Competing uses of farmland - what the new Land Use Framework means for your business

A new reality for farmland

The Government has published the Land Use Framework – which DEFRA says is “a plan for delivering new homes, nature restoration, clean energy and food security. It demonstrates clearly that there is enough land to deliver the government’s objectives provided we use land more efficiently and for multiple benefits.” 

It is clear, therefore, that farmland in England is no longer judged solely on its ability to produce food and that is already being felt on the ground. Whether you are approached for a solar option, considering a diversification scheme or reviewing succession plans, the legal and commercial position has shifted. The key issue is no longer whether land can be used for something else - but whether it should be, and on what terms.

Planning: Will your land still be “best used” for farming?

The new Land Use Framework is backed by mapping and data rather than traditional assumptions and appears to push a more strategic view of land use based on that data.

In practice, that means:

• agricultural use is no longer automatically the priority;
• planning decisions will increasingly weigh nature, energy, and housing alongside farming;
• the best and most versatile land should be protected, though we await updated land classification maps which will be crucial in considering the various potential land uses.

Environmental Schemes: Opportunity with strings attached

Biodiversity Net Gain (BNG) is now a routine feature of development, requiring at least a 10% uplift in biodiversity in many planning applications. But recent changes will fine-tune how it works (including small site exemptions and wider application to infrastructure).

For many farms, BNG and wider environmental markets areopening up new income streams. But there are risks, such as:

• BNG agreements can tie up land for decades, often via legal obligations that bind future owners.
• Entering a scheme without reviewing tenancies, lender consents or overage can create conflicts.
• Once land is committed to environmental use, reversing that decision is not straightforward.‍

‍Solar and Housing: Strong demand, long-term consequences

You are unlikely to go long these days without being approached about solar. Policy continues to support renewable energy, with increasing emphasis on using “land more efficiently and for multiple benefits” (e.g. grazing under panels).

Solar – What to weigh up:

• Typical agreements run for 40 - 60 years
• Land may be effectively unavailable for other uses during that period
• Care is needed to ensure continued access to tax reliefs and agricultural status

There is no simple “right answer”. For some holdings, solar will be the best use and the rent from solar agreements may support other on farm operations. For others, retaining flexibility for future development will be more valuable.

Tax and Succession: APR changes raise the stakes

From April 2026, Agricultural Property Relief (APR) and Business Property Relief (BPR) reliefs for inheritance tax have been capped. Previously, provided the criteria was met, there was 100% relief available on most agricultural land and assets. However, with the cap, the relief is now only available on the first £2.5m of land and assets and there is then a reduced rate of inheritance tax above that limit. This changes the succession conversation significantly.

Larger estates may now face inheritance tax where none previously arose. For all farmers, there may now be pressure to sell land, restructure ownership and review lifetime gifting and undertaking a detailed assessment of your farming business will be key. It is more important than ever to be reviewing your current assets – land, machinery, cash together with your current position such as tenancy agreements, partnership agreements and land ownership.

There is also a developing concern around diversified land uses and whether non-agricultural activities (solar, environmental schemes) will affect the eligibility of APR/BPR.

Put simply, tax planning should not sit in isolation. It must align with decisions about how the land is actually used and be based upon a thorough and detailed assessment, ideally supported by valuations.

Pulling it all together

The NFU president Tom Bradshaw has warned that “food production is still the poor relation”. Farmland is now being viewed as a multi-purpose asset, not just an agricultural one. One of the biggest risks will be committing land too quickly, without considering how today’s decision affects tomorrow’s options.

Landowners and their advisers will need to consider the holding as a whole to assess what is best for them. Those who have considered the new Framework and undertaken a thorough review of their current position are likely to be best placed to make the most of the opportunities. There are lots of opportunities for landowners – from solar income to environmental payments to development uplift. But these come with long-term consequences and often competing priorities and getting early advice will be key.

If you would like to discuss any of the topics in this article, the Leathes Prior Agriculture Team are here to support you. You can get in touch with the team via info@leathesprior.co.uk or by calling 01603 610911.