Succession planning, strategic clarity and sharper scrutiny of business performance are set to be the priorities for farmers and landowners in 2026. Land and property specialists Strutt & Parker has identified eight themes likely to dominate the year ahead, with succession, strategy and scrutiny topping the list.

Kate Moisson, Head of Rural, says: "We are entering a pivotal period for the rural sector, with the current challenges underscoring the importance of both strategic planning and management excellence to keep farms and estates firmly on the front foot.

"It follows a testing year for land managers, with the proposed Inheritance Tax (IHT) reforms, erratic weather, volatile commodity markets, rising labour costs and changes in policy, putting many businesses under pressure.

"However, there is cause for cautious optimism. Land - and what it can offer society - has never been more in demand, opening the door to potential new income streams. We believe that opportunities for business growth and improvement are there for those who are willing to explore new approaches and act decisively."

Key themes for 2026:

1.     Succession planning moves to the top of the agenda

The Government appears determined to implement its planned IHT reforms on 6 April 2026. This creates a crucial – and narrowing – window for farms and estates to revisit their tax and succession plans with their professional advisors.

Businesses should ensure they are making full use of the reliefs that will remain available and assess options to reduce their liability. A current and accurate valuation will be essential to inform discussions.

2.     Farm profitability under sustained pressure

The combination of the loss of Basic Payments, extreme weather, weak commodity prices and rising labour costs means farm profitability will remain under strain. Arable incomes were hit hard by the 2025 spring and summer drought, with livestock farmers also facing forage shortages and high straw costs this winter.

Despite this challenging backdrop, there is room for improvement on many farms if businesses focus on the areas they can control – from budgeting and benchmarking to performance monitoring and de-risking. Those prepared to adapt and take a forensic approach to every detail of their business are the ones most likely to prosper in the years ahead.

3.     Strategic business planning comes to the fore

Lower margins and policy changes are prompting more farm and estate owners to look at their businesses holistically. A farm business review – or full strategic estate review – allows families to clarify their long-term goals and see if changes are needed to what they do and why.

An external perspective can be transformational, helping unlock new ideas, challenge assumptions and open up conversations that may have been delayed. Many businesses are already restructuring to improve efficiency and unlock new income streams and we expect this trend to accelerate through 2026.

4.     Rising regulation in residential property management

Let property is a major income stream for many businesses, but regulatory change is gathering pace. From 1 May 2026, the phased introduction of the Renters' Rights Act will begin, converting all Assured Shorthold Tenancies into periodic tenancies, abolishing Section 21 'no fault' evictions, and introducing new rent review procedures.

Alongside this, landlords face a 2% rise in tax on property income from April 2027 and tighter MEES rules from 2030. Returns may come under pressure, particularly where improving energy efficiency is difficult. However, rural landlords often take a longer-term approach and, if other landlords exit the market, rural portfolios may benefit from firmer rents and reduced void periods.

5.     Farmland market steady despite polarisation

The farmland market has become more polarised, but remains fundamentally resilient. Although average values softened slightly in 2025, they remain high by historical standards, with 60% of arable land in England still achieving more than £10,000/acre.

Caution, rather than lack of confidence, is shaping decisions. The IHT changes may trigger some sales, but a large increase in supply is not expected in the short term. Demand will vary by location, so some properties will take longer to find a buyer, but the underlying fundamentals are stable.

6.     SFI support to come back on-stream

The revised Sustainable Farming Incentive is expected to reopen in the first half of 2026 and demand is likely to be high. Farmers should start assessing which options could work for their farming system and model the financial impact in advance.

There are also other grants available, which are narrower in focus than the SFI, but still valuable. For example, many water companies offer schemes that support projects to improve water quality, reduce soil erosion and boost biodiversity. Other private sector funding opportunities for natural capital projects are also expanding.

7.     Diversification to accelerate as businesses spread risk

Diversification is set to play a bigger role in 2026 as farms and estates look to reduce their reliance on agricultural returns. Renewables, tourism, leisure, natural capital projects, commercial space and food enterprises are all gaining traction.

However, diversification must align with the wider farm or estate strategy, as projects can require significant capital, management time and specialist skills. Landowners are also increasingly looking for projects that enhance social value and bring positive benefits to their local communities.

8.     Making Tax Digital (MTD) for Income Tax takes effect

The Making Tax Digital for Income Tax initiative starts in April 2026 for sole traders and landlords with qualifying income over £50,000. Instead of submitting an annual tax return, people will be expected to make quarterly updates of income and expenditure to HMRC and then a final 'end-of-period' declaration. It is a change that adds complexity to reporting procedures and professional support may be needed. Partnerships, companies, trusts and certain special cases are currently excluded from the first phase of the rollout of the scheme, although HMRC expects to review this later.