The Rural Update: Spending review relief
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership.
7 minutes to read
Viewpoint
More government cash for charities that will enable them to better utilise unwanted farm produce and help feed hungry families has to be a positive move (see story below). Wasting food unnecessarily when some people don’t have enough is a travesty. However, Waste Minister Mary Creagh slightly misses the point when she blames the problem on Britain’s “throwaway culture”. It is true that, as a society, we are becoming more wasteful. But overzealous supermarket requirements are behind much of the wastage in the horticultural sector, with perfectly edible and nutritious fruit and veg being binned or fed to animals because they are not quite the right size or shape. More effort should be put into ensuring retailers treat suppliers fairly and work harder to find a home for produce that isn’t aesthetically perfect.
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Commodity markets
Oil prices volatile
The market for oil is in a state of nervous volatility following Israel’s attack on Iran’s nuclear infrastructure. Brent crude was up 13% at one point on Friday, but ended the day 7% higher. Prices spiked a further 4% on Monday morning, but then settled down again as it appeared Israel was not targeting Iran’s oil production and export facilities. However, prices could quickly rise if the situation escalates or Iran targets shipping using the Strait of Hormuz.
Mixed barley and OSR picture
With combines set to roll over the next few weeks, oilseed rape prices are receiving support from the more positive sentiment emerging from trade talks between the US and China. The UK crop area is predicted to be 19% lower than last year. Meanwhile, arable farmers in the East are selling off their remaining barley stocks to clear their barns. New crop feed barley prices remain under pressure, with a £12 to £15 discount to wheat. A fall in the value of the US$ against sterling is making UK wheat exports less competitive on global markets.
The headlines
Spending Review relief
After months of nervous trepidation, agriculture fared better than expected in last week’s government Spending Review.
Chancellor Rachel Reeves announced £2.7 billion of combined annual funding for farming and nature recovery for three years from 2026/27.
Schemes under the Farming and Countryside Programme, which includes Countryside Stewardship and the Sustainable Farming Incentive, will receive on average £2.3 billion per year, which is about £100 million less than is currently allocated. £400 million will be spent on “additional” nature schemes.
Although the spending commitment is welcome, it is still a significant drop compared with previous years once adjusted for inflation.
Other spending announcements relevant to rural businesses included £272 million a year for tree planting, £85 million for peatland restoration, a 5% hike for flood defence spending (£4.2 billion over three years), £39 billion for a 10-year affordable housing programme, and a total of £13.2 billion for the Warm Homes Plan in England and Wales over the review period.
Defra’s own ministerial operating budget has been cut by 5%, which will likely lead to job cuts across the department.
Nature market conversation
Defra is asking the private sector for its views on how to incentivise businesses to invest in nature recovery.
The call for evidence sets out the key role of the environment in the government’s economic growth mission and the economic case for business investment in the natural environment.
Views are sought on the cross-cutting principles and opportunities that could govern policy development to increase this investment.
It is also seeking views on how to increase investment in specific environmental outcomes, including clean and plentiful water, nature-based carbon reductions, access to nature, flood management and sustainable land use and food production.
The call closes on 7 August, and submissions can be sent to this email address.
News in brief
Welsh environment bill ire
The Welsh Environment Bill, which was launched at the beginning of June, has already attracted criticism from farmers who claim it introduces too much regulation and could threaten their livelihoods. The bill proposes establishing the Office of Environmental Governance Wales to provide independent oversight of compliance, application and implementation of environmental law in Wales, and will enable Welsh Ministers to set “ambitious” biodiversity targets.
Planning bill progresses
MPs voted 306 to 175 to pass the Planning and Infrastructure Bill’s (PIB) third parliamentary reading last week, even though green groups and the Office for Environmental Protection, the government’s own watchdog, claim that it will put nature at risk. More than 12 Labour MPs have refused to vote in favour of the bill unless additional obligations are put on housebuilders to protect nature.
Lake District downgrade
An influential environmentalist is calling for the Lake District’s World Heritage designation to be revoked. In a blunt letter to the UK National Commission for UNESCO, Lee Schofield said: “Since its inscription in 2017, it has become increasingly obvious that it promotes a false perception of farming, is not economically sustainable, is working against crucial efforts to restore the natural environment and mitigate the impacts of climate change, is driving a wedge between culture and nature, does not help sustain farming livelihoods, is not wanted by local people and is contributing to damaging overtourism.”
Zambian farmland report
Knight Frank Zambia has just released its latest report looking at the market for agricultural land in the country. Irrigated land varies from US$3,500/ha to US$12,000/ha depending on location, but bushland can be had for as little as US$100/ha for those brave enough to start from scratch. Tanya Ware, Head of Farm Sales, says Zambia is predicted to be the sixth fastest-growing economy in Africa this year. Avocado exports hit a record high in 2024.
Food grant for charities
The government is offering grants totalling £13.6 million to 12 food charities across England to help them redistribute an estimated 19,000 tonnes of food directly from farms to fight food poverty in communities. Waste Minister Mary Creagh said: “This government’s Plan for Change is acting on food poverty and tackling Britain’s throwaway culture, ensuring more good food ends up on plates and not in bins.”
The Rural Report SS 25 – Out now
The Spring Summer 2025 edition of The Rural Report, Knight Frank’s flagship publication for rural businesses, which looks in more detail at many of the issues discussed in The Rural Update, is out now. The new report includes the latest news, research and insights from Knight Frank’s rural property experts, as well as thought-provoking contributions from some of Britain’s most iconic estates.
Available online and in print, you can click here to access the full report.
Properties of the week
Hampshire farming estate
This week’s spotlight is shining on a classic Hampshire farming estate offering sporting opportunities and a diversified income stream. Fresh to the market, Venthams Farm at Froxfield, near Petersfield, is a 745-acre property that includes a 10-bed farmhouse, 506 acres of Grade 3 arable soil and a range of commercial buildings that generate a “significant” rental income. The farm is a haven for wildlife and is entered into Countryside Stewardship and the Sustainable Farming Incentive. Based around the farm’s 200 acres of woodland, the current owners ran a successful driven shoot for 40 years until 2022, with bags averaging 165-180 pheasant and partridge. There are also stalking opportunities for roe and muntjac. Venthams is guided at £12.5 million. Please contact Will Oakes for more information.
Historic Kent estate home to rent
For anybody looking to sample estate living without making a long-term commitment, Knight Frank’s Rural Consultancy team in Kent has an intriguing option on offer. Newhouse at Mersham, near Ashford, which was once home to The Countess Mountbatten of Burma and Lord Brabourne, is part of the idyllic 2,700-acre Hatch Park Estate. Now available to rent, the nine-bed period property costs £7,995 a month. For more information, please contact Katie Bundle from the team.
Discover more of the farms and estates on the market with Knight Frank
Property markets
Development land Q1 2025 – Market falls
The value of greenfield development land fell by 2% in the first quarter of the year. Urban brownfield sites, however, lost 5% of their value over the same period, according to the Knight Frank Residential Development Index.
Farmland Q1 2025 – Values resilient
The Knight Frank Farmland Index, which tracks the average price of bare agricultural land across England and Wales, showed a marginal drop of 1% in the first quarter of 2025 to £9,072/acre. This follows a similar small decline in the final three months of 2024, bringing the annual fall to just 1.9%.
Country houses Q1 2025 – Mixed picture
The average price of desirable homes in the countryside slipped by just 0.3% in the first quarter of the year, according to the Knight Frank Prime Country House Index. Over the past 12 months, values have fallen by 1.6%.