England farm sales reach two-decade high as costs and tax changes pressure small holdings

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England farm sales under pressure

Highlights

177 farms listed for sale in England in H1, marking a 16 percent rise over the five-year average and the highest since 2007.
Arable land prices fell 6 percent and pasture values dropped 3 percent year-on-year in H1 due to high input costs and weak wheat prices.
Inheritance tax relief changes, with a threshold lifted from £1mn to £2.5mn effective April 2026, drove farmer purchases up to 59 percent and reduced lifestyle buyers to 11 percent.

Sales activity and market pressures

As reported by Financial Times, 177 farms in England were put up for sale in the first half of the year, the highest total for any six-month period since 2007 and 16 percent above the five-year average, based on data from land agent Strutt & Parker.

Sam Holt, head of estates at Strutt & Parker, said smaller farms are mainly driving the increase in listings after several difficult years for the industry. He said rising fuel, fertiliser and machinery costs, alongside heavy rain, drought and falling subsidies, have cut farm income and raised questions over how sustainable it is to keep running smaller operations.

Arable farmers are under particular pressure from high fertiliser costs and weak wheat prices. That is also showing up in land values, with arable land prices 6 percent lower in the first half of the year than a year earlier, while pasture land values are down 3 percent.

The average farm brought to market so far this year is 330 acres, and Strutt & Parker classifies farms under 500 acres as small holdings.

Policy changes reshape farmland demand

The number of farms across the UK continues to decline as larger operators absorb smaller businesses facing financial strain. Data from farm consultancy the Anderson Centre shows the number of full-time farms falling from 66,510 in 2000 to 55,980 in 2010 and 51,350 in 2025.

Post-Brexit changes to agricultural support in England are also affecting profitability. Direct payments under the EU's Common Agricultural Policy are replaced from 2021 by a system that requires farmers to apply for funding tied to environmental measures such as cutting pesticide use and planting more diverse crops to improve soil health.

A government-commissioned review last year found food production is no longer profitable for the average English farm and that nearly a third of farms in Great Britain are lossmaking, partly because of the transition to the new subsidy regime.

Sentiment has also been hit by inheritance tax reform. The government said in 2024 it was removing inheritance tax relief for farmers with assets above £1mn from April 2026, before later raising the threshold to £2.5mn after industry lobbying.

That change is reducing interest from non-farming buyers. Strutt & Parker said farmers accounted for 59 percent of farm purchases in 2025, the highest share in seven years, while the share of lifestyle buyers fell to 11 percent last year from 20 percent five years earlier.

In our earlier article on Labour’s fiscal pressures ahead of a leadership transition, we outlined how a weaker growth outlook and rising inflation could limit room for manoeuvre on public spending and borrowing. We also noted that sticking to tight fiscal rules may force difficult trade-offs as the next government tries to pursue growth ambitions while maintaining market confidence.

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