Diversifying your estate - top 5 questions to ask yourself before embarking on a new project
There is a full spectrum of diversification projects for you to consider if you wish to enhance your rural property portfolio. But before you embark on this process, here are our top five questions to consider.
- What are your reasons for undertaking the project?
The most common reason for diversifying is to increase your income stream, unlock funds or to add value to your farm or estate. It’s key to set out your aims and objectives before you embark on a new project and it’s equally crucial to play to your strengths and identify any weaknesses to help streamline your project’s development. Consult diversification specialists, operators, and consultants who can help guide you through your journey.
- Who is involved in your farm or estate?
Who are the decision makers now and who will they be in the future? Carefully consider how the diversification of your rural assets fit in with your business or family’s succession planning. These questions need to be answered before you commit to diversifying your property portfolio.
- Think about what’s core to you
For us, we often find that the family home and the land directly surrounding the house are the most precious elements of our clients’ farms and estates. If you have some outbuildings 10 feet from your back door, is an Airbnb or commercial use property really going to be right for you there? In reality, this will affect the enjoyment of your home. Consider how the project will fit in with your existing business and properties.
Through categorising your different assets, you can also think about your low hanging fruit. Think about those redundant farm buildings or any land that might be perfect for diversification without impacting on your home or farm business.
Future proofing your property through diversification is an invaluable tool, it’s important that you take a helicopter view of your estate before embarking on the diversification journey. Think about its longevity. How will the project work in 5, 10, 15 years’ time?
- What’s the market like for your new venture?
Diversification schemes need to be considered carefully in the context of your location and the local markets. For example, glamping is likely to work well in a picturesque location with close transport links to London or other major towns and cities, but it is less likely to be successful in a particularly remote location without a unique selling point.
Equally, the rent achievable from a let building will vary considerably depending on location, access, services, internet speed and so on.
It is really important to undertake market research at the early stages to ensure your project will deliver the income required and to enable it to remain a viable business into the future.
Furthermore, a often forgotten element of rural development and diversification is the management costs. Not only do you need to consider cost of management repairs, but also the cost of building it and then maintaining it once it is up and running.
- Do I need Planning permission?
The majority of diversification projects will require some form of planning consent, be that through a full planning application or through the use of permitted development rights. As such, planning will be essential to most schemes.
It is really important to consider the chances of achieving planning consent and to undertake the relevant applications before investing further in the project. Make sure you are aware of any site-specific constraints, such as land designations (e.g. Green Belt, AONB etc.), listed buildings, highways, landscape and so on, and how these could impact on what can be achieved at the site.
Some schemes can potentially be undertaken without any planning at all, such as temporary events. However, at the time of writing, from January 2022, the amount of days you can undertake a temporary use on land without needing planning permission is reducing from 56 to 28 days.
Make sure you’ve engaged with your Local Planning Authority or with a consultant to ensure you’ve got all the appropriate permissions in place before investing in a new development.
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