At the heart of the community

Despite changes in structure, estates continue to make a large contribution to the rural economy.

27 October 2014, words by Sophie Barratt

 

Our survey results demonstrate that estates which continue to be proactively managed with the focus on exploiting opportunities to diversify and to develop underused assets continue to perform well.

Income growth from agriculture has almost kept pace with inflation but is significantly below the real income growth recorded in the residential, commercial and leisure sectors. The importance of the residential portfolio to most estates cannot be over emphasised as it now contributes the largest proportion to gross income.

Commercial property continues to recover after the knock following the credit crunch and significant rental growth in workshop rents have been seen this year, particularly in the southern region. Of particular note is the growth in leisure income, which has recorded real growth of 6.5% since 2000.

Whilst the structure of many estates has changed over the last few decades, they remain at the heart of rural communities in terms of social facilities, housing and employment.

Within the 2014 survey we explored the contribution that estates make to rural areas and found that the majority of estate owners continue to provide facilities for use by locals – these vary from schools to pubs, shops and village halls. The most common facility provided by rural estates is playing fields which are provided by over 70% of estates and 46% of estates own the village hall. The provision of these facilities often contributes to the desirability of the area and can support the performance of estates’ let residential portfolio.

Over the last 20 years, the majority of estates have reduced the number of direct employees but continue to have a significant role in rural employment both directly and indirectly. 66% of rural estates employ between one and five employees directly, and 2% of estates employ over 100 members of staff.

Housing provided by estates accounts for a significant percentage of rural housing, particularly in the more remote parts of the country. As the constrictions in mortgage lending continue to make it difficult for first time buyers and those without funds to put towards a deposit to purchase a property, the let housing provided by estates is crucial for those on medium and low incomes to remain living in rural areas.

Estates also provide houses at concessionary rates for current and past employees, although the number of concessionary rents is reducing over time. As many houses in the private sector are enlarged, there is a particular shortage of smaller starter properties to rent in many areas.

It is important that the planning regime assists estate owners to be able to convert buildings or to build an appropriate number and size of new houses and cottages to ensure that the let housing stock is maintained in rural areas.

The recent changes to permitted development rights for the conversion of agricultural buildings may in part assist with this as owners and their advisers become more familiar with the changes. However, a realistic approach to affordable housing percentages in new build schemes is also necessary to encourage estates to progress them.

 

 
 

Key Contacts

Sophie Tidy

Sophie Tidy

Director MRICS, FAAV
Estate Management

Savills Oxford

+44 (0) 1865 269 162

 

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099

 

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