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What does the future hold for UK land? From shifting agricultural policies and food security to energy, housing, and environmental targets, Kelly Hewson-Fisher explores why rural land is in demand and what’s driving change.
From the ground up: It all begins with rural
The urban built environment in the UK would fit into an area not much bigger than the North West of England, covering 6% of the UK. Around three-quarters of the remainder is classed as utilised agricultural area (UAA). This highlights the significant role played by the rural sector and land management in providing three elements essential to life: environment, food and shelter.
However, the UK rural sector faces challenging and opportunistic times, and is paddling hard to keep up with the speed at which policies are published. The agricultural transition moves in earnest, away from the EU’s Common Agricultural Policy (CAP) system of direct payments to a post-Brexit system of public money for public goods. England is further along the road than other devolved nations, and the acceleration of cuts to delinked payments earlier this year, along with the abrupt closure of the Sustainable Farming Incentive in spring, left many businesses reviewing their future direction. In 2026, Wales’s Sustainable Farming Scheme is scheduled to start, and Scotland will phase in the implementation of its new framework.
The Autumn Budget announcements made short work of laying out a future where tax increases will apply to an increasing majority, though a pre-Christmas revision to scheduled changes to IHT Relief will have eased some of the pressure on family farms. The Finance Bill, expected in spring 2026, will confirm those announcements, and the devolved nations will publish their budgets early this year.
Land is in demand
There remains the question: why invest in farmland? Land, when compared to other asset classes, continues to perform well long-term and returns steady capital increases year-on-year. It’s seen as a stable haven for long-term portfolios and doesn’t experience the high and low fluctuations of other asset classes, and it provides diversification to investment portfolios. Land is a finite resource and is a tangible and versatile asset, capable of fulfilling a range of market demands.
The GB Farmland Market
This time last year, we forecasted that 150,000 acres would be publicly marketed — in fact, around 165,000 acres were publicly marketed during 2025. Supply levels varied across the regions, and this year volumes were higher in regions with a higher proportion of arable land. We believe this reflects current market dynamics, with high stock prices boosting the livestock sectors, whereas falling cereal prices and the sharp reduction in delinked payments in England are affecting confidence and cash flow in the arable sector. Figure 1 shows long-term value and supply levels in England.
On average, farmland values have fallen by 0.6%, but results vary widely by grade and region. For example, in the East of England, pasture values are unchanged, whilst arable values have fallen. Prime arable land has fallen the most, by 5.5%, and grade 3 arable land has fallen by 1.5%; overall average arable values have fallen by 2.7%. On the other hand, in the North of England, most land types have increased in value, except poorer pasture, which has fallen by 2.3%.
Trends and pressures affecting farming enterprises differ among regions. Growth observed in certain areas will offset declines in others
Kelly Hewson-Fisher, Head of Rural Research
Savills forecasts that farmland supply and values (Figure 2) will stabilise in 2026, before increasing from 2027. For supply, it is unlikely the IHT watered-down changes will trigger farm sales in the short term because selling land realises capital, which has a less favourable tax position than farmland. When the revised IHT reform is introduced in April 2026, land sales that may become necessary to fund the IHT would be delayed into 2027 due to the timeframes needed for probate and marketing preparation.
With respect to values, as previously noted, trends and pressures affecting farming enterprises differ among regions. Growth observed in certain areas will offset declines in others, resulting in an expected overall stabilisation of average year-end figures. It is anticipated that growth will resume from 2027, coinciding with increased policy clarity within the agricultural industry.
Land is the bedrock of existence – the foundation and catalyst for change
Challenge and opportunity are apparent in equal measures. The land use framework for England, the 25-year farming road map, and details of the national food strategy are expected this year. Scotland is working on its fourth iteration of the land use strategy, and the Land Reform Act could be impactful for land ownership in Scotland.
FOOD
The State of the World’s Land and Water Resources for Food and Agriculture report published by the FAO in 2025 states that by 2050, the global population will reach 9.7 billion, and agriculture will need to increase output by 50% to meet food, fuel and fibre demands (compared to 2012 levels).
Dame Angela Eagle, MP and Minister of Food Security and Rural Affairs, stated “food security is more important than ever” and feeding the UK is the key vision. Ms Eagle said the primary requirement of land is to produce food (95% of food is produced on land), and she added that a priority going forward would be to drive more exports, for the government to look to remove trade barriers and seek to protect farmers in future trade deals.
The supply chain is becoming more active in influencing how food is produced. Savills reviewed over 40 regenerative agriculture agreements from across the supply chain where processors/retailers are seeking to understand the additional benefits, which can be measured when production follows regenerative agriculture principles. 30:50:50 is a proposed UK agriculture strategy put forward by the All-Party Parliamentary Group on Science and Technology in Agriculture that aims to:
- Increase UK domestic food production by 30% by 2050.
- Reduce agriculture’s environmental footprint by 50% per unit of output by 2050.
DEVELOPMENT
In England, the government is behind on its 1.5 million new homes target. The National Housing Federation, the Home Builders Federation and Savills all warning this target is impossible to meet. Key challenges so far include planning delays, rising costs and shortages of materials and skilled labour. It is, however, forging ahead with the plan to build twelve new towns in England, which will count towards the overall housing target.
Data centre development across the UK is growing rapidly and projections are for growth of almost a fifth, with the majority set to be built in the next five years. The UK Government has designated them as critical national infrastructure. The Planning and Infrastructure Act1 aims to make provision for infrastructure and town and country planning through wider reforms.
ENVIRONMENT
The Environmental Improvement Plan (EIP) was published on 1 December 2025. The EIP is a statutory plan providing a strategic framework for improving England's natural environment up to 2043 and new interim targets have been set for the statutory Environment Act 2021 targets. The EIP contains ten goals covering restored nature, air, water, chemical and pesticides, waste, resources, climate change, environmental hazards, biosecurity and access to nature. There are a number of initiatives for delivery, including 48 Local Nature Recovery Strategies, which are expected to be published in the new year, and the National Estate for Nature group has been convened, which includes England's most significant public and private landowners.
For the devolved nations, there is a Northern Ireland EIP, Scotland Environment Strategy, and Wales has the Environment (Wales) Act 2016. For all, land management will be required to meet the targets set.
Forestry remains a focus. The statutory Environment Act target is to increase England’s tree canopy and woodland from 14.5% to at least 16.5% by 31 December 2050. Forestry, like many capital markets, was a mixed picture during 2025. While investors remain interested in the fundamentals of forest investing, uncertainty around the wider economic outlook meant caution remained throughout the year, with many continuing to hold cash. This meant the expected recovery in buyer interest didn’t materialise and overall demand remains subdued. That said, the weakening price trends seen in 2023 and 2024 appear to have stabilised. The outlook for 2026 will be linked to wider global economic trends, and there continue to be regional nuances.
ENERGY
A quarter of a century ago, fossil fuels provided 90% of all the energy consumed in the UK. In 2024, almost three-quarters of energy consumed still came from fossil fuels. While wind and solar projects have seen their combined capacity rise over 9,000% since the millennium, supporting infrastructure has not kept pace, meaning ever-increasing levels of curtailment. There is still a long way to go then, before the nation achieves clean power. The UK must do in five years what it has failed to do in 25.
Savills analysis of the Renewable Energy Planning Database, suggests the UK can at least hit its capacity targets in time (43–50 GW of offshore wind, 27–29 GW of onshore wind, and 45–47 GW of solar power by 2030) if it can only find a way to build out the project pipeline. However, that journey will not be without its obstacles. The greatest of these is the electricity grid, where a historic underinvestment in infrastructure means connection dates for energy-generating assets stretch well beyond the 2030 target date for clean power.
Action is being taken. UK grid connection reforms are shifting from a ‘first-come, first-served’ model to a ‘first ready, first connected’ approach to prioritise viable projects. Ofgem is reforming network charges to encourage generation and demand to locate where grid capacity is more likely to be available. The Clean Power 2030 Action Plan, as well as the upcoming Strategic Spatial Energy Plan, Regional Energy Strategy Plans and Local Area Energy Plans, all point to a shift towards spatial energy planning: the right asset in the right place. For investors and developers, this approach sets a clear target for each technology class and each region of the UK, making site-finding essential to success.
The right piece of land for solar — and renewable assets more broadly — is now the one that can be connected to the grid. Investors in this land can expect solar developers to offer rents in the region of £1,000 per acre per year. This will be inflation-linked to offer security over the term of the contract, often multiple decades.
The future of land
In the short to medium term, land can return an income from farming, although low at between 0.5% and 1.5%. And, while Baroness Minette Batters’ Farm Profitability Review (with 57 recommendations) recommends a revaluation of the sector, it is often the long-term strategic development potential of land that entices investment. Figure 3 shows the capital uplift which could be achieved from an agricultural base (grade 3 arable land) to solar photovoltaics and residential development opportunities.
Through collaboration, across private and public landscapes, opportunities are available for the sector from more sources than ever before. Whether this be food production, forestry, nature-based solutions, or alternative land uses such as energy and development, land is in demand.
1Majority of the Acts reforms apply to England and Wales but some provisions have been extended to Scotland.