Farm Rents data shows mixed picture in England

The latest Farm Rents statistical notice from Defra reveals a mixed picture for agricultural tenants in England, with some convergence emerging between tenancy types.

Covering the period from March 2024 to February 2025, the figures are already somewhat historic for current rent reviews.

However, they suggest a growing confluence between rents under Agricultural Holdings Act 1986 (AHA) agreements and farm business tenancies (FBTs).

See also: Tenanted farm sector slows as short lets persist

Notably, rents on lowland livestock farms were lower under FBTs than AHA agreements – a reversal of assumptions often made in negotiations.

The average annual rent for full agricultural tenancy (FAT) agreements fell by 6% in current prices to £174/ha in 2024-25, a 10% drop in real terms. FBT rents rose 4% to £230/ha, representing little real-terms change.

Informal agreements saw the strongest growth, up 8% to £253/ha, while seasonal lets edged up 2% to £166/ha but fell in real terms.

According to the Tenant Farmers Association (TFA), average FBT rents recorded in the survey are significantly lower than the headline figures often cited by landlords’ agents.

For example, average FBT rents were just over £110/acre for cereal farms and £83/acre for general cropping – well below the levels sometimes used as leverage in rent negotiations.

‘Mixed bag’ – TFA boss

Responding to the data, TFA chief executive George Dunn described the results as a “mixed bag”. While AHA rents broadly reflected discussions in the market, he said the FBT data challenged inflated perceptions of prevailing rates.

However, he warned that the overall number of tenancies continues to decline. AHA agreements have fallen by about 11%, with FBTs also down 7%, suggesting the tenanted sector is shrinking rather than transitioning.

Mr Dunn called for stronger tax incentives to encourage long-term letting, criticising the government’s refusal to amend the Finance Bill to support landlords offering longer agreements.

Legal expert’s view

Maddie Dunn, legal director at Charles Russell Speechlys LLP, added: “The growth of higher rent informal farm agreements may be masking stronger underlying increases in FBT rents.

“With many of these longer-term informal arrangements likely to be unwritten FBTs, the relatively modest real terms movement shown in the formal FBT data may not capture the full picture of rent inflation in the sector.

“This trend also strengthens the case for incentivising longer term, formal tenancies, as highlighted in the recent Farming Profitability Review led by Dame Minette Batters.”