Our 2011 survey results show that the average net income (before depreciation, finance, drawings and tax) fell by -0.3% to £108 per acre (£267 per ha) as costs, mainly from property repairs, increased, wiping out the increase in gross income (see Graph 6 in the gallery).
In the southern regions of England, the pressure on net incomes was greater. Net incomes decreased by -10.2% in the South East and -1.6% in the South West. In contrast, the eastern and northern regions recorded above-inflation increases in net income.
Expenditure
Total expenditure on ‘All Estates’ rose to just over £89 per acre (£221 per ha), an increase of 9.5%. As material costs have increased significantly, average property repairs increased by 14% across ‘All Estates’ to £45 per acre (£111 per ha) and represented half of total expenditure or 23% of gross income.
Total management costs (cost of estate office plus management fees) increased 5% in 2011 to £24 per acre (£60 per ha) on the average estate, representing 12% of gross income. Running at around the level of inflation, the increase in management costs was slightly lower than the 6% annualised growth recorded over the past three years.
Other costs
Other estate costs increased 6% to £21 per acre (£51 per ha) in 2011. These included insurance, which increased a significant 9.5% to £5 per acre (£12.35 per ha), and legal fees, which averaged £4.50 per acre (£11.11 per ha), up almost 30% on 2010.
Insurance increases have followed some stringent reviews with insurers, who in many cases have insisted on valuations culminating in significant increases in sums insured. Legal costs have also increased, as specific advice on employment and tenancy matters has proved necessary.
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