Tenant farmers demand action as 4,500 acres leave rented sector

More than 4,500 acres have disappeared from the rented agricultural sector as shorter tenancies and rising farm sales deepen concerns over security for tenant farmers.

The Tenant Farmers Association (TFA) has urged Prime Minister Andy Burnham’s new government to intervene after the latest Agricultural Land Occupation Survey recorded a net loss of 4,510 acres from the let sector in England and Wales.

Compiled by the Central Association of Agricultural Valuers (CAAV), the survey drew on information from all 27 of its local associations. It covered decisions affecting 88,384 acres in the year to 31 October 2025.

The findings show a sharp decline in the number of Agricultural Holdings Act tenancies returning to the rental market after agreements ended.

These tenancies generally offer stronger and longer-term security than Farm Business Tenancies, which are typically more flexible and often shorter.

Historically, between 75% and 80% of Agricultural Holdings Act farms have been re-let when tenancies ended. In 2025, fewer than 53% returned to the rental market, while almost 23% were sold, compared with a typical rate of between 8% and 10%.

The average length of new Farm Business Tenancies fell from 3.97 years to 3.38 years, its lowest level since 2021.

When agreements lasting less than a year were excluded, the average dropped from 5.05 years to 4.65 years, the lowest figure since 2018. Almost 85% of all new tenancies were offered for five years or less.

TFA chief executive George Dunn said the decline was making it increasingly difficult for tenants to invest, plan for succession and build viable businesses.

“The TFA has consistently made the case that farm tenancies have been too short for too long,” he said.

“Short farm tenancies provide no basis for building sustainable farm businesses or addressing environmental and social needs in our rural areas.”

Dunn said the figures showed conditions were worsening rather than improving. The TFA believes changes announced in the 2024 Budget have weakened confidence among landowners, leading more of them to sell holdings instead of offering them to new tenants.

He said landlords who had previously granted secure agreements were becoming increasingly likely to sell farms when tenancies ended.

“This is a clear case of the market pushing things in the wrong direction and a sign that the Government must step in to correct that,” he said.

The association wants the government to use the tax system to encourage longer agreements. It is calling for landlords offering tenancies of at least 10 years to receive 100% inheritance tax relief on the value of the land covered by them.

The TFA argues that longer terms would give new entrants and expanding farmers greater confidence to invest, while supporting environmental management and rural communities.

Dunn said reports by Baroness Kate Rock and Baroness Minette Batters had supported the association’s view that tax reform could influence landlords’ decisions.

“This would incentivise such arrangements, providing the best prospects to support new entrants, progressive farmers and providing a basis for good environmental management,” he said.

The TFA believes the cost of the proposed inheritance tax incentive could be offset by restricting capital gains tax rollover relief.

The relief can defer tax when proceeds from an asset sale are reinvested in qualifying assets, including agricultural land. The association argues that its availability should be curtailed where purchasers may also benefit from inheritance tax relief later.

It intends to present the proposals to Burnham’s government after previous administrations rejected similar changes.

Dunn said the TFA hoped the new administration would “think more progressively about this policy change”.