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Diversification to create additional revenue streams
In response to political and economic uncertainties, British landowners are seeking to diversify their estate to create additional revenue streams.
There are many diversification options available to landowners, such as:
- Selling a proportion of the estate for development purposes
- Adding value to farm produce by on-farm processing, direct/online selling, farmers’ markets or creating an on-site farming/produce shop
- Letting land for renewable energy purposes, such as wind farms, biomass and solar farms
- Letting outbuildings for other commercial and residential purposes, which could include offices, workshops, storage, holiday lets, residential tenancies, weddings or private events
- Tourism/leisure activities and developments for example, glamping, adventure sports, pets, leisure and recreation activities
- Grazing licences or contract farming arrangements
Diversification is consumer-focused and varies based on the location and extent of the estate. It is therefore important that the suitable options are chosen for the estate and the surrounding area.
The implications of the diversification options must also be carefully considered:
- Planning implications for development. The title to the estate must be checked to identify any restrictions. For example, any covenants imposed against the estate preventing certain uses of it or rights granted over the estate benefitting neighbouring land
- Removal of/preventing access to trespassers. Keep an eye out for trespassers and consider taking steps to notify the public that there is no intention of dedicating any public rights of way or permitting any access. For example, implementing fencing or signs, or if committed, depositing a statement and map with the appropriate council
- Boundary disputes. Do you know what you own? Can you prove it?
- The impact on any existing agreements (tenancy agreements, grazing licences and contract farming arrangements). For example, if a diversification option requires the termination of a residential tenancy, take care to consider what adverse impact the imminent demise of section 21 of the Housing Act 1988 will have on the termination process for residential tenancies
- Tax implications
- Succession planning
- Business structure, including partnerships and companies
If you have any queries on the above information or on any aspect of agricultural law, please contact Emma Coke at Birkett Long LLP on 01206 217629 or email@example.com.