During the past few month the longer-term impacts of social distancing have become clearer, and we are beginning to better understand the consequences these impacts will have for enterprises and policy across our rural economy.

Generally rent rolls have proved to be resilient when compared with some other asset types, but trading businesses have been hugely impacted by the lockdown and subsequent social distancing restrictions.

To help rural businesses review their current position and look to the future, we have been scenario planning. This involves looking at the current variables for each enterprise within a business which will help define how it may perform in the future. In its simplest form does the business invest, maintain or close an enterprise?

This process helps the farm or estate to define its approach for the future. Take property assets as an example. Appraising existing use with future need may lead to a decision to create new farming operation hubs, shared occupation units and good services such as broadband. This approach, done well, will lead to the release of redundant farm buildings for development to commercial use and/or residential to meet the growing demand from those new to remote working who have reconnected with the countryside.

Excellent connectivity will be a pre-requisite and new or improved social and leisure space will add value to new and existing tenants and residents.

We have seen some great examples of business adaptation, estates partnering with glamping businesses to replace lost visitor attraction income and on-farm vending machines. Often clever use of social media has helped businesses to leverage their brand, reaching a new market of customers.

Business owners and their teams need to work together to develop an entrepreneurial approach to establishing new income streams, which when combined with high-quality local enterprise will lead to a combination of improved margin from trading businesses, an enhanced rent roll and most importantly a sustainable business for the longer term.

Scenario planning goes beyond the challenges presented by Covid-19 as there is more change to come. The Government’s new planning proposals and any potential tax changes need appraising by rural businesses and, of course, we cannot forget the pre-Covid-19 issues of Brexit, Net Zero, and the new Environment and Agriculture Acts.

Over the past few months our countryside and its contribution to wellbeing, food production, tourism and leisure has never been in greater demand. There is huge potential for rural businesses to capitalise on this and scenario planning now to create a strategy for the ‘new normal’ will help secure the future.

Further information

Contact Ben Knight

Contact Savills Rural