in price growth expectations over the next 12 months.

During H1 2015, a net balance of 51% of respondents reported an increase in the supply of commercial farmland while demand for these blocks declined, albeit very modestly, for the first time since 2008. Scotland and the North East of England saw a reduction in demand not just for commercial but also residential farmland, while the results for South West and the East Midlands suggests demand is still edging upwards in these areas.

Significantly, the headline transaction based measure of farmland prices fell by 2.5% during H1 2015 and by 1% over the course of the year to reach £9692 per acre. Average rents also slipped during the first half of the year both for arable and pas