A challenging year bookended by updates to the National Planning Policy Framework (NPPF).
The industry has spent the last 12 months waiting for the Government to publish an updated NPPF, which was finally released this week. It is irresponsible and incredibly frustrating to see that short term political decisions and electioneering have taken precedence over solving the UK’s housing crisis, which will have long lasting impacts on the economy and society. We have seen a considerable decline in both housebuilding and new planning permissions this year, with further falls now inevitable.
Throughout 2023, the strategic land market bucked the trend and remained buoyant, with developers and promoters looking to fill their coffers in anticipation of a change in Government and more favorable planning climates on the horizon.
The agricultural land market remains strong, in particular off-market transactions, where we have secured attractive land values for our clients. The nature of these transactions has been varied, with sales and purchases ranging from 8 acres to in excess of 400 acres, and prices ranging from just under £10,000 per acre to upwards of £25,000 per acre.
It has been a tough year for the housebuilding and consented development land market, we started 2023 with double digit inflation which led to consecutive interest rate rises. This impacted new home purchasers as they encountered mortgage availability and affordability issues, leading to a significant decline in sales rates. This caused cash flow problems for many housebuilders and affected their appetite for buying new land, particularly in Q2 & Q3.
Confidence has returned to the development land market in Q4, echoed by the significant growth in PLC housebuilder share prices which have generally rocketed since mid-2023, bringing in renewed optimism and an appetite to return to the land market in 2024. This was evidenced by a recent marketing exercise for a prime site in West Oxfordshire, which attracted strong interest and generated almost 20 bids.
We are in the midst of a significant change in the rural sector, with the end of the Basic Payment Scheme and direct financial support, replaced by the introduction of the Sustainable Farming Incentive as part of ELMs. This growing emphasis on sustainable practices to meet environmental concerns – such as nutrient neutrality under the Environment Act 2021 and the drive to Net Zero under the Energy Act 2023 – results in practical and financial challenges in meeting regulatory standards, while also opening up new opportunities for farmers and landowners. All of this must be balanced against a backdrop of high production costs and ever more prevalent weather extremes, meaning that now more than ever rural businesses are having to question their existing practices and look to evolve to deliver long-term solutions.
Outside of the day job, 2023 saw us host our second annual Newton LDP Charity Clay Shoot on the Shuckburgh Estate, raising £28,000 for the Royal Agricultural Benevolent Institution. The team also took on the challenge of walking the length of Hadrian’s Wall in under three days, this gruelling challenge in scorching conditions raised almost £20,000 for Birmingham Children’s Hospital Charity.
During tricky economic conditions in 2023, I could not be more proud of how the team at Newton LDP have knuckled down, persevered and used creativity to deliver the best possible outcomes for our clients.
Looking ahead to 2024, January will see us bolster the rural side of our business, with a senior recruit joining to offer agribusiness services to new and existing clients – more to follow on that and other exciting expansion plans after the break.
With the latest data suggesting inflation is seemingly heading in the right direction, and cuts to interest rates expected in 2024, the team at Newton LDP remain bullish about next year and look forward to hitting the ground running in January.
On behalf of everyone at Newton LDP, I would like to wish our clients and contacts a Merry Christmas and prosperous, healthy and happy New Year.