Purchasing your farm as a sitting tenant – particularly from an Agricultural Holdings Act (AHA) succession tenancy – can be a once-in-a lifetime opportunity.

Ownership unlocks your farm’s full potential. You gain immediate access to vacant possession value and the freedom to develop your business without tenancy constraints, while securing long-term control for future generations.

But be careful not to compromise your position through inadequate preparation or insufficient funding expertise – success depends on navigating the legal, financial, and practical considerations correctly.

Whether you’re responding to a landlord’s notice of sale or exploring the possibility proactively, taking time to understand your options and prepare thoroughly helps you make informed decisions that secure your farming future.

Advantages of buying as a sitting tenant

• Security and control: ownership provides long-term security and complete control over your land, allowing business development and investment without landlord restrictions.​
• Succession planning: for AHA tenancies in particular, ownership can secure the future for the next generation, ensuring continuity of your family farm business.​
• Freedom to develop: you can diversify, invest, and develop your business according to your vision rather than tenancy constraints.
• Potential discount: sitting tenants often secure a significant discount on the purchase price, making ownership more affordable than buying freehold on the open market.

Professional support you’ll need

Building the right team around you makes the process smoother and helps you avoid costly pitfalls. Engage with them early to help structure the purchase efficiently.

• Rural surveyor: provides valuation, condition surveys, and advice on any repair obligations or boundary matters. They help negotiate a fair purchase price, taking into account tenancy strength, land quality, and any improvements you’ve made.
• Agricultural solicitor: essential for reviewing contracts, checking legal title, verifying land boundaries, rights of way and easements, identifying any restrictive covenants, mineral rights, or sporting rights, and handling the legal transfer.
• Accountant:advises on tax implications, helps structure the purchase appropriately, and plans for ongoing financial commitments. Careful tax planning is crucial given the potential Stamp Duty Land Tax (SDLT), Capital Gains Tax (CGT), Inheritance Tax (IHT) and VAT liabilities.
• Mortgage specialist: it is best not to approach lenders on your own. Work with a specialist who understands farming finance. They prepare clear comparisons of lending options and highlight which terms, structure and rates suit your situation best.

Useful resources

• Tenant Farmers Association (TFA): advice, resources, and advocacy for tenant farmers. tfa.org.uk
• Central Association of Agricultural Valuers (CAAV): locate qualified agricultural valuers and rural surveyors. caav.org.uk
• Royal Institution of Chartered Surveyors (RICS): directory of chartered surveyors with rural expertise. rics.org
• Agricultural Law Association: find specialist solicitors experienced in farm tenancy purchases. ala.org.uk
• Department for Environment, Food & Rural Affairs (DEFRA): information on agricultural tenancies legislation and your legal rights. gov.uk/defra

There is no central source for finding local accountants who specialise in farming, but we have strong contacts and can make recommendations.  

Arranging finance

Most farm purchases require mortgage financing, and getting this right is crucial to long-term success. Agricultural lenders assess your farming track record, business viability, land value, productive capacity, accounts and cash flow projections, and your overall business plan.

Lenders can offer mortgages up to 70% of the freehold value. Importantly, lenders should use the full open market value for mortgage security purposes rather than just your discounted purchase price. Although it is important how the lending proposal is presented as the full open market value might not be used (due to lender policy) for all rural enterprises. This can be invaluable when you’re buying at a significant discount.

Most importantly, engage professional advice early stage to avoid costly mistakes and ensure your proposal is presented in the best way.​

Structuring considerations

• Loan terms: typically, 25 years as standard, potentially up to 40 years, with fixed, variable, or blended interest rates. Choose terms that fit your farm income patterns, not just projected best-case scenarios.
• Interest-only options: some lenders offer interest-only initial periods, reducing early cashflow pressure while your business adjusts to ownership.
• Flexibility features: look for lenders who allow periodic overpayments or lump sum repayments with reduced penalties. Farming income varies year to year, and this flexibility can be invaluable during good years.
• Security: loans are typically secured against the entirety of the farm, including the farmhouse, buildings, and the land – or that which is sufficient or suitable for the lender’s loan-to-value (LTV) purposes.
• Deposit requirements:  sitting tenant purchases typically require no deposit, as the difference between the discounted purchase price and the full vacant possession value provides the equity. However, this varies by lender and your specific circumstances.
• Short-term/bridging finance:  while bridging finance can help if speed is essential, it adds unnecessary cost and risk. A secure longer-term funding arrangement should always be in place before entering into any bridging facility.
  
  We strongly advise negotiating a realistic timeframe with the seller that allows you to arrange the right mortgage from the outset, avoiding the extra expense, risk and complexity of a two-step process.

Things to avoid

• Stretching yourself too thin: ensure repayments fit your actual farm income, not optimistic projections. Cashflow pressure from excessive debt can undermine your farming operation. Access the best possible lending terms from the outset and employ the right expertise to ensure that the funding application is robust to increase your chances of success.
• Ignoring the discounted price issue:  lenders should lend against the full vacant possession value, rather than your discounted purchase price but this can be sector dependent. How your lending proposal is presented matters significantly.
  
  If lenders only lend based on the purchase price and not the full open market value you may struggle to raise funds – particularly as few tenant farmers have substantial cash deposits available. Professional guidance ensures your case is positioned correctly from the start.
• Avoid short term bridging finance: bridging finance can prove to be costly and risky if a suitable exit strategy cannot be arranged. The safest approach is always to arrange your long-term mortgage from the outset, even if it means negotiating a longer completion period with the seller.
• Underestimating costs:establish all costsincluding arrangement fees, legal costs, valuation fees, and SDLT. These can add significantly to your upfront costs.

Purchase process

Each stage involves key actions to safeguard your interests and secure an affordable, risk-appropriate deal.​

1. Confirm your position and evaluate the opportunity: establish whether you have a right to buy or are negotiating directly. Obtain the farm’s market value both with and without a sitting tenancy to inform your pricing strategy.
2. Review your legal grounds and document improvements: check your tenancy agreement for restrictions and document all improvements you’ve made. Engage an agricultural solicitor to verify boundaries, rights, and any competing claims.
3. Obtain a professional valuation and negotiate:use a qualified valuation as your baseline, ensuring it accounts for your tenant enhancements. Avoid paying twice for your own improvements.
4. Identify the purchaser:take professional advice to investigate whether the property should be purchased in the name of an individual, limited company, or partnership. Choosing the correct structure can ease future succession plans and limit liability and tax exposure.
5. Build a detailed business plan: prepare robust cash flow projections considering debt repayments against realistic income forecasts. Lenders need to see a viable, well-managed enterprise.
6. Engage specialist mortgage support early: work with an experienced agricultural mortgage consultant to assess your financial position, identify suitable lenders, and help secure in-principle decisions on what you could borrow and on what terms. Don’t try to navigate alone—expert guidance can save time, money, and stress.
7. Prepare and submit your finance application: your consultant will help you compile accounts, proof of income, business plan, farm details, and the sale agreement and will present them to lenders in the strongest possible light.
8. Receive and review conditional offers: your consultant will guide you through the lender offers you receive, explain key terms, and help negotiate where possible.
9. Complete legal checks: your solicitor finalises checks on title, rights, easements, tax implications, and potential liabilities.
10. Complete the purchase: when all conditions are satisfied, funds are released and ownership transfers. You begin repaying your mortgage as agreed.
11. Post-purchase actions: register the land in your name, review your business and succession planning, and consider refinancing if interim finance was used.

Ready to buy as a sitting tenant?

Speak to us for strong, impartial advice at an early stage to get things moving on the right track from the outset.