Update on agricultural tenancies: what landowners and tenants need to know

28th Oct 2025

Author: Michael Bracegirdle

If you let or farm land under a tenancy, your tenancy terms shape daily decisions, investment plans and family succession. The Law Commission has signalled work within its 14th Programme of Law Reform to review aspects of agricultural tenancy law. Any eventual changes could influence how agreements are structured, managed and renewed. Mike Bracegirdle explains what may be under consideration and what practical steps you can take now.

The framework today

Most holdings are let under one of two regimes, unless they are a short-term grazing or licence agreement:

• Agricultural Holdings Act 1984 (as amended by the 1986 Act): Older agreements that offer the tenant greater security, including succession rights.
• Agricultural Tenancies Act 1995 – Farm Business Tenancies (FBTs): Modern agreement that are usually for a fixed term.

Both tenancy types carry obligations and opportunities.

Why a review is on the table

Landlords and tenants across the sector have suggested that updating parts of the law could help the tenanted sector work more effectively. Themes often raised include:

• Supporting productive, sustainable businesses: Clearer rules may give confidence to invest in soil health, buildings, drainage and infrastructure.
• Enabling sensible diversification: Some Tenants report that current terms can make non-farming activities harder to agree, even where they would complement the farm.
• Balancing interests fairly: Landlords need confidence to let land; Tenants need confidence to invest. A workable balance is essential.
• Creating opportunities for new entrants: A predictable market can help bring the next generation into farming.

These are intentions rather than guarantees. Any eventual reforms will depend on consultation, policy choices and Parliamentary time.

What might be considered?

While details will emerge through the Law Commission’s process, discussion in the sector often focuses on:

• Practical fixes: Streamlining processes around notices, consents, assignments or records to reduce delay and dispute.
• Investment recognition: Exploring mechanisms that reward sensible Tenant investment while maintaining a Landlord’s ability to recover possession.
• Diversification clarity: Giving clearer routes to agree non-farming uses that support the core business and local communities.
• Pathway for entrants to the sector: Encouraging terms that help new farmers access land on viable foundations.

Practical steps for Landlords and Tenants

You do not need to wait for new legislation to put your affairs in order. Consider the following:

• Audit your agreement. Check the basics: parties, plan, term dates, rent review clauses, repair obligations, insurance, and consents for diversification or environmental schemes.
• Document what you invest. Keep a record of improvements, fixtures, and agreements about contributions. Clear evidence helps at rent reviews and at end of term.
• Talk early about change. If you are considering a new enterprise, speak to the other party before committing funds. A short side letter can save a long dispute.
• Plan for handover. If you hold an AHA 1986 tenancy, understand the succession rules. For FBTs, review renewal and end-of-term options well in advance.
• Align with environmental opportunities. Whether you are a landlord or a tenant, check how your agreement interacts with stewardship or private environmental markets, including who holds the obligations and benefits.
• Get advice before serving or responding to notices. Timetables can be tight and technical. Early expert guidance usually keeps options open.

 

A balanced perspective

Many owner-occupiers rent additional land under FBTs to increase herd numbers or to improve profitability through economies of scale. Many Landlords rely on rental income to support long-term stewardship of buildings and habitat. A fair, modern framework should give Tenants enough certainty to invest and allow Landlords to recover possession in genuine circumstances, such as redevelopment or reorganisation, where the contract and the law permit.

 

How can Butcher & Barlow help

Butcher & Barlow is a full-service Firm with a dedicated Agricultural and Rural Affairs Team. We advise Landlords and Tenants across the North West and North Wales on Agricultural Holdings Act 1986 tenancies, Farm Business Tenancies, diversification, succession, rent reviews and dispute resolution. Our approach is practical, personable and focused on helping you make informed decisions for your farm or estate.

If you would like to review your tenancy or discuss proposed changes, please contact our Agricultural and Rural Affairs Team or complete our online enquiry form. We will arrange a convenient time to talk.

Mike can be contact on mbracegirdle@butcher-barlow.co.uk or on 01606 334309.

FAQ’s

1. Do I need consent to diversify under my FBT?
   A. Usually yes. Most Farm Business Tenancies limit use and require Landlord consent for non-core activities. Check your user clause, any pre-conditions (planning, insurances), and whether works create fixtures. Agree scope, duration and reinstatement in writing before you invest. If wording is unclear, take advice to avoid an accidental breach.
2. What documents should I gather before I ask for diversification consent?
   A. Have your Tenancy, plan, any side letters, a short proposal (what, where, how long), and details of works, services, access, and insurance. If planning is needed, note that too. Bringing these to the first discussion speeds up decisions and reduces queries.
3. How do AHA 1986 succession rights work in practice?
   A. Succession is available only in defined circumstances and strict time limits apply. The successor must meet statutory tests and notices must be served on time. Gather evidence of principal source of livelihood and agricultural occupation early. Because timing is critical, speak to us as soon as succession may be relevant.
4. What should I prepare for a rent review?
   A. Read the rent review clause and timetable. Assemble records of yields, stocking, improvements, exceptional costs, and any Landlord contributions. Clarify which items are disregarded or treated as Tenant’s improvements. Early exchange of information helps narrow points of difference.
5. Could reforms change my current position?
   A. Possibly, but not overnight. Any change would follow consultation and legislation. Keep good records, avoid informal variations that conflict with the written Tenancy, and be ready to adjust plans once details are confirmed.
6. Can I assign or sublet my Tenancy?
   A. Only if the agreement allows it. Many FBTs restrict assignment and subletting or require consent. Check conditions carefully, including user, term, and any guarantees. Take advice before marketing or agreeing heads of terms.
7. What is the risk of a ‘surrender & regrant’?
   A. If you materially vary key terms (for example, extend term length or add significant land), you may inadvertently end one Tenancy and create a new one. That can affect security, repair obligations, and rent review bases. Get the structure right before you sign.
8. How do environmental schemes interact with my Tenancy?
   A. Confirm who is the agreement holder, who bears obligations, and who receives payments. Check user clauses, access for surveys, and responsibility for reinstatement. Record allocations of risk and benefit in a side letter to avoid dispute at rent review or end of term.

 

 

The information in this article was correct at the time of publication. The information is for general guidance only. Laws and regulations may change, and the applicability of legal principles can vary based on individual circumstances. Therefore, this content should not be construed as legal advice. We recommend that you consult with a qualified legal professional to obtain advice tailored to your specific situation. For personalised guidance, please contact us directly.