Regulatory change

The new agricultural and environmental regulatory landscape will impact rural businesses in 2019 and beyond. Preparing for life without, or with reduced, public subsidies means that a focus on business resilience is vital and natural capital may become an important income generator. The impact on the performance of let land will be one to watch.

Experiential diversification

Appetite for countryside fun remains solid, but think of experiences rather than shows and events. Park runs, flower fields, Frisbee golf and Halloween fright nights all make the most of the available space, unique landscapes and atmosphere of country estates, while competing for the attention of cash-pressed, image-conscious millennials.

Commodity strength

In 2018, there were big increases in farmgate prices for UK cereals crops. An increasing global population means that commodity consumption is not predicted to abate any time soon. Subject to careful management of trading and market risk, such as exchange rates, the outlook for commodity prices is positive.

Agritecture

Managing increased climatic risks – both shock events and seasonal fluctuations – could be the turning point in the economic viability of controlled environment growing systems, such as hydroponics. There are options beyond commercial scale too: integrating smart growing systems into the built environment offers engaging experiences and enhanced well-being in residential spaces.

Land value capture

Greenfield uplift values have to be competitive to encourage landowners to bring land forward for development, but land value capture remains one to watch for 2019. ‘Net environmental gain’ is pitched as a way to extract funding for environmental offsetting from development, but this sits alongside other measures that already capture significant land value, including much-needed affordable housing.

Increased liquidity

The regulatory reform position has announced the end of the Basic Payment Scheme by 2027. This means that many rural businesses will be evaluating their 10-year succession plans. We predict that this will bring more land to the market than has been the case recently.