This is a hot topic given the country's need for a step change in housing and infrastructure development. We discuss the impact of this in our new Farmland Market Spotlight report, which also reviews the market in 2024 and our expectations for the years ahead.

The Spotlight also investigates the impact of the government’s inheritance tax reforms, which were prominent in the news last week as the UK’s major supermarkets called for the government to pause and consult on its plans.

FOOD & FARMING

Farmland Market: Insights and forecasts
In 2024, the farmland market in Great Britain was very active, marking the busiest year since 2018. Over 187,500 acres were put on the market, a 19% increase from 2023. We attribute this rise to the national agricultural transition and tough economic conditions.

Looking ahead, the inheritance tax reforms coming in April 2026 will have a big impact on farmers and their family businesses. Farms over 124 acres will face inheritance tax liabilities, so detailed tax planning will be necessary. Our modelling presented in the Spotlight report shows that on a 400-acre arable farm in single ownership, 50% of the profit for 25 years would be needed to pay inheritance tax, whilst on upland livestock farms, the average return on capital employed is negative, so there isn’t profit available to fund the tax bill. 

Farmland supply is expected to drop by 20% in 2025 as farmers and landowners take stock but will increase again from 2027 onwards as some sales will be required to fund inheritance tax liabilities. Farmland values are predicted to stay stable until 2027, with gradual growth expected after that due to increased competition among different types of buyers. To find out more, read our Spotlight on the Farmland Market.

Review calls for overhaul of farm assurance schemes
A comprehensive review of the UK farm assurance schemes has been published. It highlights a critical need for a “fundamental reset” of the system, particularly focusing on the Red Tractor assurance scheme. Farmers are dissatisfied with the complex and costly assurance audits, feeling these schemes are imposed rather than owned by them.

Among nine strategic recommendations, the review calls for reducing and simplifying on-farm audits, a transformational step forward in embracing technology and resetting the governance structures to ensure farmers have a stronger voice. The review also stresses the need for greater collaboration between farm assurance schemes across the UK and better positioning of the UK farming industry in global food markets. The aborted launch of the Red Tractor scheme’s Greener Farms Commitment was a major factor that led to the review. It is recommended that future environmental ambitions for farm assurance should be set out by an industry-led initiative to establish it as an area of competitive advantage for UK farming.

The review marks a pivotal moment for UK farm assurance, aiming to rebuild lost trust and ensure the schemes are fit for a modern farming environment. Agricultural organisations have broadly welcomed the recommendations and view them as an opportunity for farm assurance schemes to start delivering for the entire UK food supply chain.

UK bans the import of livestock from Germany
The UK has banned the import of cattle, pigs, and sheep from Germany to prevent the spread of foot-and-mouth disease. This decision follows the first confirmed case of the disease in Germany in 36 years, found in a water buffalo herd near Berlin. The ban also includes products from these animals, such as fresh meat and milk. Dr Christine Middlemiss, the UK's Chief Veterinary Officer, emphasised the importance of limiting the risk and spread of the disease. While the viral disease poses no risk to human or food safety, it is highly contagious among cloven-hoofed animals such as cows, sheep, and pigs. Livestock keepers are urged to remain vigilant and report any signs of the disease immediately.

POLICY

Progress on the Renters' Rights Bill
The Renters' Rights Bill has advanced to the House of Lords and is now awaiting its second reading. Recent amendments to the Bill include capping advance rent payments at one month's rent. Currently, there is no limit on how much rent a landlord in England can request upfront, which the government argues makes it harder for those on lower incomes to secure housing. Under the new rules, landlords will be allowed to request up to one month's rent in advance, along with a security deposit of five to six weeks' rent.

Additional amendments to the Bill include:

• Protection for guarantors from paying rent after a tenant's death.
• A new rule preventing student landlords from creating tenancy agreements with students more than six months before the move-in date.
• Changes to rent repayment orders to ensure landlords remain liable for such orders, even if the tenant’s rent was paid through an agent or intermediate landlord.
• Stipulations that landlord fees will now fund the creation of a private rented sector ombudsman.

UK facing food security challenges
The government has released its annual report on the UK’s food security. It is structured around five key themes: global food availability, UK food supply sources, food supply chain resilience, household food security and consumer confidence and food safety.

The report indicates moderate increases in global food production per capita for most food groups between 2019 and 2022 but highlights an increase in the number of undernourished people worldwide, from 541 million in 2017 to 733 million in 2023. Factors such as climate change, nature loss and water insecurity threaten the ability of global food production to meet demand.

Domestically, the UK remains highly dependent on imports for fruit, vegetables and seafood. While the overall balance of trade and production is “broadly stable,” the report raises concerns about the long-term decline of natural capital posing a significant risk to UK food security. Additionally, the conflict in Ukraine has pressured agri-supply chains, exposing “single points of failure” that threaten supply chain resilience in Great Britain.

ENVIRONMENT & NATURAL CAPITAL

Urgent refresh needed for environmental targets
The government is “largely off track” in meeting the targets set by the Environmental Improvement Plan 2023 (EIP23), which implements the 25-Year Environment Plan. The progress report by the Office for Environmental Protection (OEP) reveals that only nine out of 43 targets, covering areas such as nature, freshwater, marine environments, and waste, are on track.

The report calls for a rapid refresh of EIP23, as announced by Defra in 2024, and recommends stronger benchmarking and delivery plans. It criticises the current EIP23 mechanisms for lacking sufficient information and evidence to demonstrate how actions will be implemented, making it difficult for public scrutiny and government accountability. Dame Glenys Stacey, chair of the OEP, described the report as “a worrying read” but acknowledged that the progress report reflects the previous government's actions. She emphasised that the advice is still relevant for the current administration, which must address the mounting environmental challenges.

Hidden threats to soil revealed
According to research by the James Hutton Institute, spreading sewage sludge on farmland twice is enough to cause acute impacts on soil health. This practice is also a significant route for microplastics and 'forever chemicals' to enter the environment.

Currently, water companies are required to test their sewage sludge for only a limited number of contaminants, such as heavy metals. However, these tests do not include microplastics, pesticides, and per- and polyfluoroalkyl substances (PFAS, also known as forever chemicals). The latest assessment reveals that after just one application, 41% of the pharmaceutical and personal care products found in sludge pose a risk to soil health.

PROPERTY & DEVELOPMENT

Planning reforms balances infrastructure and nature recovery
The government has proposed new planning reforms to balance infrastructure development with nature recovery in England. A key element is the creation of a Nature Restoration Fund, which will pool contributions from developers to finance larger, strategic environmental interventions. This approach aims to reduce the need for individual site-level assessments and expedite project approvals. Currently, developers must secure mitigation or compensation for environmental harm before receiving planning permission. The new approach allows developers to make a single payment to the Nature Restoration Fund, enabling projects to proceed while still funding positive environmental outcomes.

The reforms aim to help the government make 150 major infrastructure project decisions by the end of this Parliament, including new roads, gigafactories and data centres. The government believes these changes will create a “win-win” for both nature and the economy. However, some environmental groups say the new system will prioritise development over environmental protection. They argue that the streamlined process could lead to insufficient scrutiny of individual projects' environmental impacts.

The government’s working paper is clear that these changes are not expected to have any substantive impact on mandatory Biodiversity Net Gain. It is keen to incentivise nature positive choices on development sites and fully supports the developing private marketplace for off-site biodiversity units. For other types of offsetting and mitigation affected by the reforms, the public sector will become a more important customer for landowners’ projects. If you would like to discuss nature recovery projects and markets, please contact Julia Pound.

Red tape cut for renewables
The National Energy System Operator (NESO) has announced plans to ease regulatory burdens on solar energy projects. The proposed changes will raise the threshold for transmission impact assessments (TIAs) from 1MW to 5MW, reducing delays and costs for larger-scale rooftop and small-scale ground-mounted solar projects. TIAs are needed to determine the effects of new energy projects on the existing transmission network to ensure the grid can handle additional power.

This shift is expected to accelerate the deployment of solar photovoltaics, particularly on warehouses and other large buildings. The changes will primarily benefit projects in England and Wales, with similar but less extensive reforms already implemented in Scotland. These reforms are part of NESO's broader efforts to streamline grid connections and have been broadly welcomed by the energy sector.

Will the ‘Grey Belt’ threaten food production?
According to the Campaign to Protect Rural England, farms near urban areas could be at risk due to the government’s plans to build more homes on grey belt land. The charity’s analysis covered all 14 of England’s green belts and land within 5km of urban areas with populations over 100,000 that are not designated as green belt. Farms in these areas produce a significant portion of the country’s food, including 20% of wheat, oats, and barley, 15% of sugar beet, 14% of potatoes and 13% of milk. The National Planning Policy Framework recently created the concept of the grey belt. It is broadly previously developed land or land that does not strongly support some of the key purposes of the green belt; a full explanation is available here, and for more details on the NPPF reforms, see our briefing note.

BUSINESS & economy

Inheritance tax campaign intensifies
The campaign against the government’s planned inheritance tax reforms intensified last week as all the UK’s major supermarkets publicly stated their shared concerns and called for the government to pause and consult on its plans. The TaxPayers’ Alliance also launched a campaign calling for inheritance tax to be abolished. Its survey found that 55% of the public wants to abolish it or cut the rates. When asked to pick the most unfair tax from a list of nine, 46% selected inheritance tax. In relation to inheritance tax affecting family farms and businesses, 59% supported abolishing the tax for businesses and 63% for farms, where there was a majority across all demographic groups.

The Office for Budget Responsibility (OBR) has released more information about its assessment of the likely impact and tax income raised by the changes to agricultural property relief (APR) and business property relief (BPR). The Treasury projects the changes will raise £500 million by the 2029-30 financial year. However, the OBR’s assessment assigned a “high uncertainty rating” to this forecast because the various tax planning options available to farmers could significantly impact the expected revenue. It also acknowledged that it is likely to be difficult for some older individuals to quickly restructure their affairs in response to the measure. The NFU and the CLA have used these revelations in their campaigns, and the NFU also delivered a petition signed by 270,000 members of the public to 10 Downing Street on 24 January.

Until now, the prospect of the government revising its plans has appeared remote. It held firm against backlash when it cut winter fuel payments, but it has just softened the phase-out of the non-dom regime. Whether or not it changes its approach to APR and BPR reform remains to be seen. The chair of Parliament’s Environment, Food and Rural Affairs Committee has just written to the Prime Minister seeking answers to questions about the objectives of the reform, its impact assessment and asking for the scope of the “technical consultation about trusts” to be broadened to assess the impact of the reforms a whole. The Prime Minister’s response will be closely watched.

OTHER RURAL NEWS

And finally… Christmas continues
Noah's Ark Zoo Farm in north Somerset has accepted about 15,000 old Christmas trees over the past five years. Why? Well, it depends on the animal. African bull elephants will eat the branches and forage through the trees. The spectacled bears enjoy the scent of pine tree chippings, while rhinos prefer to forage through them. The zoo’s meerkats wasted no time exploring the new additions to their territory either. Elsewhere, Willowbank Farm near Dorchester is taking donated Christmas trees and feeding them to its alpacas and goats. While the animals seem to like the new taste, they’ve been playing with the trees and using them as back scratchers. Recycling trees like this can have a great environmental impact; the Carbon Trust says that if real trees are turned into wood chippings rather than ending up in landfill, it will reduce the carbon footprint by 80%.

If you have queries about any of the articles, please contact us.