For the past few years the results of our Estate Benchmarking Survey have repeatedly reported a consistently improving economic performance of rural estates in England. It is heartening, despite the recession, that the 2010 results summarised in this bulletin generally continue this trend.

Unlike most property assets, rural estates continued to show some growth in gross incomes during last year, despite the recession (see Graph 1 in the gallery).

The austerity measures published in the Coalition Government’s emergency budget will affect the incomes for all types of businesses over the next few years. However, because of their diversity in terms of assets, rural estates should be well placed to continue growing.

In contrast, businesses relying solely on the agricultural asset to produce an income have been more exposed to output and input price volatility. This has led to a less stable income stream for these business types.

Income growth

A closer analysis of estate gross income shows annual growth averaged between 6% and 8% over the past ten years except for the survey results published in 2001 and 2010. In these years gross incomes were squeezed because agricultural incomes came under pressure.

In 2001 wheat prices fell to below £70 per tonne from peaks of £120 per tonne in the mid 1990s and, according to our research, both Agricultural Holdings Act Tenancies (AHA) and Farm Business Tenancy (FBT) rents were also under pressure in 2001, falling by 3% and 2% respectively.

However, the 2010 results also reflect income pressure on other assets including mineral receipts, which have been hit by the downturn in the construction industry.

Taken from
Estate Benchmarking Survey 2010