RURAL BUSINESS SURVEY 2019 FINDINGS: UNCERTAINTY GALVANISES LANDOWNERS TO INVEST
We are delighted to share with you the outcomes from our 2019 Rural Business Survey.
The client sentiment survey is run annually to monitor the attitudes of land and estate owners to investment, diversification and planning in the current economic, social and political climate.
There are some really interesting indications, in particular when comparing the study with the previous year’s.
The response rate was up this year on last and collectively represents over 250,000ha of England, Scotland and Wales, an area the size of Cheshire.
It is clear, that the political uncertainty surrounding our industry at the moment is prompting land and estate owners to move away from reliance on traditional incomes such as farming and tenancies and invest in new enterprises in the countryside.
60% of respondents, most of whom own traditional or diversified estates, were concerned or very concerned about their longer-term financial prospects. This was up on last year’s figure of 48%. This is attributed to the decline in agricultural support payments, Brexit, national political intentions and disconnected rural policy making.
Optimism in the face of uncertainty
However, 25% of landowners feel more optimistic about their business prospects now than at the start of 2019 with 67% intending to invest in their rural businesses in the next 12 months.
Rural diversification on an upward trend
Investment plans are weighted towards the growing appreciation for the countryside’s role in work, wellbeing and pleasure, with 47% investing in commercial space, 40% in self-catering accommodation, 38% in residential lettings and 36% in events including festivals and weddings.
More than half of respondents (56%), believe it is a good time to be investing in a rural business and a further 11% have committed to capital projects over the next 12 months to deliver alternative revenue sources.
Compared to 22% last year, however, none of the respondents plan to diversify within existing farming operations and fewer than 4% are planning to start or expand a lease for agriculture. There was also a 10% decrease in plans to invest in further acreage.
William Fry, Managing Director, said the survey identifies that land-based businesses are seeing the escalating uncertainty as a catalyst for action:
Paradoxically, the greater the unknowns, the greater the confidence to take matters into their own hands. They have had time to digest that we are living in precarious times and they are not willing to rest on their laurels any longer. They have priced in the Brexit risk - agricultural support payments are on the decline, attitudes to tenancy agreements, public good and planning consent may change – and are ready to shift from a farming focus towards diversification trends in order to maintain profits which will drive a vibrant rural economy.
Some of the top trends developing are health and well-being, co-working space, off-grid holiday retreats firmly plugged into mindfulness and more sophisticated rural visitor attractions.
These need to be in the right location and right environment to have long-term success. It’s more than just thinking “let’s start a farm shop”. It’s important to build a self-sufficient sustainable business that has commercial appeal and longevity. You need to look at the current business, the skills and assets already in the business, and what would complement and sustain these into a profitable future
More than a third anticipate positive growth in profit in the next 12 months, with a minority of 13% concerned that it would actively decline.
We know landowners will be taking a long-term view of return from land, we therefore believe the commitment to act now will ensure rural businesses are fit to ride the storm ahead and for future generations.
To request a copy of the full report, please contact email@example.com.