UK Farm Tenancies 2026: A Working Tenant Farmer’s Guide to FBTs, AHA Holdings, Rent Reviews and What to Negotiate

Last updated: May 2026. This guide explains how Farm Business Tenancies under the Agricultural Tenancies Act 1995 work alongside the older Agricultural Holdings Act 1986 tenancies, what changes with rent reviews, succession, notice and fixed equipment, and how SFI and the tail of BPS payments cut for working tenants. Written from the tenant side of the gate. It is general information, not legal advice. See the negotiation section for what to push for at the next renewal.

The arable bit of our place is on a three-year Farm Business Tenancy. We signed it two seasons ago when the previous tenant retired and the landlord, a private estate two parishes over, offered the block on a short term so they could keep their options open. Three years was as much as we’d take and as little as they’d give. The break clause sits at month 18.

The night I came home with the heads-of-terms, the missus read them through over a cup of tea and asked the only question that matters: what happens if we drill a long-rotation crop in year two and the landlord serves notice in month 18? The answer in the contract was, in plain English, you lose your standing crop. The answer we put back to the agent the next morning was different.

That is the conversation every tenant farmer in England is now having, in some version. AHA tenancies still exist and still carry the lifetime succession rights they always did. Anything new since 1 September 1995 is an FBT, and FBTs are a different animal: short, commercial, no statutory succession, only the protections you can write into the contract before you sign. This guide is what I wish I’d had on the kitchen table the night before that meeting.

Two regimes, side by side

There are, broadly, two statutory worlds for agricultural tenants in England and Wales.

The older one is the Agricultural Holdings Act 1986.[1] AHA tenancies gave the tenant something close to a job for life: lifetime security of tenure, two generations of statutory succession on death or retirement, arbitrated rents on a three-yearly cycle and the formal Model Clauses for repairing obligations. From 1 September 1995 you can no longer create a new AHA tenancy. The Tenant Farmers Association estimates AHA agreements still cover roughly a third of the let area in England, but the proportion shrinks every year as successions run out and holdings convert to FBTs on regrant.[2]

The newer one is the Agricultural Tenancies Act 1995, which created Farm Business Tenancies.[3] FBTs are essentially a freedom-of-contract regime with a thin statutory floor. There is no statutory succession. No lifetime security. The term is whatever the parties agree, the rent is whatever the parties agree, and the rent-review formula falls back to the open-market test in section 13 of the 1995 Act only if the contract is silent.

The practical difference is enormous. An AHA tenant carrying a third-generation succession is, in commercial terms, a perpetual occupier paying a regulated rent. An FBT tenant on a three-year term is a contractor with a deadline.

Defra’s tenanted-sector data puts the let area in England at around 2.6 million hectares, roughly a third of the agricultural land base, with the average FBT length still hovering at the wrong end of five years.[4] Short tenancies do not let tenants invest, and short tenancies are what landlords keep offering. That is the argument the sector has been having with Defra for a decade.

Rent reviews: where the money actually moves

On an AHA, rent review is statutory. Either party can serve a section 12 notice no more frequently than every three years, and if the parties cannot agree the rent goes to arbitration on the formula in schedule 2 of the 1986 Act: the rent a prudent and willing landlord might reasonably expect from a prudent and willing tenant, taking productive capacity, comparable rents and any scarcity element into account.[5] In practice that produces rents materially below open-market FBT levels, often by 30% to 50% on like-for-like land.

On an FBT, the position depends entirely on the contract. Section 13 of the 1995 Act provides a fallback open-market review every three years if the agreement does not exclude it.[6] Most FBTs do exclude it. The standard heads of terms contain one of three patterns: a fixed rent with no review at all on a 3 or 5-year FBT; an RPI or CPI uplift, capped and collared, on a 7 or 10-year FBT; or a formal open-market review, often referenced to the Central Association of Agricultural Valuers (CAAV) annual tenanted survey, on the longer terms.[7]

RPI-linked clauses with a 0% floor and a 4% or 5% cap are the most predictable and, in the 2022-2025 inflation, often the best deal a tenant got. CPI-linked is better than RPI for the tenant in most years. Watch for any clause that hands the review to the landlord’s nominated surveyor with no right of appeal; that is not market-standard and is worth pushing back on.

The RICS Red Book sets the valuation methodology, and the CAAV and TFA each publish annual rent surveys an arbitrator will treat as comparable evidence.[8] Get the latest CAAV survey before any review. The biggest mistake I see neighbours make is going into a rent review without knowing what comparable lettings actually closed at in the previous twelve months. Keep a rent-review file with three years of management accounts, gross margin schedules, drainage investments and dilapidations correspondence. Without it you are negotiating on feel.

Succession: the AHA exception, and what FBT tenants don’t have

This is the cleanest contrast between the two regimes.

An AHA tenancy granted before 12 July 1984 carries statutory succession rights for two generations after the original tenant. Sections 34 to 59 of the 1986 Act set out the eligibility tests: the applicant must be a close relative, must have derived their principal source of livelihood from the holding for five of the last seven years, must be commercially competent, and must not occupy another commercial unit above a defined threshold.[9] The Agricultural Land Tribunal decides contested cases. AHA tenancies granted between 12 July 1984 and 1 September 1995 do not carry statutory succession. Anything granted from 1 September 1995 is an FBT and has no succession rights at all.

For an FBT tenant, what happens at end of term is what the contract says. There is no statutory right for a son or daughter to step into the tenancy. The TFA has campaigned for over a decade for a longer minimum FBT term and some form of soft succession at end-of-term, and the 2022 Rock Review recommended a Tenant Farming Commissioner for England, longer minimum terms and a ban on landlord-only break clauses inside the first eight years.[10] Defra has progressed parts of the response, but the headline statutory reforms have not happened.

If you are a third-generation AHA tenant with a son or daughter coming through, get the succession paperwork in order years ahead of need, with a STEP-qualified solicitor running it. If you are an FBT tenant, succession is a contractual question, not a statutory one. Renewal options, rights of first refusal, sublet rights to a partnership including the next generation: things landlords will sometimes give in exchange for term length, rent or repairing obligations.

Notice periods and end-of-tenancy

On an AHA, a landlord wishing to recover possession must serve a notice to quit and, if the tenant counter-notices, persuade the Agricultural Land Tribunal that one of the cases in schedule 3 of the 1986 Act applies. The default notice period is twelve months expiring at the end of a year of the tenancy.[11] Lifetime security, in practice, means the landlord can only get the tenant out for cause.

On an FBT of two years or less, the contract ends on its end date with no notice required. On an FBT of more than two years, section 5 of the 1995 Act requires written notice of at least 12 months and not more than 24 months before the end date for the tenancy to terminate on its term date; otherwise it continues from year to year, terminable on twelve months’ notice.[12] Break clauses are governed by the contract. A 3-year FBT with a month-18 break clause on six months’ notice either way is short, sharp and asymmetric in the landlord’s favour.

On any FBT longer than two years, the diary entries that matter are the two anniversaries before the term end and any break-clause window. Miss either and the tenancy may continue, or end, on terms you did not intend. We keep these dates pinned to the office wall. So should you.

Fixed equipment: the clause that bites

Fixed equipment is the catch-all for buildings, fences, walls, hedges, gates, roads, yards, ditches, drains and fixed plant. Who maintains what, who renews what, and who gets paid for what at end of tenancy is governed differently under the two regimes.

Under the AHA, the Agriculture (Model Clauses for Fixed Equipment) (England) Regulations 2015 apply automatically unless the parties agree otherwise. They split repairing obligations on a fixture-by-fixture basis, with the landlord typically responsible for structural and external matters and the tenant for internal and routine.[13] Familiar territory to any agricultural land agent, and a fertile source of dispute on dilapidations claims.

Under an FBT, there is no equivalent statutory model. Repairing obligations are whatever the contract says. The standard CAAV-drafted FBT pushes more of the repair burden onto the tenant than the AHA Model Clauses would, often with a “full repairing and insuring” baseline, and a schedule of condition appended to record the state of fixed equipment at the start. The schedule of condition is the single most important document a tenant will sign. Without it, you carry the risk of being charged for dilapidations that pre-existed the tenancy.

On a heavy clay block in Suffolk, working drainage is the difference between a profitable rotation and a write-off year. If the landlord owns the field drains and they are blocked, an unmodified FBT often makes the tenant responsible for clearing them and offers nothing back at end of term for any improvement. Negotiate this explicitly.

Glasshouses, packhouses and polytunnels on an FBT are usually treated as tenant’s improvements rather than fixed equipment of the holding. Sections 16 to 27 of the 1995 Act allow a tenant to claim compensation for an improvement carried out with the landlord’s prior written consent, on the basis of the increase in the value of the holding at the date of quitting.[14] No prior written consent, no compensation. Get every material improvement consented in writing before the spade goes in the ground.

Fixed equipment is the second clause I read on any FBT, after term and break. The schedule of condition gets agreed before signature, with photographs, or the deal does not happen.

SFI, the tail of BPS, and what tenants can claim

The agri-environment regime has shifted under tenants’ feet twice in five years, and the rules cut differently for AHA tenants, long FBT tenants and short FBT tenants.

The Basic Payment Scheme is in delinking phase-out. Defra has confirmed delinked payments will be paid in declining amounts to those who claimed BPS in the 2023 reference period, with the final payment in the 2027 scheme year.[15] If you took on the tenancy after 2023, you get nothing regardless of what the previous tenant received. The payment follows the 2023 claimant, not the land. That has been a source of friction on tenanted blocks where the previous tenant retired in 2024 and walked away with four more years of delinked payment.

The Sustainable Farming Incentive is the replacement route. The 2024 SFI offer paused for new applications in March 2025 after the Defra budget was committed; an SFI 2026 offer reopened with a redesigned action set, payment caps and tenancy rules.[16] The headline rule for tenants is that you must have management control of the land for the duration of the agreement: a tenancy long enough to run the agreement plus, in practice, landlord’s written consent if your tenancy is shorter or contains a landlord-only break inside it.

Three practical points. First, if your FBT has a landlord-only break inside the SFI window you need landlord consent and you need to know who carries the clawback if SFI ends the tenancy mid-stream. Second, negotiate the share of SFI income; the TFA’s position is that it should follow the tenant who undertakes the work.[17] Third, watch the rent-review interaction; an open-market review on an FBT with significant SFI income in the accounts can pull the rent up unless the contract excludes agri-environment income from the comparable evidence.

The interaction with the 2026 inheritance tax reforms is covered in the farm inheritance tax 2026 guide. For tenants, landlords with large let portfolios are quietly reviewing their options under the new £2.5 million APR cap, and that conversation will reach you eventually if you are inside an AHA tenancy on a high-value estate.

The 3-year, 5-year, 10-year decision

If you are negotiating an FBT now, term length is the single most important commercial dial you have. The rent, the review formula, the fixed-equipment clauses and the SFI consent rules all sit downstream of how long the contract runs.

A 3-year FBT is what landlords offer when they want flexibility. From the tenant side it is a contractor’s contract: rent is rent, no review, no real investment in fixed plant, build a rotation that fits a 3-year horizon. We took our arable block on a 3-year FBT because the alternative was not having the block at all, and the rotational fit with the salad enterprise earned its keep on soil-health grounds even at three years.

A 5-year FBT is the common compromise on commercial holdings. It allows a full break-crop sequence, supports a Countryside Stewardship Mid-Tier agreement, and gives both sides predictability. A single RPI/CPI review at year three becomes the live commercial conversation.

A 10-year FBT is what you push for if the holding will support real investment: solar on a packhouse roof, a cover-crop programme that needs five seasons to bed in, NVZ infrastructure, or any tenant-right improvement that needs years to recover its cost. The TFA, NFU and CLA have all called for longer minimum FBT terms; the Rock Review recommended a default 10-year minimum for new FBTs of bare land.[18] Statutorily that has not happened. Commercially, the best deals tenants now sign are often 10 years with a mid-term break tied to specific cause, RPI uplifts and an enforceable end-of-tenancy compensation regime for fixed plant.

What I’d actually do, given the bargaining position to do it: sign the longest term you can get, with an RPI or CPI rent-uplift, a break clause that only operates on landlord cause (planning, sale, change of use), a written schedule of condition, prior written consent for material improvements booked into the agreement, and the right to enter SFI and Countryside Stewardship without needing separate landlord consent each time.

What working tenant farmers should negotiate at renewal

This is the running set of clauses the TFA’s standing advice flags as most-disputed and most-valuable to the tenant. It is the list I will be carrying into our renewal conversation when the 3-year FBT comes up for the option of extension.[19]

1. Term length and break clauses. Push for the longest term you can get. Resist landlord-only break clauses inside the first half of the term. If a break is unavoidable, attach it to specific causes rather than a general at-will break.

2. Rent and rent-review formula. Prefer RPI or CPI with a cap and a floor over open-market reviews on short tenancies. Exclude agri-environment income from any open-market test.

3. Schedule of condition. Done by an agreed surveyor, with photographs, before you sign. Without this, dilapidations risk at end of term is uncapped.

4. Fixed equipment, repairing and renewal. Negotiate the split of repair, renewal and compliance-driven capital, with particular attention to drainage, slurry stores, NVZ infrastructure, packhouses, glasshouses and any tenant-installed plant.

5. Improvements consent and compensation. Standing right to seek the landlord’s written consent for specified improvements, consent not to be unreasonably withheld, and a clear path to s.16-27 end-of-tenancy compensation.

6. SFI and agri-environment. Pre-agreed landlord consent for multi-year agreements that overlap the term, with clear allocation of income, clawback risk and rent-review impact.

7. Sublet and partnership. Right to bring a son, daughter or partner into the tenancy through a partnership without triggering a breach. This is the only “succession” you will get on an FBT, and it has to be drafted in.

8. Renewal and right of first refusal. A contractual renewal option, properly priced, beats a soft expression of intent.

9. Diversification and Class Q. An explicit position on Class Q permitted-development conversions, who can apply, who keeps the value uplift, and how the rent reacts. See the Class Q & R guide for the planning side.

10. Dispute resolution. CAAV-route arbitration or expert determination, agreed in advance, on rent review and dilapidations.

Take that list to your land agent before you take it to the landlord. A good agent rebalances it for your specific holding. A poor one will tell you the standard FBT is the standard FBT and there is nothing to negotiate. There always is.

Where this is heading

The 2022 Rock Review gave the tenanted sector its most coherent reform agenda in twenty years.[20] The Government has acted on the soft recommendations (a Tenant Farming Forum, a Code of Practice consultation, a commitment to design future agri-environment schemes with tenants in mind), but the hard ones (longer minimum FBT terms, a ban on landlord-only break clauses inside the first eight years, a Tenant Farming Commissioner for England with statutory powers) have not been legislated. The TFA pushes. The CLA pushes back, on the principle that statutory minimums reduce the supply of land coming forward for letting. Both sides have a point.

For working tenants in 2026, none of that helps the renewal conversation already on the table. The contract is the contract. The clauses you negotiate now are the clauses you live with for the term.

If you take one thing from this guide, take the schedule of condition. Photograph every gate, every drain inlet, every roof line, every yard surface, every fitting in every building, before you sign. Get the photographs witnessed and timestamped. File them where your land agent can find them in five years’ time. It is the document that will quietly save you five-figure sums at end of tenancy, and it costs you a wet Saturday afternoon to do properly.

The rest is the work.