What makes land valuable?
With less than one per cent of UK farmland sold each year it is hardly surprising that demand remains high even when returns from traditional farming are under threat.
However, it is not just limited supply that keeps land values higher than returns from farming might suggest. There are growing opportunities for the creation of value from environmental gains.
Biodiversity net gain is becoming an increasing issue for major planning applications. This requires applicants to demonstrate that they are improving biodiversity by at least 10 per cent, and we are seeing interest in off-site works such as wetland creation or woodlands.
What is also clear is that payments to farmers for these measures will not just be based upon the cost or opportunity lost to the landowner but are more likely to be based upon the value created for the end user.
If your wetland creation scheme enables a large development, the value to you as landowner will not just be the loss of that land or the loss of production, but it could be a proportion of the value created by the enabled development. This means that those initial low returns from farming can look a whole lot more attractive.
Mike Taylor is senior partner of Barbers Rural Consultancy LLP
