English farmers exit industry

More English farms are up for sale than at any time in the past two decades, as rising costs, falling incomes and inheritance tax reforms hit small farms, accelerating consolidation of the sector.  In the first half of the year the number of farms put up for sale rose to 177, the highest number in any six-month period since 2007 and 16 per cent higher than the five-year average, according to land agent Strutt & Parker. 

“It’s generally smaller farms coming to the market,” Sam Holt, head of estates at the firm told the Financial Times. “It’s been a really challenging few years for the farming industry.” Rising fuel, fertiliser and machinery costs, heavy rain and drought, and tapering subsidies for farmers had slashed income.  Downward pressure on farm incomes and rising input costs make you start to question how sustainable it is to run a [small] farm,” he added.

Arable farmers have been particularly hard hit by high fertiliser costs, as well as weak wheat prices. This was reflected in land values, with arable land priced 6 per cent lower in the first half of the year compared with last year. Pasture land values also fell, down 3 per cent. The average size of farms put up for sale so far this year was 330 acres.

Strutt & Parker categorises anything under 500 acres as a small farm. The number of farms in the UK has been falling steadily for decades, as large farms swallow smaller farms in financial difficulty. According to farm consultancy the Anderson Centre, the number of full-time farms has fallen from 66,510 in 2000 to 55,980 in 2010 and 51,350 in 2025.

The direct payments farmers received under the EU’s Common Agricultural Policy were replaced from 2021 by a new scheme that made farmers apply for funds in exchange for environmentally friendly practices, such as reducing pesticide use and planting diverse crops to improve soil health.

A government-commissioned review of the farming sector last year found that food production was no longer profitable for the average English farm, and that nearly a third of farms in Great Britain were lossmaking, in part due to the transition to the new subsidy scheme.

Changes to inheritance tax rules for farmers have also weighed on sentiment. The government announced in 2024 it was scrapping inheritance tax relief for farmers with assets of more than £1mn from April 2026. After intense lobbying by the industry, the government raised the threshold to £2.5mn. 

As a result, fewer non-farmers have been buying agricultural land. The proportion of farms bought by farmers rose to a seven-year high, or 59 per cent, in 2025, according to Strutt & Parker. The proportion of “lifestyle buyers” — people buying farms to live on, rather than farm — fell to 11 per cent last year, down from 20 per cent five years ago. “There’s obviously less tax advantages to owning land now,” Holt told the FT, adding that returns from farmland were “so poor” that buyers were better off leaving their money in the bank.