Growing uncertainty over tax, farm policy and profitability is prompting landowners and farmers to favour shorter tenancy agreements.
The average length of new Farm Business Tenancies (FBTs) fell to its lowest level since 2021 during 2025, suggest new figures. At the same time, fewer Agricultural Holdings Act (AHA) tenancies were re-let and more holdings were sold instead.
The move is reducing the supply of let land and raising concerns over future investment and productivity, says Jeremy Moody, of the Central Association of Agricultural Valuers (CAAV). Uncertainty is changing long-established behaviour in the tenanted sector – even rented land remains an important route for business expansion and new entrants, suggest the CAAV’s latest Agricultural Land Occupation Survey.
“Over the years, these surveys have shown that periods of policy uncertainty see the average length of letting shorten,” says Mr Moody. “Wider issues; from farming economics to housing legislation, underpin this reality. In practice, the survey shows a similar pattern to previous years but with a shortening of the shorter terms granted, fitting the recognised pattern of reactions to concern and uncertainty.”
Market pressure
The survey covered 88,384 acres across England and Wales to October 31, 2025. It recorded a net loss of 4,510 acres of let land. Historically, between 75% and 80% of AHA tenancies were re-let when they ended. In 2025 that fell below 53%.
Meanwhile, the proportion of holdings sold after an AHA tenancy ended rose from a typical 8-10% to almost 23%.
Activity remains dominated by bare land agreements, says Mr Moody. “This has been the case for many years and is often a cause of misunderstanding. Only a small minority of lettings (6.8% in 2025) are of what would conventionally be called ‘farms’ with a house, buildings and land.”
Entry prospects
The average FBT length fell from 3.97 years to 3.38 years. Excluding agreements of less than one year, the average declined from 5.05 years to 4.65 years.
Larger holdings continued to secure longer agreements. New entrants also fared relatively well, with 79% receiving tenancies lasting more than two years compared with 62.5% of other tenants.
“There may be seeds of change; 30% of new lettings where there was a change of tenant were to new entrants – the top end of the usual range. That could indicate the market opening up a bit.”
Landlords increasingly cited flexibility when deciding tenancy length, while concern over uncertainty also increased following the October 2024 Budget and proposed inheritance tax reforms.
“Uncertainty increased in 2025, after the October 2024 Budget’s Inheritance Tax proposals, alongside concern about schemes, economics and weather,” said Mr Moody. “Very few decisions were made in 2025 because of the Inheritance Tax changes but they infused the wider mood of uncertainty. However, access to land is a key tool to raise productivity, and the tenanted sector has a potentially salient role in answering British farming’s productivity challenge.”