Murray Beith Murray Partner, Andrew Linehan, writes in the summer edition of LandBusiness magazine, considering the impact of the COVID-19 pandemic on the rural sector. Read the full article below, republished by kind permission of LandBusiness magazine:
Scotland’s rural sector is no stranger to adversity. Farming has always had good years and bad, even before politics and world events conspire to augment whatever the weather may have inflicted. While the onset of Covid-19 has added a bleak outlook for some (indeed many) rural businesses, it will also have created opportunities for others.
As a crisis, Covid-19 has affected rural businesses in a range of ways. For those rural businesses that are mainly exposed to farming, the changes may have been most evident around additional biosecurity in the lambing shed and the team working there. For those with additional exposure to more diversified areas such as farm shops and tourism which are locked down, the changes are likely to be more wide-reaching. At the time of writing, none of us know exactly how or when large sectors of our rural economy will be able to reopen. Until we get to that stage, many rural businesses will have taken advantage of the range of government support measures, whether through the furloughing of staff or applying for financial assistance.
The government support that is on offer, such as furloughing, does have time limits attached. While support cannot continue indefinitely, how businesses will cope later in the year will be telling. The much discussed ‘second wave’ may be an economic one rather than virus-based one, if demand fails to return and government support has been withdrawn. There is much for policy makers to consider and watch carefully as events unfold. Even if the lockdown does end in the coming weeks, those offering holiday lets may find that relief comes too late to take advantage of more summer holidays being taken in the UK rather than abroad. Time will tell whether next year offers any premium on bookings or the prices that can be commanded as people look to spend time away from towns and cities.
Some rural businesses will doubtless look to restructure or resecure assets to get through these difficult times - we are already seeing this in some of the instructions we are receiving. Following the limited reopening of the intake register at Registers of Scotland, we have been able to support clients in getting a range of transactions settled. It is strange how quickly both clients and advisers have got used to the new lexicon of Zoom meetings etc. Doubtless we will have a changed landscape in how both individuals and businesses interact with each other in future. That change will bring both opportunities and threats. For a sector which is (in large part) remote, the changes to virtual methods of communication and business may ultimately prove to some extent advantageous - subject to the ability of rural businesses to get adequate broadband connections - and for those businesses that require it, the ability to reopen physically. The continued rise on online sales throughout Covid-19 will doubtless add pressure on those retailers with a physical presence, but there may be some corresponding scope for offsetting at least part of the effect of that with increased online presence.
Time will tell what Covid-19 does to property prices. Pressures that existed before, in relation to support payments and the UK’s future trading relationships, have not gone away and will continue to bring influence. And that is not to mention the effect of record low interest rates. While there will doubtless be a Covid-19 effect in the property market, we must not forget that there remain longer term issues that will continue to impact both prices and parties long after the lockdown has been lifted. Perhaps there will be lifestyle and amenity buyers looking to relocate to greener pastures.
As lawyers supporting a range of rural families and businesses we have reconfigured how we now provide our services to clients remotely in ways, and indeed to effects, that were unforeseeable just a short time ago. While we look forward to seeing both clients and professional colleagues across the sector in due course, we remain open for business as ever.
Murray Beith Murray was established in 1849, as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day as does our commitment to be here when you need us.