Increased uncertainty in the agricultural sector encouraged both landowners and farmers to take a shorter-term view of agreements in 2025. That's according to the latest annual Agricultural Land Occupation Survey carried out by the Central Association of Agricultural Valuers (CAAV).

Drawing on all 27 of the CAAV's local associations across England and Wales, the 49^th survey covers land choices across 88,384 acres in the year to October 31, 2025. It found a net loss in let land of 4,510 acres, with the proportion of Agricultural Holdings Act (AHA) tenancies being re-let declining sharply. Historically, 75-80% of AHA tenancies have been re-let; this dropped to under 53% in 2025. At the same time, the proportion of units being sold when AHAs ended increased from a typical 8-10% to nearly 23%.

"Activity in the let sector remains overwhelmingly in terms of bare land," notes Jeremy Moody, secretary and adviser to the CAAV. "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."

Reflecting a climate of increased uncertainty over economics, schemes and taxation, the average length of Farm Business Tenancies (FBTs) declined to its lowest level since 2021, dropping from 3.97 years last year to 3.38. Excluding those tenancies shorter than a year, the average fell from 5.05 to 4.65 years – the lowest since 2018.  

"Over the years, these surveys have shown that periods of policy uncertainty see the average length of letting shorten," explains 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.

"It is typically the shorter lettings that shorten at such times, with little or no effect on longer lettings which have greater consideration and often investment involved in them."

As is usual, larger holdings were more likely to be let on longer terms than smaller units, with new entrants also offered longer terms; 79% of new entrants obtained tenancies of more than two years compared to 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."

Flexibility was the most common reason landlords gave for choosing the length of tenancy, cited by 37% of respondents, against 27% last year, while five per cent referred directly to uncertainty against two per cent last year. "Uncertainty increased in 2025, after the October 2024 Budget's Inheritance Tax proposals, alongside concern about schemes, economics and weather," says 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," he adds.

In Scotland, tenancy changes were made to 20,804 acres – down from 29,590 acres last year, with a net loss to the tenanted sector of 10,455 acres. The proportion re-let fell to 60% of holdings, down from 75% last year, while the average length of new tenancies declined from 4.31 year to 3.35 years – the lowest since this survey began in Scotland in 2011.

"Within the let sector, short bare land lettings remain the clearly predominant type of letting, and often just for interim management ahead of other uses - not using the full five years of a Short Limited Duration Tenancy," says Mr Moody. "Typically, only 10‐15% of lettings include a house in the traditional sense of a farm letting, but in 2025 it was just 5%. This leaves the continuing scale of the seasonal grass lettings market as the major means for flexibility alongside informal arrangements and contract farming. With the political risks seen in letting in Scotland, owners withdrawing from farming are often more comfortable with non‐tenancy arrangements."

·                 The full survey is available at https://shorturl.at/aSYOV