Understanding Tenancy Options When Letting Agricultural Land
September 2026
By Clover Kellett, Apprentice Rural Surveyor
Letting agricultural land can provide landowners with a valuable source of income, support local farming businesses and ensure that land continues to be actively and productively managed. However, selecting the right form of agreement is an important consideration.
There are several ways in which agricultural land can be let or occupied, with each arrangement offering different levels of flexibility, security and responsibility for both parties. The most appropriate option will depend on a range of factors, including the type of land, its intended use, the length of occupation and the landowner’s longer-term plans.
Understanding the principal forms of agricultural occupation can help landowners establish an arrangement that protects their interests while providing the occupier with the certainty required to manage the land effectively.
Farm Business Tenancies (FBTs)
Farm Business Tenancies, commonly known as FBTs, were introduced under the Agricultural Tenancies Act 1995 and are the principal form of tenancy used for most new agricultural lettings.Key features:
- Flexible terms — can be short or long-term.
- Freedom to negotiation terms — to reflect the land, farming system and objectives of both parties.
- Rent reviews — can be agreed between parties; otherwise, statutory 3 year reviews apply.
- Greater certainty for landowners — without the extensive succession provisions associated with older Agricultural Holdings Act tenancies.
When suitable: FBTs are appropriate for a range of agricultural property, from parcels of grazing or arable land through to complete farms and more diverse rural holdings. They balance flexibility with legal clarity and are the preferred option for most new lettings.
Grazing Licences & Short-Term Agreements
For landowners looking for a shorter-term or seasonal arrangement, a grazing licence may be appropriate. These grant a licence to occupy land for grazing only, typically for less than 12 months and do not confer exclusive possession therefore are in favour of the landlord.Key features:
- Short-term or seasonal use — often April to October.
- No exclusive possession — particularly where the land may be required for another purpose in the future.
- Defined use - such as grazing livestock rather than broader agricultural occupation.
When suitable: This type of arrangement can work particularly well where pasture is available for seasonal grazing or where a landowner wishes to retain greater involvement and flexibility over the land.
Agricultural Holdings Act (AHA) Tenancies
AHA tenancies apply to agreements created before 31st August 1995 and remain one of the most protective forms of agricultural occupation for tenants. They are now rare for new lettings but still cover a significant portion of existing tenanted land.Key features:
- Strong security of tenure in favour of the tenant — statutory provisions governing how and when possession may be recovered.
- Succession rights — up to two generations may inherit the tenancy if criteria is met and tenancy created before 12 July 1984.
- Rent reviews — governed by statutory procedures.
- Compensation — tenants may claim for authorised improvements.
When suitable: AHA tenancies are principally relevant when dealing with existing agricultural tenancies rather than establishing a new letting. Where land is already occupied under an AHA tenancy, understanding the precise terms and statutory protections attached to it is essential before considering changes to the occupation, rent or future management of the holding.
Choosing the Right Structure
| Agreement Type | Security of Tenure | Flexibility | Suitability |
|---|---|---|---|
| FBT | Moderate | High | Most modern lettings |
| Grazing Licence | None | Strong | Seasonal grazing |
| AHA Tenancy | Very high | Low | Existing historic tenancies |
There is no single agreement that will suit every agricultural letting. Before land is offered to the market, landowners should consider how long they are prepared to commit the land, the type of farming activity they wish to permit, the level of control they want to retain and their longer-term plans for the property.