What will 2024 have in store for the rural economy and landed estates?

Generated with Bing AI

The rural economy beats to a different drum. Political squabbling, generated in the Westminster bubble and hotly debated inside the M25, doesn’t mean a lot in the countryside, where farmers and land managers operate in tune with the weather and the seasons.

But major policy changes, the state of the economy and social developments all impact on the countryside just as they do in cities. That makes preparing for a year of change important, whether you do business from the end of a country lane or the top of a city office block.

The biggest event of 2024 will almost certainly be the General Election. After 13 years of the Conservatives and a high expectation of a change of government, the year will be marked by fevered speculation about what’s in store, politically.

The challenges for the countryside have been developing for some time. The combined impact of Brexit, climate change and a radically altered farm subsidy regime, have all had, and continue to have, an effect. Further change will come in 2024, especially if – as expected – Labour gain power.

For highly visible rural estates with neighbours and stakeholders who take a close and sometimes critical interest in their activities, managing change comes with special challenges. The basic rules, however, are fixed. Open and transparent engagement, proactive communication and listening to feedback will continue to be essential for progressive rural estates in 2024.

Estate owners and directors should recognise their social value and engage with neighbours and stakeholders in a positive way. In and end of year message, Laura Oliff-Lee, head of Strutt and Parker’s Salisbury office, highlights the importance for rural estates of quantifying the benefit they bring to their communities and their environment and investing in their reputation.

“We believe the issue of social value contribution is gaining momentum,” she says. “There is a very basic starting point where estates would be well advised to start understanding the benefits and sometimes innocuous-seeming value that they bring to their local communities.”

Whatever rural estates do in 2024, the way they are perceived by those around them matters more, year-by-year. The far-sighted have sustainable plans stretching far into the future, well-matched to wider global concerns around reducing carbon emissions, improving habitats and boosting wildlife as well as growing food, generating energy and providing homes and commercial space. 

But if they don’t share those plans, engage with neighbours and stakeholders who might be affected and whose support can be crucial, they risk alienating their communities.

For all of us the economy is likely to remain challenging in 2024, whenever the election is called and whoever ultimately wins. While interest rates have started to move in the right direction the smart money says they will remain above 4% for the year and probably next year too.

A clear point of difference seems to be emerging between the Conservatives and Labour over house-building targets, with Labour determined to aim for more homes and the Tories anxious not to be seen to ‘concrete over the countryside.’ A change of Government in 2024 could be significant for estates with aspirations to develop part of their land, although Levelling Up Secretary Michael Gove’s speech on housing in December failed to signal much, other than business as usual.

Landed estates that spread their activities across a range of sectors, including residential and commercial property, farming, forestry and visitor attractions, will be best placed to weather any financial storms that blow up during the year.

Farmland will continue to be seen as a safe and steady asset throughout 2024, property experts believe. Values for arable land have increased by almost 30% in the past decade, outperforming many other investments, and while the market may cool a little in some areas, with more land on the market, the trajectory is still expected to be upwards.

Widening uses for farmland, including as sites for renewable energy schemes, continue to drive demand with competitive rents available for landowners who lease blocks to solar farm operators equivalent to £1,000 to £1,500 an acre. Smaller areas used for battery storage facilities can bring in even better returns. 

Properly managing planning applications for renewables, with full consultation, can make the difference between schemes that are well received and understood by neighbours and stakeholders and those that generate opposition and resentment, which can last for years and taint future projects.

Some clarity is emerging in the way the new subsidy support systems will work for farmers. Greater take-up of the various schemes, encouraging more environmentally friendly ways of farming and, in some cases, the end of food production on less productive land, is also likely as 2024 progresses.

The long-standing financial buffer for farmers – the Basic Payment Scheme – begins to be phased out in 2024, forcing many to think hard about how they manage their land in future. The impact, on the countryside and the rural landscape, could be hugely significant, over time.

Dealing with the public reaction to these changes will require careful handling, particularly for estates with a high profile and in sensitive locations. Land, and what we do with it, has seldom been so critical to the nation’s future. Delegates to the 2023 CLA Business Conference debated those issues under the title Competing Visions: the future for land.

Discussions reflected the fact that the pressure on landowners to do the right thing is immense. But the families that run our landed estates have been doing that, mostly successfully, for generations, through all manner of changes. They will want to keep on doing just that, in the future, as they have in the past, whatever 2024 might throw at them.