Agricultural Rent Reviews: How Farm Rents Are Assessed and Negotiated

What Is an Agricultural Rent Review?

A farm rent review is the process by which the rent payable under an agricultural tenancy is reconsidered at an agreed or statutory review date. In many cases the landlord and tenant negotiate a revised figure and record the agreement without formal determination.

Where agreement cannot be reached, agricultural tenancy legislation provides formal routes for determination.

Under the AHA regime, a statutory review is generally available three years after the start of the tenancy or previous review. FBT parties have greater contractual freedom and may agree different review intervals.

Where the statutory FBT mechanism applies, a written review notice must specify a review date at least 12 months but less than 24 months after the notice is given.

What the Current Farm Rent Data Shows

The latest official rent evidence available in October 2026 is Defra's Farm Rents in England 2024/25 release.

Across all agreement types, LFA grazing livestock farms averaged £93 per hectare while dairy farms averaged £285 per hectare. For land-only agreements, the average was £242 per hectare for FBTs and £172 per hectare for Full Agricultural Tenancies.

Full Agricultural Tenancy rents in the North East, Yorkshire & Humber averaged £183 per hectare in 2024/25.

Rent review outcomes are wider than the averages suggest

Only 17% of agreements in the 2024/25 Farm Business Survey had a recorded rent review.

The average result was an 8% increase, but the median movement was only around 3%. One quarter of reviews produced a reduction of at least 7%, while one quarter produced an increase of at least 14%.

A rent review is therefore not automatically an upward review. The correct result may be an increase, a reduction or no change at all.

AHA and FBT Reviews Use Different Frameworks

Comparable evidence should not be applied mechanically across the two regimes. A competitively tendered FBT can contain a different package of rights, responsibilities and term length from a protected AHA tenancy.

The headline £/acre or £/hectare figure does not make the two directly comparable.

How an AHA Rent Review Is Assessed

Under the Agricultural Holdings Act 1986, the statutory formula is more structured than a simple open-market letting exercise.

Schedule 2 requires consideration of the rent at which the holding might reasonably be expected to be let by a prudent and willing landlord to a prudent and willing tenant.

Relevant factors include the tenancy terms, character and situation of the holding, productive capacity, related earning capacity and rents for comparable agricultural lettings.

Productive capacity and related earning capacity

Productive capacity is assessed on the assumption that the holding is occupied by a competent tenant using a farming system suitable for the property.

Related earning capacity considers the profit such a tenant could reasonably be expected to generate from farming the holding.

Comparable evidence has to be genuinely comparable

The valuer should consider whether other holdings have similar land quality, buildings, dwelling provision, fixed equipment, location, size and tenancy obligations.

The statutory test also requires certain elements to be disregarded, including rent attributable to scarcity and value created because a bidder already occupies adjoining land.

Tenant improvements and condition can change the analysis

A tenant should not normally be charged rent on value created at their own expense.

The AHA legislation therefore requires specified tenant improvements and tenant-provided fixed equipment to be disregarded, subject to the detailed statutory exceptions.

How FBT Rent Reviews Are Assessed

The agreement comes first

FBTs were designed to provide greater flexibility. Landlords and tenants can agree the initial rent and, within the statutory rules, determine how and when it will be reviewed.

Some agreements use open-market reviews, while others use a specified formula or fixed increases.

The statutory open-market test

Where the statutory FBT review provisions apply, section 13 of the Agricultural Tenancies Act 1995 defines the rent by reference to an open-market letting between a willing landlord and willing tenant, taking the relevant tenancy terms into account.

Increases in rental value created through qualifying tenant improvements are generally disregarded. The arbitrator must also disregard the fact that the sitting tenant is already in occupation.

What Evidence Matters in a Farm Rent Review?

A robust assessment starts with the tenancy documents. The review clause, term, repairing obligations, fixed equipment provisions, user restrictions, diversification rights and side agreements establish what is actually being valued.

The holding should then be inspected. Land quality, field size, access, drainage, water, buildings, farmhouse accommodation, livestock facilities, storage and fixed-equipment condition can all affect the analysis.

Comparable transactions should be recent, local and genuinely similar in terms of land type and tenancy package.

Environmental schemes and diversification also need individual consideration where they affect income, obligations or the productive characteristics of the holding.

How Agricultural Rent Reviews Are Negotiated

Start well before the review date

The strongest negotiations usually begin with the timetable.

Statutory notices are technical documents and the effective date can depend on the tenancy anniversary, contractual review dates and relevant legislation. Missing the required date can postpone a review.

Negotiate the evidence, not just the headline number

A productive negotiation normally involves an inspection followed by an exchange of evidence and reasoned proposals.

The discussion should explain why particular comparables have been selected, what adjustments are required and how the physical and contractual characteristics of the holding affect the result.

Our rural landlord and tenant service acts for landlords and tenants on both AHA and FBT reviews. We assess the holding, tenancy and market evidence before negotiating the rent rather than starting with a target percentage.

What Happens if Agreement Cannot Be Reached?

If negotiation fails, the legislation provides formal dispute-resolution routes.

The Agriculture Act 2020 modernised the AHA process so rent disputes can be resolved by arbitration or, where agreed, third-party determination.

RICS, the Central Association for Agricultural Valuers and the Agricultural Law Association can have roles in appointments under the statutory framework.

A Rent Review Can Go Down as Well as Up

The latest Defra evidence is particularly useful on this point.

Although the average recorded rent review in 2024/25 resulted in an 8% increase, 25% of reviews produced a fall of at least 7%, while the median outcome was around a 3% increase.

For Full Agricultural Tenancies, the average review increase was only 4%, and the middle 50% of recorded outcomes ranged from no change to a 10% increase.

The figures reinforce that an agricultural rent review is an evidence-led valuation exercise, not a predetermined ratchet.

Common Problems in Farm Rent Negotiations

Relying too heavily on average rents

Average rent per hectare can provide useful market context, but it can conceal major differences in land quality, farm type, buildings and tenancy terms.

Using inappropriate comparables

A tendered FBT, adjoining land let to a neighbour or a bare-land grazing block may contain special value that does not exist in the subject holding.

Failing to separate landlord and tenant investment

If the tenant has funded buildings, drainage or other qualifying improvements, the rental effect may need to be disregarded. Landlord-funded improvements can alter the rental position depending on the circumstances and legislation.

Treat the Rent Review as Part of the Wider Tenancy Strategy

Rent should not be reviewed in isolation from the rest of the tenancy.

Repair obligations, environmental agreements, succession, surrender discussions, diversification and future estate plans can all affect the commercial relationship.

Our wider rural consultancy and estate management work considers agricultural rent reviews within that broader context.

A fair farm rent is not necessarily the highest figure that can be argued, nor is it simply the previous rent adjusted for inflation.

It should reflect the statutory or contractual basis of review, the rights and liabilities in the tenancy, the quality and capabilities of the holding and the evidence available at the review date.

For AHA tenancies, productive capacity, related earning capacity and properly adjusted comparable evidence remain central.

For FBTs, the agreement and open-market evidence generally play a greater role, but the detailed terms still determine whether a comparison is meaningful.

The most effective farm rent negotiation is therefore prepared early, supported by inspection and relevant evidence, and conducted with a clear understanding of the formal route if agreement cannot be achieved.

Further information on agricultural rent reviews, tenancy negotiations and rural property arrangements is available through our rural landlord and tenant service.