summer 2011


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LandBusiness SPRING / SUMMER 2011

Counting the cost of climate change Chris Huhne on the government’s energy plans Building renewable technologies into a long-term strategy Retrofit: improving the efficiency of older properties

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Welcome

Contents

LandBusiness SPRING / SUMMER 2011

Welcome 04

News & views The latest for landowners and farmers

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Corn versus horn George Chichester: why food is the currency of the future

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Costing us the earth? Climate change expert Dr Neil Harris of the University of Cambridge considers the evidence for global warming

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Counting the cost of carbon Alexander Creed looks at the practice of carbon trading

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Going green? Energy and climate change secretary Chris Huhne answers our questions on the government’s plans

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Blueprint for a greener future Why estate owners should be building energy efficiency and renewable technologies into their long-term plans

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Burning money Facts and stats on rising energy prices

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Custodians of the castle Kincardine Estate is securing its future by diversifying into new areas and embracing renewable energy

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Retrofit for the future

Cover: Thrift Farm, Royston, managed by Strutt & Parker

A new BRE exemplar project is showing the way to making even the oldest properties more efficient

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There’s no place like home Mark Dorman on the gold rush for London property

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About us

The question of whether the Earth is flat or round may seem ridiculous to us now, but in the mid 16th century when Copernicus first propounded his revolutionary theory of a globe spinning on its axis around the sun, it was a dramatically divisive one. In recent years the issue of man-made climate change has been similarly contentious. History can be merciless in its judgment – how will it ultimately judge the Swedish scientist Svante Arrhenius, who first speculated in 1896 that carbon dioxide emissions could be warming the atmosphere? In Copernicus’ day, the question of whether he was right or wrong had little relevance for many in their daily lives. For us today, the issue of climate change cannot be so easily ignored. The evidence for global warming is stacking up, and whether or not we believe that we are responsible for causing the problem, we must all play our part in helping to tackle it. With fossil fuels dwindling and energy prices rising, it makes not only good environmental sense to investigate the alternatives, but good economic sense too.

Strutt & Parker’s range of services, plus office listings

Published by Sunday, Studio 2, Enterprise House, 1-2 Hatfields, London SE1 9PG. 020 7793 2460 www.sundaypublishing.com

Michael Verity Head of Rural Consultancy

The views expressed in this publication are not necessarily those of Strutt & Parker.

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News Views

Park planning As the most populated National Park in the UK, the new South Downs National Park Authority is expected to have overall responsibility for more than 4,000 planning applications every year, making it Britain’s eighth-largest planning authority. It has been widely assumed that it will inhibit development, but if house prices increase at the rate experienced in other National Parks, the need for conventional and affordable housing will intensify. In our experience, National Park Authorities are continually balancing the needs of conservation and economic development. Landowners therefore need to consider the authority’s policies carefully and coherently argue their case for development to succeed in their applications. Our experience in existing National Parks is the the new designation will not prevent economic development. Andrew Thomas, Land Management Department

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THE BUDGET: A generally positive result

While March’s Budget did not contain any significantly helpful changes, it was generally positive for farmers and landowners. George Osborne thankfully steered clear of any difficult changes to Inheritance Tax or Capital Gains Tax, and there was some good news for individuals wishing to sell their businesses, with an increase in the limit for gains attracting Entrepreneurs’ Relief from £5 million to £10 million. Although on the face of it Entrepreneurs’ Relief is very targeted, with some careful planning it can be useful when trading businesses are being transferred or sold. The proposed merger of Income Tax and National Insurance contributions could provide a welcome reduction in red tape. It remains to be seen what effect the increase in Stamp Duty Land Tax to 5% for residential properties over £1 million will have on the market; in practice, with the current lack of supply any impact is unlikely to be significant – although with farm sales in particular there will be an increased focus on the mixed-use rate. It was encouraging to hear that the 50% Income Tax rate is considered temporary. If a reduction is to come, it will most likely be in the run-up to the next election. Accelerating expenditure on allowable property repairs between now and then will be sensible tax planning for many. Nick Watson, Land Management Department

Proposals re-CAP

RETIREMENT RULES The procedure for dismissing employees due to retirement is governed by the Employment Equality (Age) Regulations 2006. However, the default retirement age of 65 is to be abolished with effect from 1 October 2011, and employers are prohibited from issuing new notifications of retirement using the default age from 6 April 2011. In order to achieve a dismissal, employers will now need to demonstrate an objective justification that it is a ‘proportionate means of achieving a legitimate aim’. Richard Taylor, Farming Department

The European Common Agricultural Policy (CAP) is once again under the reform spotlight. The income from the current regime is of critical importance to farmers and landowners and, for many, underpins their farming and investment decisions. The UK government’s view occupies one end of the European spectrum, with a push for radical reform and, ultimately, the removal of direct subsidies for farming and a concentration of funds towards the environment and rural development. Elsewhere in Europe there is a continued recognition to support farming and food production directly in the face of volatile and uncertain markets. The European Commission has released its first proposals for the future direction of the CAP. These continue to favour support for farmers as well as environmental and rural development schemes, though it seems clear that there is likely to be a further shift of emphasis towards the latter. Of particular concern to UK farmers is the possible introduction of payment caps for large farmers, and the restriction of payments only to ‘active’ farmers – for which we await a detailed definition. Nevertheless, these proposals are only the start of the serious negotiation to come, and we will be closely monitoring developments as we move towards a new regime from 1 January 2014. Will Gemmill, Farming Department

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Views

News

RHI: the finer points WILDLIFE BILL

to support projects that were commissioned after 15 July 2009 (the publication date of the Renewable Energy Strategy, and the cut-off point for eligibility). There is quite a bit of detail still to be released for the scheme, but we are pleased that progress is

now being made. The RHI gives opportunities for rural areas, particularly those that are not able to connect to the gas grid, the opportunity to produce more costeffective and sustainable heat going forward. Alexander Creed, Land Management Department

BRINGING HOLIDAY LETS IN LINE The government has announced proposals to change the tax rules for furnished holiday lettings from April 2012, to meet EU requirements. This includes increasing the minimum period when property is available to let from 140 to 210 days, and when actually let from 70 to 105 days. Where a business falls in and out of the qualifying conditions from year to year, it can elect to be treated as if it did qualify in the two years following a qualifying year, provided certain criteria are met. The tax advantage allowing business to offset loss relief against general income has been restricted to income from the same UK or EEA business, with effect from April this year. Russell de Beer, Land Management Department

FITs and starts The government has announced the early review of the Feed-in Tariff (FIT) – this was due to take place from 1 April 2012, and this date will remain for wind and hydro technologies. However, there is to be a fast-track review for solar schemes above 50kW – with significant cuts proposed – and for anaerobic digestion, from 1 August 2011. The way the FIT has been handled to date has caused significant uncertainty for investing in projects, but we hope that clarity will shortly be given to enable progress to be made. Alexander Creed, Land Management Department

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The Wildlife and Natural Environment (Scotland) Bill, voted onto the statute books in March after a final-stage debate at the Scottish Parliament, updated old legislation regarding countryside management. New measures include vicarious liability, where landowners and factors could face prosecution if their employees are caught killing birds of prey. It was widely feared snaring would be banned, but it was retained subject to more stringent regulation. It will be a while before the full ramifications are known. The bill contains challenges for those working in the countryside, but it is a better piece of legislation than was expected, and it is hopefully one that can work. Andrew Aitchison, Land Management Department

Photography: iStockphoto; Getty Images

The government announced details of the long-awaited Renewable Heat Incentive (RHI) on 10 March. The first phase will commence in October, with support for commercial installations of biomass (wood chip) boilers, ground source heat pumps and anaerobic digestion. Support for domestic-scale schemes will begin in 2012, alongside the Green Deal – but in the meantime there is an interim measure, the Renewable Heat Premium Payment, for schemes that have already started. It is reassuring to see the government has honoured the backdating of the RHI

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Food insecurity

Opinion

Corn versus horn – farming’s future? By George Chichester, Farming Department

Illustration: Crush/agencyrush.com

‘rising food prices do not necessarily mean rising profits – input costs are also rising rapidly’

THE WORLD FOOD SUPPLY is dwindling rapidly, exacerbated by an escalating population, ongoing environmental crises and growing demands for fuel from ‘renewable’ sources. Yet in the UK we have become increasingly reliant on world supplies – our self-sufficiency in food has fallen by about 25% over the past 25 years. Does this mean a bonanza time for UK farmers? Is this why farmland values in some regions have trebled over the past five years? Which are the best sectors, and which have the best prospects for future growth? UK food inflation is now 6.3%, well above the average of 2.1% for most other European nations. However, rising food prices do not necessarily mean rising profits. Input costs are also rising rapidly, due in particular to a high dependence on fuel and steel, and fertiliser (the cost of which is closely linked to oil). As a result, only some sectors are growing in profitability, according to the latest Defra analysis of farm business income by farm type farm in England for 2010/11. A recent report from the Commission for Rural Communities – which is sadly soon to be disbanded – concludes that a quarter of farming households are trapped in poverty, with a total income of less than £20,000 a year. These are generally livestock farms, mostly located in upland areas. The two main sectors – arable and livestock – are also to some extent interrelated. The old adage ‘up horn... down corn’ is as true today as ever. A high grain price is good for arable farmers, but means a high feed cost for livestock – particularly dairy, pigs and poultry – and at the moment is crippling returns for those sectors. As the UK market becomes increasingly linked to the world market, and as international trade barriers continue gradually to be dismantled, so we must take the lead on prospects for our internal

market from the global one. This is driven principally by grain – a relatively cheap commodity, easily transportable, with a good shelf-life, providing the staple diet for the majority of the world’s population. It includes wheat, rice, maize and a range of other crops. The demand for this is enormous – 15% of the world’s population already has insufficient food and is classified as malnourished. As we divert more grain into fuel, the shortage of supply will only grow more severe. Furthermore, as Asian economies grow, so their diets are changing and they are consuming more meat, milk and eggs – all commodities that convert grain into the desired end product rather inefficiently. Meanwhile, in the West, economic recession is temporarily reducing the consumption of red meat. Consequently, the sector to back in the UK in the short to medium term is arable. Grain prices have already risen dramatically – trebling from trough to peak. That will encourage increased production, both in this country and abroad. That, in turn, will cause livestock farming to retrench still further into the traditional grassland areas of the west and northern England, Wales and Scotland. It will cause the national herd and flock to reduce still further, but there will come a point – perhaps in three to five years’ time – when economic recovery in the Western world, combined with growing consumption in Asia, leads to a severe imbalance of supply and demand, with potential for strong profit growth as a consequence. One thing is for sure – no one can survive without food. We are beginning to see the implications of food insecurity on political insecurity, currently in North Africa. Forget the dollar or gold – the currencies of the future are food, water and fuel. [email protected]

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COSTING US THE EARTH? The evidence for climate change is irrefutable, according to expert Dr Neil Harris of Cambridge University – and we must all take responsibility for mitigating its effects

TOTAL UK EMISSIONS OF GREENHOUSE GASES IN 2009, AND ITS KYOTO PROTOCOL TARGET

566.3 MILLION TONNES UK GREENHOUSE GAS EMISSIONS IN 2009 – 8.7% LOWER THAN THE 2008 FIGURE OF 620.5 MILLION

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THE UK'S INTERNATIONAL LEAGUE TABLE POSITION FOR LOW-CARBON FUELS AND TECHNOLOGY INVESTMENT

3,412 MILLION TONNES THE UK'S KYOTO PROTOCOL EMISSIONS TARGET OVER THE FIVE-YEAR PERIOD 2008-2012

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IT WAS A LITTLE OVER 100 YEARS ago that the Swedish scientist Svante Arrhenius first suggested that the carbon dioxide released from burning fossil fuels could be warming the atmosphere. In 1957, as part of the International Geophysical Year, two iconic observation programmes were started: the ozone measurements made by the British Antarctic Survey that led to the discovery of the ozone hole; and the CO2 measurements taken at Mauna Loa Observatory in Hawaii. Arrhenius was right: CO2 concentrations were increasing. The rise in CO2 in the atmosphere is the result of economic development driving the combustion of fossil fuels, but also of cement production and the felling of forests in Europe, North America and now the tropics. Over the past decade, CO2 emissions have risen at a higher rate than the worst case anticipated in 1995 – partly due to the growth of China, India and other developing countries, and in spite of the more efficient use of energy in developed economies. We know from analysing ice cores that CO2 levels are higher now than at any time in the last 800,000 years, and that they have risen at a faster rate since the start of the Industrial Revolution. Simple physics says we must be warming up: CO2 absorbs

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Climate change

GREENHOUSE GAS EMISSIONS REDUCTION TARGETS OF THE UK CLIMATE CHANGE ACT 2008

SOURCE OF UK ENERGY PETROLEUM

%

34 BY 2020

some of the energy the Earth emits as infra-red radiation to balance the incoming solar energy. The extent of warming depends on the variation in other factors such as cloud cover, atmospheric water vapour and changes in the global plant life. So has the Earth warmed up? The available temperature records are, of course, imperfect. But we have to do our best with what exists. All the records indicate a global warming, with larger increases over the continents than over the oceans. Other records show a range of other changes, such as increases in extreme weather events and overall reductions in glaciers. These changes are consistent with the calculations made using the complex computer climate models that are the best available means of providing a credible picture of how the Earth has changed. Uncertainties abound. Some are scientific, related to imperfect measurement records and models. Others are economic and political – how fast will our economies grow? Which fuels will be used? What will happen to the tropical rainforests? However, our best estimate of past changes is consistent with our current theoretical understanding, and, given the risks shown by simulations of future scenarios, it is wise to take

%

80

1980

41% 45% 48% 45%

1990 2000 2009

NATURAL GAS

BY 2050

THE ‘BASKET’ OF SIX GREENHOUSE GASES COVERED BY THE KYOTO PROTOCOL

1980

17% 21% 37% 36%

1990 2000 2009

CO2 CARBON DIOXIDE

N2O NITROUS OXIDE

CH4 METHANE

PFCs PERFLUOROCARBONS

HFCs

COAL 1980

37% 26% 7% 6%

1990 2000 2009

ELECTRICITY (NUCLEAR, WIND AND HYDRO)

1980

5% 8% 7% 10%

1990 2000 2009

HYDROFLUOROCARBONS

RENEWABLES

SF6

SULPHUR HEXAFLUORIDE

1980

0% 0% 1% 3%

1990 2000 2009

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UK GREENHOUSE GAS EMISSIONS BY SOURCE

5% OTHERS

9%

AGRICULTURE

35%

14%

ENERGY SUPPLY SECTOR

RESIDENTIAL FOSSIL FUEL USE

5%

15%

DROP IN ENERGY USE IN THE UK FROM 2000 TO 2008, THE ONLY MAJOR EUROPEAN COUNTRY TO SEE A DECREASE

BUSINESS

22% TRANSPORT

REDUCTIONS IN CARBON DIOXIDE EMISSIONS BY SECTOR SINCE 1990

ROAD TRANSPORT +3%

ENERGY SUPPLY SECTOR -23%

BUSINESS RESIDENTIAL -31% -5%

84% CARBON DIOXIDE ACCOUNTED FOR THE MAJORITY OF THE UK'S MANMADE GREENHOUSE GAS EMISSIONS IN 2009

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mitigating measures. These range from reducing the emissions of greenhouse gases to strengthening our infrastructure. In most cases, these measures are also justified for other reasons, whether the rise in oil prices, taxation or the increased damage caused when flooding occurs. What role can the agricultural sector play? In addition to continuing to reduce fossil fuel use (for economic as well as environmental reasons), a real effort is required to reduce emissions of methane from livestock and nitrous oxide from excessive fertiliser use. These gases are extremely important, particularly for countries with large agricultural sectors – New Zealand’s greenhouse gas emissions are about 60% agricultural, for example. Agricultural emissions are not as large in the UK, but they are still significant, and under current climate change mitigation plans will have to be reduced starting from 2018. Emissions for individual farms can be calculated using models based on the farm’s characteristics (number of cows, amount of fertiliser applied, etc). On a larger scale, the government has estimated emissions nationally on a 1km by 1km grid. These approaches provide the best guess that we have at the moment. However, this needs to be verified by atmospheric measurements – otherwise how will we know how much difference any measures taken by farmers actually make? Such a ‘truthing’ system does not yet exist, but pilot studies are being undertaken, including those here at Cambridge. If successful, this would show if current emissions estimates are right, and would provide a basis for verifying any reductions in emissions.

Dr Neil Harris is a leading expert in climate change research, based at the University of Cambridge. His current research centres on the effect of climate change on stratospheric ozone depletion and atmospheric composition.

Sources: Department of Energy & Climate Change; Office for National Statistics

Climate change

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Opinion

Carbon trading

Counting the cost of carbon By Alexander Creed, Land Management

Illustration: Crush/agencyrush.com

‘the energy and industrial sectors are collectively responsible for close to half the eu’s co2 emissions’

EMISSIONS TRADING IS A MECHANISM through which governments attempt to limit the amount of their nation’s emissions from CO2 and other gases that affect the environment from industry, businesses and individuals. The normal mechanism is for a central authority, either a government or a body such as the EU, to set a total amount of emissions that will be allowed and then to establish a market under which quotas for quantities of emissions, normally in tonnes, can be traded. At the outset, companies or individuals may be allocated a set quota, and either that quota will remain fixed over time, unless the business buys or sells their entitlement on the market or the total allowable emissions can be reduced progressively with all parties seeing a reduction in the quota they hold. The EU Emissions Trading Scheme (ETS) is the largest in the world. The current scheme commenced in 2005 and covers the energy and industrial sectors – collectively responsible for close to half of the EU’s emissions of CO2 and 40% of its total greenhouse gas emissions. The current phase of the scheme lasts until December 2012, with a new phase due to commence from 2013. It is proposed that as the scheme moves into its third phase, from January 2013 onwards, that changes will be made, which will increase the cost of permits and add other greenhouse gases over and above those currently required to be accounted for. As well as the EU ETS, in the UK we now have the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, which will cover organisations responsible for around 10% of the UK’s emissions. Under the scheme, organisations that consumed more than 6,000 megawatt hours of electricity during 2008 will have to fully participate and purchase quota for each tonne of CO2 emissions. The scheme will feature an annual performance

league table that will rank participants on their energy efficiency performance. Participants will include organisations such as supermarkets, water companies, banks, local authorities and all central government departments. The CRC is being modified from the original version introduced by the previous government, and with the changes brought in by the coalition the £12 per tonne price will be retained by the government as treasury receipts. Currently both of the above schemes are unlikely to directly impact on rural businesses, which are likely to be far smaller than the threshold requirement. However, some rural businesses may have already come across the CRC scheme, as all organisations with half-hourly metered electricity had to register with the Environment Agency by September 2010 – it is only logical that over time the scheme will be expanded to cover the registered organisations that used less than 6,000 megawatt hours of electricity in 2008. Rural properties are often dependent upon heating oil for generating heat. We have seen the cost of this rise significantly and, sadly, many estates are aware of tenants with empty oil tanks that they cannot afford to refill. It is likely in the future that we will be taxed more heavily for CO2 emissions. If we are, those with oil heating will be taxed significantly higher than those with mains gas. If in the future either council tax for residential property or business rates are related in some ways to the emissions from a property, then those using oil will be penalised further. Over the next decade, we will see a significant amount of growth in awareness and accountability for our own emissions, both in the way we live and how we conduct our businesses. [email protected]

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GOING GREEN? Chris Huhne, Secretary of State for Energy and Climate Change, answers our questions on the government’s energy strategy Farms and estates are the largest occupiers of UK land, and have some of the highest energy costs due to infrastructure and supply costs. How do you expect to help the rural economy take part in the energy revolution we face in the next 10 years and beyond? Energy poses challenges CH for rural areas, but also opportunities. As energy consumers, I’m well aware that rural households can face the challenge of high petrol prices as well as the reliance on heating oil and LPG. These aren’t things we can solve overnight, but we’re taking the first steps. What I’m keen to emphasise more than anything is the positive, beneficial role that people living in rural areas can play in the long-term shift away from fossil fuels to alternative energy sources. Through the Feed-in Tariff and Renewable Heat Incentive, for instance, I want to see rural homes and communities leading the way with innovative energy projects – and reaping the financial benefits. I know there can be opposition to major new infrastructure such as wind farms and grid connections. Wherever possible we must make balanced decisions that take into account landscape impacts. Many localised concerns can and should be overcome if the developer takes a constructive approach – something I’m pleased to see the wind industry starting to take seriously. At the end of the day, I am sure of one thing: we know climate change is already affecting our countryside and, unless economies like ours shift to low carbon, this will certainly become a far more destructive force.

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The Fast-Track review of FITs and the RHI propose support for anaerobic digestion (AD), which is required to ensure on-farm viability. Of concern in the proposals is your comments on energy crops – many on-farm AD plants will require crops to be grown, and uncertainty of whether support may be withdrawn in the future if energy crops are used makes it more difficult to deliver projects. Do you propose to set some definitions for energy crops and how much is acceptable? We accept that some energy CH crops may be required in combination with slurries to increase the efficient operation of the AD plant. However, we must be mindful of the unintended consequences should there be a significant area of crops grown specifically for AD feedstock. This may result in a change in land use, away from food crops, that we would want to avoid. The government is currently developing a Bio-energy Strategy, due to be published in the summer, which will gather evidence on the availability and impact of a wide range of biomass feedstocks.

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You propose introducing the Green Deal and a domestic RHI in 2012. Will there be specific support measures for rural areas where the cost of heating oil or LPG became a real issue over the past winter? We realise that, at the moment, CH almost everybody who lives off the gas grid relies on expensive heating oil, LPG or direct electric heaters. We want to change that. These are not only costly ways of heating your home, but are also very high in carbon emissions. That is why we are going to focus the Renewable Heat Premium Payments – which

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start this summer – on homes that are off the grid. There will be one-off payments for biomass boilers, air source and ground source heat pumps, as well as solar thermal for hot water. We’re going to set out the details of how to apply in the next month or so, and hope to be up and running by the end of July so people can get their new heating systems in place for the coming winter. And then, when the RHI for domestic heating comes in October 2012, these installations should be able to receive ongoing tariff payments.

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Interview

Do you think Energy Performance Certificates and the energy efficiency of buildings will be used in the future as a basis for council tax or business rates? In England, some local CH authorities do offer incentives for energy-efficiency improvements, but there are no plans to force all to do so, or to offer reductions in business rates to businesses operating out of energy-efficient properties. But there is a real need for us to improve the energy efficiency of our homes and businesses, and with the introduction of the Green Deal we’re giving householders and businesses the tools to help them do so. Financial incentives to households and business are among the potential tools that could be used, and my colleagues in the Treasury keep all taxes under review as part of the Budget process. In Scotland the situation is slightly different, and councils are already required to offer council tax rebates to householders installing energy efficiency measures under the Council Tax Energy Efficiency Scheme.

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The RHI proposes an ‘early review mechanism’. The recent solar PV review has significantly reduced confidence in investigating projects – how do you propose to ensure SMEs can explore investing in renewable heat with confidence? We understand that investors CH want certainty when investing in potentially expensive renewable heating. That’s why we have said that when someone joins the RHI, the tariff they receive will be fixed. That means that if we do need to reduce tariff levels going forward, it would only affect new applicants and not those already in the scheme. Ultimately, these schemes must be affordable and sustainable in the long run. Where there are significant changes to the assumptions which

Illustration: Lee Woodgate/eyecandy.co.uk

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underpin the RHI, we need the ability to call an early review so that adjustments can be made. We intend to set out further details on the circumstances under which an early review could occur later this year. The Green Investment Bank (GIB) was confirmed by the Chancellor in the Budget, but it will be limited on raising funds until 2015. Is this going to limit progress, and what sort of projects do you expect it to support up until 2015? The GIB is a crucial part of CH ensuring the infrastructure development needed to enable the transition to a green economy. It will support low-carbon investment where the returns are too long-term or too risky for the market. In the Budget we promised £3 billion of public money, and we expect that this will bring forward significant amounts of private sector capital during this parliament. We are taking steps to ensure borrowing powers for the GIB from 2015-16, subject to public sector debt falling as a percentage of GDP, to bring in further private sector money. We envisage that the GIB will be investing in a wide range of green projects. Initially this is likely to focus on renewable power such as offshore wind, but also industrial energy efficiency, water and waste. Decisions have still to be made. Further announcements will be made by the end of May and we expect the GIB to be operational by September 2012.

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The Party Parliamentary Group on peak oil recently published a report on Tradeable Emission Quotas. Do you envisage the introduction of personal quotas for emissions at some point in the future? The idea of a personal quota CH for emissions is interesting. Officials have carried out research on this topic in the past and found

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that it could be technologically feasible. However, the research also found this to be an expensive policy to implement and one that would have implications for the public. Considering the current economic circumstances and the impact these are having, it is not something we are likely to pursue in the short term. We are pursuing a range of more cost-effective and less complex initiatives to help individuals reduce their emissions. Rural estates and businesses regularly make investment and strategic decisions with inter-generational timeframes. How do you see energy efficiency developing over the next 30 years? Energy efficiency and CH renewables are at the heart of our long-term strategy for the UK’s energy security and for meeting our ambitious climate change targets. What I’m sure of is that it will pay a dividend to invest now in reducing energy use and installing clean energy technologies. The sooner decisions are taken to make the shift to low carbon, the better off we’ll all be. And it’s not just about saving the planet – you only have to look at events in North Africa and the impact that has had on the oil price to see that getting off the oil hook is the surest way to greater security of energy supply and a more stable economy for us all. Anyone that’s interested in seeing how we might live our lives and meet our energy needs in the middle of the century should log on to the DECC’s ‘My2050’ simulation, which lets you explore the tough choices and trade-offs we’re going to face. Whether you live in a city, town, village or the remotest part of the countryside, we have big challenges facing us and it’s going to be up to every one of us to solve them. my2050.decc.gov.uk

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With rising fuel prices, financial incentives – and punitive taxation surely just around the corner – it is time for estate owners to build energy efficiency and renewable technology into a long-term plan he world is facing an energy challenge. Unrest in the Middle East and North Africa has disrupted supplies of crude oil and pushed prices up further to a peak of more than $119 a barrel. Even when the political situation calms down, oil and gas prices are unlikely to reduce significantly – improvements in technology to tap in to these finite resources will be more than matched by the increasing demand from emerging economies. Meanwhile the much-vaunted ‘saviour’ of the energy industry, nuclear power, is under scrutiny following the earthquake in Japan, with the energy secretary Chris Huhne commissioning a report into plant safety.

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The government has a legally binding commitment to reduce the UK’s carbon emissions by 80% by 2050, and by 2020 15% of all energy must be generated from renewable sources – up from less than 2% in 2009. These are ambitious targets. To help meet them, the government has introduced the Feed-in Tariff (FIT) and Renewable Heat Incentive (RHI) schemes, with the aim of stimulating investment in renewable technologies, and launched the Green Deal to provide loans to property owners for efficiency improvements such as insulation. But if the FIT and RHI are the carrots, how long before the sticks emerge? It wouldn’t be much of a leap for government to

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link Energy Performance Certificates to council tax and business rates. Sooner or later that connection is likely to be made, and once it is, the cost of occupying an inefficient building will increase. Rental income from residential and commercial property is the lifeblood of many rural estates, and the tenants of such buildings are already substantially worse off than they were two years ago. Occupiers are looking to make savings – and the burden of rising energy costs, council tax and business rates for inefficient buildings will soon begin to have a knock-on effect on rental value. In order to protect future income from the impact of rising fuel prices and punitive taxation, it is important for estate owners to act now, and build energy planning into a sensible, affordable long-term strategy. Such solutions do not have to involve a major capital outlay, especially in the short term. At the micro level, property owners should consider green alternatives when carrying out day-to-day repairs. Modern insulation, double glazing and radiator thermostats can all make a cumulative difference, for example – and the Green Deal, which is due to begin next year, could help manage the cost of some of these. When it comes to major refurbishments, green improvements can have an even greater impact, and the up-front capital costs should be balanced against the long-term returns. Replacing an old oil heating system with a ground or air source heat pump or biomass boiler, for example, will significantly lower future energy bills, with RHI payments offering a return on the additional capital cost.

Wind power has established itself as a consistent generator of power and profit in the UK. While it is very site specific and involves more complex planning issues than other renewable technologies, a small or medium-sized turbine can offer an attractive financial return. Hydroelectric power and anaerobic digestion can also give good returns, and may be of particular interest to farms and agricultural businesses. (Indeed the agricultural sector is going to have to play its part in an ecofriendly UK, accounting as it does for 9% of greenhouse gas emissions but less than 1% of GDP).

‘if the fit and rhi are the carrots, how long before the sticks emerge? it wouldn’t be much of a leap to link energy performance certificates to council tax and business rates’ However, many experts believe that solar panels will be the renewable energy choice of the future. Solar arrays mounted on buildings usually deliver returns of around 7-8% per annum. Equipment is relatively easy to install, and solar photovoltaics are currently the only renewable technology with permitted development rights when installed on residential property. The benefits of renewable energy generation are not limited to providing heat and power for estate properties – electricity

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Renewable energy

Estate planning

Over 95% of heat in the UK is currently produced by burning fossil fuels, but the Renewable Heat Incentive (RHI) hopes to change this. Around £860m has been set aside by the government to help subsidise renewable heating technologies such as biomass boilers, ground-source heat pumps, solar thermal panels and bio-methane projects. Under the scheme, people will be paid for the heat energy they generate. Homes will have to reach a set energy-efficiency standard to qualify for the RHI. Owners of renewable heat generation systems will be able to obtain payments of up to 8.5p/kWhr, paid quarterly over a 20-year period, depending on the size of the system and the tariff level. Tariffs for non-residential systems begin in October, while for domestic property there will be an interim Renewable Heat Premium payment from June this year and a full scheme from Autumn 2012. The Feed-in Tariff (FIT) has been active since April 2010 and subsidises power produced by renewable energy sources such as solar panels and wind turbines, below 5MW. Once the technology is installed, owners can not only see their electricity bill reduced, but also receive an income from the FIT for generating their own electricity. Eligible technologies include: anaerobic digestion to produce biogas for electricity generation; hydroelectric power; solar photovoltaics (PV); wind power and small-scale gas-powered systems up to 2kW. For example, if an average household, such as a three- or four-bedroom house, installed a 2.5kW solar photovoltaic panel to generate electricity, the FIT would pay the homeowner around £900 a year tax-free, while around £100 would be saved on reducing energy costs.

can also be sold to tenants, and any surplus exported to the National Grid. Leasing space to third-party investors is another option – one of our clients, for example, has an agricultural business in East Anglia, with sheds and warehouses for storage and processing. When it came to erecting a new building, it was a planning requirement that 10% of its energy came from a renewable source – this practice is more and more common for new commercial property – so we are letting the roof space to a third party, with the client receiving ‘the benefits are not electricity at a reduced rate limited to providing heat in place of rent. and power for estate While we are seeing properties – surplus can increasing interest in be exported to the grid’ renewable technologies, and exploring a full range of schemes with our clients – solar, wind and hydro power, anaerobic digestion, biomass and ground source heat – there is still little strong research or cost analysis into the economic benefits. What is the motivation for a property owner to take out a £5,000 oil boiler and install an air source heat pump for £16,000? Well-managed estates and farms are finding that it is time well spent gathering data into what’s going on now, so that informed judgments can be made about the practicalities and profitability of energy-saving schemes and renewable energy generation. We’re working with a number of estates to develop 10- to 15-year strategies, including one with residential property, a farming business, hotel, holiday cottages and holiday park. It is a big user of energy in a remote but tourist-heavy area. We’re currently reviewing its heat and electricity usage and considering which solutions might fit – and, of course, the costs involved. Not only will we be weaning the estate off its reliance on fossil fuels to make it greener and more efficient (and therefore cheaper to run), but this in turn will also help make it a more attractive proposition for visitors and tenants. Until now there has been no real driver to make green improvements, but there are finally some carrots being offered. If we don’t act now, there will doubtless soon be some sticks from government through taxation and from the market through reduced rents. Embracing energy efficiency improvements and renewable technologies through a well thought-out, long-term plan and phased programme of investment is key. [email protected] [email protected]

strutt & parker land business autumn /winter 2010

Photography: iStockphoto. Illustration: Fred van Deelen/The Organisation

RHI and FIT explained

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Climate change

BURNING MONEY Our ongoing reliance on rapidly depleting fossil fuels is having a direct impact on domestic energy prices

73%

AVERAGE DOMESTIC WEEKLY SPEND ON FUEL

THE AMOUNT BY WHICH ELECTRICITY PRICES ROSE BETWEEN 1999 AND 2009

159% THE AMOUNT BY WHICH GAS PRICES ROSE BETWEEN 1999 AND 2009

2008

£53.32

2000

£37.09

1990

£24.09

1980

64%

THE RISE IN AVERAGE HOUSEHOLD EXPENDITURE ON FUEL SINCE 1998

£13.87

Sources: Department of Energy & Climate Change; Office for National Statistics

DOMESTIC ENERGY CONSUMPTION

6.7% 58%

26%

16%

3%

SPACE HEATING

WATER HEATING

LIGHTING AND APPLIANCES

COOKING OF ELECTRICITY GENERATED IN THE UK IN 2009 WAS FROM RENEWABLES, UP FROM 2.6% IN 2000

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Case study

Kincardine Estate

By diversifying into new areas and embracing the potential of renewable energy, the Bradfords are helping secure the future of their estate – and their children’s legacy, says Joanna Skailes ike that well-known advertising slogan for a premium watch brand, you never actually own an estate; you just look after it for the next generation. The 3,000-acre Kincardine Estate in Aberdeenshire’s Royal Deeside has been in Andrew Bradford’s family since before his greatgrandmother built Kincardine Castle in 1894. The question for Andrew and his wife Nicky is how to build on, improve and safeguard that legacy for their children and grandchildren. ‘Estates are very long-term businesses,’ says Andrew. ‘We are custodians for the next generation, but we have to work on improving the estate rather than just act as safekeepers.’ The Bradfords decided to make Kincardine work for them by offering a unique brand of hospitality, which includes private house parties as well as concerts, weddings and corporate functions. ‘The castle is like a 1924 Bentley: it’s wonderful, but an anachronism in the modern age,’ explains Andrew, an Episcopalian minister. ‘You can put the Bentley in the heated garage and polish it, or you can drive it and have a lot of fun. Do you treat the house as a museum or use it for the purpose for which it was built? For me it’s a no-brainer. With a property like this, you have to try to generate income to secure the future. By running it in this way, we’re preserving it for the next generation, and the revenue it raises helps to keep the building going. I love it, but I wouldn’t do what I’ve done for hedonistic pleasure.’ Andrew took over the running of the estate in 1979, at a time when it was still heavily dependent on its agricultural activities, which then amounted to 80% of the overall revenue. That figure is now closer to 13%, and the estate encompasses farming, forestry, fishing, shooting, housing, shops, offices, workshops, development land and a large quarry. It is a major undertaking, and in 2003 he enlisted the help of Strutt & Parker and took on David Smart, of the firm’s Banchory office, as estate factor. Andrew is very much still ‘hands-on’, but Strutt & Parker’s role has allowed him to focus on developing the corporate business in the castle and other projects. The Bradfords firmly believe the local community is at the heart of Kincardine, and that planning for its future is as much about making sure the community survives as

L

Nicky and Andrew Bradford took over the running of the 3,000-acre family estate on Deeside in 1979. Home to the couple and a variety of guests, Kincardine is one of Scotland’s finest Victorian castles

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K IN C A R DI N E

E S TATE

CUSTODIANS OF THE CASTLE

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Case study

Kincardine Estate Clockwise, from bottom left: An eco-friendly fishing hut is being built of polystyrene blocks filled with concrete and a wood exterior; Andrew Bradford and Strutt & Parker’s David Smart at the Minew Hill mast, which is being used to evaluate the potential for a wind turbine; the estate manages some 70 homes in the local area

ensuring the longevity of the estate itself. As a result, more than three-quarters of the 70 homes in and around the village of Kincardine O’Neil that are managed by the estate are rented at low cost to meet local need. ‘What would happen if I asked for the highest rent possible? I think we would soon look back and wonder where the locals went,’ says Andrew, who is also housing and communities representative for the Scottish Rural Property and Business Association. ‘Responsibility and commitment are key, and a lot of landowners are cognisant of that. We have to be.’ Andrew is also aware that the future of any estate in the 21st century must involve renewable energy, and a reduction in reliance on fossil fuels. ‘Heating the castle is a major challenge,’ he says. ‘The fact that it is listed by Historic Scotland poses a few difficulties, because we are limited in what we can do to reduce our consumption. But we’re doing what we can, from switching from the old filament lightbulbs to energy efficient ones, and heating isolated areas where required. We tend to wear a few extra layers when we’re here on our own!’ With David’s help, he is considering biomass, wind, solar and hydro power on the estate. ‘We hope to install a biomass heating plant in the castle this year, which will cut out our oil consumption. It’s a big investment, but if we also build a combined heat and power plant alongside our planned housing development in Kincardine O’Neil, we’ll be able to use biomass to provide heat and power which we’ll sell to house owners and tenants by way of an energy supply company,’ explains Andrew. ‘The intention is to source as much of the wood fuel supply as possible from small roundwood grown on the estate,’ adds David. ‘Not only will this yield a higher return for the estate’s forestry enterprise, but it will also reduce road haulage miles.’ He and Andrew have also looked at ways of cutting down building costs across the estate’s property portfolio. When they built an extension two years ago, they used polystyrene blocks; the method was so successful that they have rolled it out in several other building projects. ‘Andrew wanted to look at alternative building materials and polystyrene blocks have proved to be very cost and time effective, as well as having good insulation and energy efficiency properties,’ explains David. ‘We’ve also been able to use estate labour and skills, which helps maintain job security at Kincardine.’ Another potential revenue stream is generating electricity from wind power and making the most of the Feed-in Tariff scheme. A meteorological mast installed on the estate’s Minew Hill last September is assessing the site’s wind power potential over a 12-month period. If it proves viable, an Enercon E33 wind turbine will be installed to supply green power equivalent to that consumed by around 190 average households. Surplus

‘we are custodians for the next generation, but we have to work on improving the estate rather than just act as safekeepers’ strutt & parker land business spring / summer 2011

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Photography: Peter Sandground

revenue generated by the turbine will be used to underpin the estate’s provision of affordable rented housing. Solar and hydro power are less likely to be viable, but are being investigated nonetheless. ‘At Strutt & Parker’s suggestion, we have looked at using a bit of unproductive rough ground to erect a solar photovoltaic field,’ says Andrew. ‘It may be a possibility in the future if PV technology becomes more efficient and the prohibitively high cost of the installation falls. ‘Although a number of the estate’s farms used to have small mills, there isn’t a great deal of potential for hydro power. We are currently looking at the burns that used to power these mills and assessing the viability of installing micro-hydro-turbines, but I don’t think we would ever be able to generate much electricity.’ An electric van, bought in 2008 as a trial for one of the estate joiners, was another environmentally friendly venture. Although inexpensive to run, the van’s limited range restricted its use, and it is now used to deliver home-baked produce from Kincardine Kitchen – another estate enterprise – to the village post office and other local outlets. While the Bradfords are persevering in making Kincardine as sustainable as possible for the next generation, they are also working to ensure that as much of the estate as possible is passed down the line intact rather than being broken up to pay Inheritance Tax. The tribunal decision last summer in the case involving Andrew Brander, executor of the late fourth Earl of Balfour and the Whittingehame Estate in East Lothian, gives them greater confidence that there will not be a large Inheritance Tax bill. ‘This case gives support to the strategy adopted for Kincardine. In recent years there has been greater emphasis on a “one business” policy,’ explains David. ‘There has been a gradual move towards more trading. For example, more of the farming is now in hand with operations undertaken by contractors, most of whom are neighbouring farmers. This gives them the opportunity, as tenants of other land, to spread their overheads and the Bradfords higher farming and trading turnover – a win-win situation. ‘Additionally, Kincardine is blessed with attractive sites for wind-generated electricity and many developers have approached the estate. However, the Kincardine philosophy is that if it has potential let’s do it ourselves and reap the full benefits. An Estate Energy Supply Company that incorporates a wind turbine and a combined heat and power plant could be the way forward.’ Other examples of increased trading activity, in practice or to be implemented, include a small works building maintenance enterprise, contracting work at the quarry, additional corporate and private hospitality in the castle, and increased food sales from Kincardine Kitchen. ‘The thrust of continued development is on building the business as a whole,’ says David. ‘Our aim is to achieve Business Property Relief on as many of the assets at Kincardine as possible. If so, another of the Bradfords’ objectives will have been achieved and the legacy to future generations will be left intact.’ ‘More than 30 years after taking over the estate, it is in many ways unrecognisable,’ says Andrew. ‘But I hope we have found a way to get the most out of it while looking after it and making sure it is in the best possible state in which to be passed down the line when the time comes.’

Above: Estate-grown timber will be used to fuel a new biomass heating system. Below: fishing on the River Dee is another revenue stream for Kincardine

kincardinecastle.com

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RETROFIT FOR THE FUTURE Upgrading inefficient property will be key to reducing emissions and saving money; the BRE’s new prototype is showing the way

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ith its magnificent estates and beautiful Victorian and Edwardian terraces, the UK has the oldest housing stock in the developed world – half of the country’s residential properties have been standing for more than 50 years. This presents a problem not only for homeowners, but also for landlords: older properties, with their poor insulation, draughty windows and outmoded heating systems, are an increasing liability at a time when tenants, worried by spiralling fuel costs, are keen to reduce their bills. The government, meanwhile, is increasing its efforts to promote energy efficiency, with its Green Deal currently under consideration. The Building Research Establishment (BRE) is seeking to address the issue by creating a prototype for a greener way forward for Britain’s ageing residential stock. It hopes the £4 million Victorian Terrace project, the environmentally friendly refurbishment of a 19th-century stable block at its campus near Watford, will demonstrate that it is possible to carry out affordable retrofits of older properties that will save energy while boosting values. The challenge is an enormous one. Only 1% of the UK’s existing housing falls into the highest Energy Performance Certificate (EPC) bands, A and B. It is estimated that, to meet the UK’s emissions target of an 80% reduction on 1990 levels by 2050, all housing will need to be upgraded to those bands over the next four decades. However, BRE chief executive Dr Peter Bonfield argues that a national programme of eco-retrofitting doesn’t necessarily mean a hugely increased cost burden for homeowners, landlords or government: ‘People in the built environment sector are realising that being environmentally sustainable is better for their business,’ he says. ‘As energy prices rise, housebuilders, renovators, housing associations and building product suppliers will realise there is a good market here.’ BRE’s principal consultant John O’Brien has worked on the Victorian Terrace for three years. It shows, he says, that when a property is refurbished, energy-saving measures can be included with only a

W

marginal impact on the overall cost. The project is in a former mid 19thcentury stable block adjacent to Bucknalls, the large Victorian house that has been home to the BRE since 1925. The block was converted into offices and labs, but gradually fell into disrepair, and has been uninhabitable for the past seven years. Like most buildings of its era, the block has single-skin walls, with much poorer heat insulation than the cavity-wall houses that have predominated since the 1930s. Due to its poor construction quality, it has had a host of other problems, including rotting sash windows, an uninsulated tiled roof, damp, structural disrepair and a colony of bats roosting in the rafters. The BRE’s aim was to renovate the building to improve its EPC F rating to an A or B. Funding was raised from a consortium of sponsors, including principal contractor Wates, chemicals company BASF, building materials supplier Saint-Gobain, EDF Energy and Marks & Spencer. The project also received funding of £1.3 million from the Department of Energy and Climate Change. The terrace is now ready to be launched, with the refurbishment of the original

‘especially if you are renting, you’d choose a house or flat that costs £150 rather than £1,500 a year to heat’ building and two of the three test-bed homes completed in late 2010. The next phase of the project includes plans to create a third home, establish workshops and project rooms, and build a new exhibition hall at the rear of the terrace. The BRE adopted a three-step approach to the refurbishment, dealing with the building’s structure first. Heat lost through uninsulated solid walls is typically more than 50% greater than through uninsulated cavity walls, so the focus was on improving the building’s thermal performance. The BRE used 13 types of insulation, both internal and external, on the walls. The former ensures the appearance of the historic façade is retained, while the latter can be used where interior space is at a premium.

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Retrofitting

Seven window types were also installed, including timber, composite, and UPVC double- and triple-glazed units. Next were heating and hot water solutions. The terrace uses air-to-air and air-to-water source heat pumps, heat phase-change materials in ceiling tiles and a condensing combination boiler with a mechanical heat-saving device. Finally, renewable technologies were added, with solar thermal panels installed on the roof. O’Brien describes the Victoria Terrace as a ‘living laboratory’ that will test the effectiveness of the technologies involved and provide hard data on how much energy is conserved. He claims that so far, the project has shown that it’s possible to save 60-80% on fuel bills. The data from this and 300 other test-bed projects across the UK will be critical to establishing the link between energy efficiency and the resulting cost savings and increased values, says Bonfield: ‘If you are a bank or a pension fund looking to invest in energy efficiency, you’ve got to be sure you get the outcomes in terms of returns.’ In Australia, where EPCs are well established so that buyer can see what the fuel costs of occupying a home will be, there has been a 6% rise in the sale price of houses where energy-saving measures have been carried out. ‘I see this as being a bigger driver, especially if you are renting, you would choose a house or flat that

BRE principal consultant John O’Brien and chief executive Peter Bonfield at the Victorian Terrace

costs £150 rather than £1,500 a year to heat. Even the fuel not-so-poor are feeling the impact of fuel prices,’ says O’Brien. The BRE data will also help to underpin the government’s Green Deal, which had its first reading in the House of Commons in March. It proposes setting up a ‘payas-you-save’ scheme, with loans available for energy-efficiency improvements to homes and businesses, and repayments tied to individual buildings. ‘Evidence of what works, what doesn’t and which investments will bring the best results in the shortest time is needed if the Green Deal is to be successful,’ says Bonfield. ‘Having an accessible financial solution will

make a positive difference to market take-up [of energy-efficient improvements] and we should see a fall in carbon emissions from our homes, (the single biggest carbon offender), accountable for 14% of the UK’s total emissions.’ However, while government action can help to speed up progress in the short term, Bonfield emphasises that the commitment of property owners will be required to make older homes more eco-friendly. ‘It shouldn’t be long before doing these things makes commercial sense, whether you’re a homeowner, a large real estate owner or a landlord.’ www.bre.co.uk

Disused farm buildings can present an opportunity for landowners to create energy-efficient, affordable housing. In Cornwall, farming charity the Addington Fund is regenerating a large barn at Ruthvoes Farm in a £1.2 million project to create affordable homes and new business opportunities for tenant farmers needing to

strutt & parker land business spring / summer 2011

leave their farms. A second, smaller barn will be converted into a workshop, alongside the construction of three purpose-built workshops. The energy-efficiency improvements being considered include tripleglazed windows, radiator thermostats and additional cavity wall insulation, along with rainwater harvesting

aste and waste ment treatment ms. Solar systems. voltaic panels photovoltaic e installed on will be outh-facing roof of the south-facing ew workshop complex, the new while a biomass boiler for -chip pellets is planned wood-chip vide heat for the four to provide homess and four workshops. gtonfund.org.uk addingtonfund.org.uk

Words: Stuart Watson. Photography: Thomas Ball

Sustainable barn conversion

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Opinion

London property

There’s no place like home By Mark Dorman, Residential Development

Illustration: Crush/agencyrush.com

‘to make a decent return on property, you’ll still need a heart, brain, courage – and cash’

YOU SHOULDN’T REALLY BE THINKING about work during a West End musical. But when it’s based on The Wizard of Oz and the final scene includes the Yellow Brick Road, I did. All routes lead to the Emerald City. Being a London agent feels a bit like that at the moment. Everyone seems to want to find something in the capital, and the Yellow Brick Road to London is a congested route at present. Post credit crunch, the appetite for safer longer-term investments in the world’s most established property market is stronger than ever. The past 12 months have seen three common themes: global interest in London; a lack of opportunities here; and a shortage of debt everywhere. In the residential market, the Far East invested more than £1 billion in central London in 2010. Investors from Hong Kong, Singapore and Malaysia have been buying here for 30 years, understand the market and have enjoyed considerable returns. Their purchasing power materialises either when our market is relatively weak, or exchange rates dictate that they are automatically achieving a discount. There is also the wave of investment from emerging Far East markets such as China and Indonesia. Wealth generation in these countries is rapid and diverse, and individuals are not afraid to place equity into flats and houses of the established London villages. We recently sold two flats worth £3 million to a crockery manufacturer from southern China who has never been to London. Almost in the same week, another high net worth investor from Hong Kong exchanged contracts on a commercial building in the City for £280 million. Europeans, too, have an unrelenting desire to live and buy property in London. Chelsea seems to be the hot spot, with Italians, French and Spanish all interested in lateral apartments or family houses with a decent address. According to our Chelsea office, anything priced between £2 million and £5 million

is often subject to competitive bids nowadays. Chelsea and Knightsbridge are possibly as cosmopolitan as neighbourhoods get anywhere in the world. And London’s safe, stable and democratic eco-political environment, combined with its cultural offerings, make it pretty much irresistible, even to the French. One real problem is the lack of stock to buy and development sites that can deliver more. Many commercial developers and investors now want to diversify into residential. But even with (often) huge war chests, they are struggling to secure sites. During the 1990s recession, a wave of opportunities came to the market from the banks, but that simply hasn’t happened this time. So developers would rather hold on to sites bought in 2007 and 2008 than take a financial hit by selling them. One area of opportunity might be converting existing commercial to residential, especially considering the government’s apparent enthusiasm to relax that process. Even more challenging is how all these investors and developers are going to build stock if they can find the opportunities. The banks say they are lending on construction, but are they? And if they are, how expensive is it to borrow? Many developers are having to construct off their balance sheets. We are now in the fourth consecutive year of supply shortage. London needs about 15,000 new private homes to be delivered each year and it has been down at 9,000 since 2008. All this also naturally keeps construction costs down. Next year the Olympics comes to London, and we can start to see where the £9 billion has gone. It now takes six minutes to get from King’s Cross to Stratford on the ‘Javelin’ train. The Aquatics Centre is finished. It looks like the government will deliver on time. We believe 2012 will be the best year for London’s property market since 2007. Global and diverse demand, supply shortage, the prospects of a successful Olympics, low constructions costs, and possibly a little more debt for those with and without deep pockets to make inroads and build some good stock. The Yellow Brick Road may need widening. But if you’re on it, you’ll still need a heart, brain, courage – and cash – to make a decent return. [email protected]

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The complete property partner Strutt & Parker was founded in 1885 by Edward Gerald Strutt and Charles Alfred Parker, who set out to provide estate management services. Today the business has grown to be one of the largest property partnerships in the UK, offering services and professional support in all aspects of property and land. As the business has grown and expanded into new areas, it has retained a belief in the value of professionalism, knowledge and client understanding to provide the best possible service. For a full list of services, visit struttandparker.com

Rural services Land Management Department The Land Management Department manages two million acres of land across the UK, acting for more than 600 retained clients across 450 rural estates of differing size and complexity. We offer consultancy in:

• Strategic estate and rural property advice • Agricultural and • • • •

• Compulsory purchase • Landlord and tenant negotiations • Minerals • Telecommunications • Renewable energy

residential property management Planning Valuation Expert witness Taxation

Farming We offer the complete farming service and are proud to have worked with some landowning families for more than 100 years. Our team is made up of more than 30 experts, making us one of the largest specialist groups of our kind. We advise on the huge variety of issues that enable owners to manage and make the most of their land, and our bespoke service means you can come to us for as much or as little assistance as you wish.

Estates & Farms Agency We handle the sale and purchase of some 50,000 acres of farmland, residential and commercial farms, and sporting estates every year. We specialise in estates and farmland only, using national expertise and detailed local knowledge.

Rural contacts Please contact your local office to find out more about our rural services.

strutt & parker land business spring/summer 2011

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Contacts

Key contacts Land Management Nick Watson 01273 407051 [email protected]

London Residential Andrew Scott 020 7591 6690 [email protected]

Planning & Development James Youatt 01243 832602 [email protected]

Farming Christopher Monk 01799 533105 [email protected]

Residential Development Simon Kibblewhite 020 7318 5177 [email protected]

Valuations Giles Allen 01473 220422 [email protected]

Commercial Peter Hunt 020 7397 8222 [email protected]

Leisure & Hotels Colin Crosthwaite 01722 344053 [email protected]

Building Surveying Jane Henshaw 01273 407024 [email protected]

Estates & Farms Agency Mark McAndrew 020 7318 5171 [email protected]

Taxation Jonathan Smith 01273 407038 [email protected]

Strutt & Parker Private Investors Charles Lochrane 020 7318 5010 [email protected]

Estate Agency Michael Fiddes 020 7318 5192 [email protected]

Accounting Shaun Spalding 01245 254661 [email protected]

Sporting Agency Mark Merrison 01635 576905 [email protected]

UK offices banbury

exeter

kingussie

odiham

T 01295 273592 E [email protected]

T 01392 215631 E [email protected]

T 01540 662020 E [email protected]

T 01256 702892 E [email protected]

banchory

farnham

lewes

pangbourne

T 01252 821102 E [email protected]

T 01273 475411 E [email protected]

T 0118 984 5757 E [email protected]

glasgow

london head office*

princes risborough

T 0141 225 3880 E [email protected]

T 020 7629 7282 E [email protected]

T 01844 342571

guildford

ludlow

T 01483 306565 E [email protected]

T 01584 873711 E [email protected]

harpenden

market harborough

T 01582 764343 E harpenden@ struttandparker.com

T 01858 433123 E marketharborough@ struttandparker.com

sevenoaks

harrogate

moreton-in-marsh

shrewsbury

T 01423 706786 E [email protected]

T 01608 650502 E [email protected]

T 01743 284204 E [email protected]

haslemere

morpeth

st albans

T 01428 661077 E [email protected]

T 01670 516123 E [email protected]

T 01727 840285 E [email protected]

horsham

newbury

stamford

T 01403 246790 E [email protected]

T 01635 521707 E [email protected]

T 01780 484040 E [email protected]

T 01285 659661 E cirencester.landagents@ struttandparker.com

inverness

northallerton

winchester

T 01463 719171 E [email protected]

T 01609 780306 E [email protected]

T 01962 869999 E [email protected]

edinburgh

ipswich

norwich

T 01473 214841 E [email protected]

T 01603 617431 E [email protected]

*For full details of our eight London Residential offices, please visit struttandparker.com

T 01330 824888 E [email protected]

brighton and hove T 01273 779649 E [email protected]

cambridge T 01799 533100 E [email protected]

canterbury T 01227 451123 E [email protected]

chelmsford T 01245 258201 E chelmsford@ struttandparker.com

chester T 01244 354888 E [email protected]

chichester T 01243 832605 E [email protected]

cirencester

T 0131 226 2500 E [email protected]

E princesrisborough@ struttandparker.com

salisbury T 01722 328741 E [email protected]

T 01732 459900 E [email protected]

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