Edinburgh · UK-wide · farms, estates & rural business
Agricultural lending runs on a different clock from the rest of the mortgage market. AMC will fix a rate for up to 30 years; Barclays will take payments annually rather than monthly, which is what an arable business with one income event a year actually needs. And since 6 April 2026 the single biggest driver of borrowing on farms has been inheritance tax — 100% Agricultural and Business Property Relief is now capped at a combined £2.5 million per person, and the bill lands on an asset nobody wants to sell. Prime Mortgages arranges farm and rural finance across the whole of the UK, from our Edinburgh office.
There is no single agricultural market. There is a long-term land lender, a handful of clearing banks with real agricultural teams, one bank that does nothing else, and a set of specialists for the cases the others will not touch. Which one you go to changes the term, the repayment profile and often whether the deal happens at all.
| Lender | Loan to value | Term | Known for |
|---|---|---|---|
| AMC (Agricultural Mortgage Corporation) | Up to 60% of land or property value | 5–30 years | The benchmark long-term farm lender. Fixed rates for up to 30 years — nothing else in UK lending does this. Minimum £25,001. Interest only and capital repayment holidays available. Loans transferable to the next generation. |
| Oxbury Bank | Case by case | 6 months–25 years | The only UK bank serving agriculture exclusively. Seasonal repayment structures aligned to farm income, input finance for seed, feed, fertiliser and fuel, and a new-entrant product. |
| Barclays Agriculture | Case by case | 1–25 years | Minimum over £25,000. Fixed rates 1 to 10 years, switchable mid-term. Monthly, quarterly or annual payments — the annual option matters enormously for arable. |
| Bank of Scotland, RBS, Virgin Money | Case by case | Case by case | The three with the deepest branch-level agricultural relationships in Scotland. RBS funds diversification, renewables and landed estates on alternative metrics; Virgin Money inherited Clydesdale's agricultural book and supports agri-tourism. |
| Together | Up to 50% | Case by case | £50,000 to £5m, from 8.94%. Lends on land with or without planning. Useful where speed or an unusual title defeats AMC. |
| UK Agricultural Finance, Folk2Folk | Case by case | Short term | Bridging and rescue lending on farmland, including probate, succession disputes and planning-dependent purchases. |
Rates and arrangement fees in this market are almost never published, and any broker quoting you a market-wide figure is guessing. We quote from the lender, on your case.
This is the dominant issue in farm finance and it is worth being precise about, because a great deal of what is written online is out of date.
From 6 April 2026, 100% Agricultural Property Relief and Business Property Relief is capped at a combined £2.5 million allowance per person. Above that, relief drops to 50%, giving an effective inheritance tax rate of 20% on the excess. The allowance is transferable between spouses and civil partners — so a couple can shelter £5 million — and the transfer works even where the first spouse died before April 2026. It refreshes every seven years and will be CPI-indexed from April 2031.
The figure most often quoted is wrong. The October 2024 Budget proposed a £1 million cap; that was raised to £2.5 million on 23 December 2025 and enacted in Finance Act 2026. Some government guidance pages still say £1 million and non-transferable. Both are superseded.
A sole owner dies with £4 million of qualifying agricultural property and an unused £325,000 nil-rate band. The first £2.5 million attracts 100% relief. The remaining £1.5 million attracts 50%, leaving £750,000 chargeable. Less the nil-rate band, £425,000 is taxable. At 40% that is £170,000 — payable over ten interest-free annual instalments, so £17,000 a year. The same £4 million held jointly by a married couple, with the allowance transferred on first death, sits entirely within the £5 million combined allowance and pays nothing.
This is tax-sensitive territory. You need a land agent, an accountant and a solicitor. We arrange the finance; we do not advise on the tax.
Lenders will not take security over a croft tenancy, and owner-occupied croft land remains subject to crofting tenure and the Crofting Commission's regulation. The route to a mortgage is decrofting the house site, confirmed by a Decrofting Direction from the Commission. Where a croft tenant obtains a direction, they must buy the land from the landlord within five years — a deadline that cannot be extended. Any crofter must also be resident on or within 32 kilometres of the croft. Grant funding is often the better route than debt: the Croft House Grant pays up to £38,000 in high-priority areas, £28,000 standard, for a new house.
Land attracts 100% Agricultural Property Relief where you farm it yourself, use short-term grazing licences, or let it on a tenancy beginning after 1 September 1995. Everything else attracts 50%. A Scottish 1991 Act secure tenancy granted before 1 September 1995 — a large share of Scotland's let sector — therefore gives the landlord only 50% relief, which is a materially worse position than an owner-occupier and is now compounded by the £2.5 million cap.
Scotland has not phased out direct payments. The Basic Payment Scheme continues in 2026 with greening still worth roughly 30% of the payment, and it remains a real input to farm cash flow. In England, delinked payments in 2026 are cut by 98% on the first £30,000 and 100% above it — capping any payment at £600 — with 2027 the final year. For lending purposes, English direct support is gone. That is the sharpest cross-border difference in farm finance right now.
A note on the pre-emptive right to buy: only secure 1991 Act tenants have it, it must be registered with Registers of Scotland, and registration lasts five years and must be renewed. If you hold one, arrange finance in principle before the notice arrives — the timetable is not negotiable. AMC explicitly funds sitting-tenant acquisitions.
A farm comprising a farmhouse and land is a mixed-use purchase, taxed at non-residential rates rather than residential ones. The difference is not marginal.
| £600,000 farm purchase | Tax |
|---|---|
| Scotland, mixed-use LBTT | £18,500 |
| England, mixed-use SDLT | £19,500 |
| Scotland, if charged at residential rates | £33,350 |
| Scotland, residential plus 8% Additional Dwelling Supplement | £81,350 |
On that purchase, correct mixed-use treatment saves roughly £14,850 against residential rates — and about £62,850 where ADS would otherwise have applied. The non-residential element has to be genuine and substantive, not a token paddock; Revenue Scotland and HMRC both scrutinise it. Get it confirmed by your solicitor before missives, not after.
Two things, and the second is nearly always the constraint.
Security. The valuation of the holding and the resulting loan to value. Whether it is valued as a whole — "lock up and key" — or dwelling-only, which materially changes the loan available. Security free of existing charges is preferred, though second charges are possible.
Serviceability. Three years of accounts analysed for surplus cash available to service debt; budgets and cash flows with gross margins for anything new; and stress testing typically at 5% to 7% rather than the actual pay rate. Farm accounts routinely show low or negative profit after depreciation and drawings while generating strong cash. Agricultural lenders normalise for that. Generalist lenders often do not — which is the core reason a farm case belongs with a specialist.
Four inputs are specific to farming: the accounts and how they are read; support payments, which now differ sharply by nation; diversification income, and whether it is contracted like a 25-year solar lease or trading like a farm shop; and tenancy type, which determines whether there is lendable security at all.
No fee for the initial conversation, and no obligation. We usually reply the same working day.
AMC, the UK's main agricultural lender, lends up to 60% of land or property value, and in practice prefers loans below 50% loan to value. Across the wider market 50% to 70% is typical for bare agricultural land. Together lends on land up to 50%. Higher loan to values are generally only available where there is a substantial residential element or additional security.
AMC offers terms of 5 to 30 years and — unusually for UK lending — will fix the rate for up to 30 years. Barclays offers 1 to 25 years with fixes of 1 to 10 years. Oxbury offers 6 months to 25 years. No residential or standard commercial lender fixes for 30 years, which makes it a genuine structural advantage where you are planning around a succession horizon.
AMC's minimum is £25,001. Barclays' agricultural mortgage starts at over £25,000. Together's minimum on land is £50,000. Farm finance is not generally available in small amounts — below roughly £25,000 you are looking at unsecured business lending or asset finance instead.
Yes. AMC offers interest only, initial capital repayment holidays and repayment loans. Oxbury offers interest-only options and seasonal repayment structures aligned to farm income cycles. Barclays provides interest-only periods through capital repayment holidays, and also allows annual rather than monthly payments — which suits an arable business with one income event a year.
From 6 April 2026, 100% Agricultural Property Relief and Business Property Relief is capped at a combined £2.5 million allowance per person. Above that, relief drops to 50%, giving an effective inheritance tax rate of 20% on the excess. The allowance is transferable between spouses and civil partners, so a couple can pass on £5 million, and the transfer works even where the first spouse died before 6 April 2026. The allowance refreshes every seven years. The original October 2024 Budget proposed a £1 million cap; this was raised to £2.5 million on 23 December 2025 and enacted in Finance Act 2026.
Not necessarily. Inheritance tax on qualifying agricultural and business property can be paid in ten equal annual instalments, interest free, and Finance Act 2026 extended interest-free instalments to a wider range of qualifying assets. On a £4 million holding with a £2.5 million allowance and an unused nil-rate band, the bill works out at roughly £170,000, or £17,000 a year over ten years. Many farms borrow against retained land to fund the instalments rather than sell productive acres.
Yes, and this matters particularly in Scotland. Land attracts 100% Agricultural Property Relief where you farm it yourself, use short-term grazing licences, or let it on a tenancy beginning after 1 September 1995. In all other cases it attracts only 50%. A Scottish 1991 Act secure tenancy granted before 1 September 1995 therefore gives the landlord only 50% relief — a materially worse position than an owner-occupier, now compounded by the £2.5 million cap.
Generally, no. Croft land is not mortgageable in the ordinary sense — lenders will not take security over a croft tenancy, and owner-occupied croft land remains subject to crofting tenure and the Crofting Commission's regulation. The standard route to a mortgage is to decroft the house site, which requires a Decrofting Direction from the Crofting Commission. Where a croft tenant obtains a direction they must buy the land from the landlord within five years, a deadline that cannot be extended. Any crofter must also be resident on or within 32 kilometres of the croft.
It depends where you farm. In Scotland, yes — the Basic Payment Scheme continues in 2026, with greening still worth around 30% of the payment, and it remains a real input to farm cash flow. In England, no: delinked payments in 2026 are subject to a 98% reduction on the first £30,000 and 100% above it, capping any payment at £600, and 2027 is the final year. English farms now rely on trading income, diversification and the Sustainable Farming Incentive, which pays quarterly under three-year agreements capped at £100,000 per agreement year.
No, and the difference is large. A farm comprising a farmhouse and land is a mixed-use purchase, charged at non-residential rates. In Scotland, LBTT non-residential is 0% to £150,000, 1% to £250,000 and 5% above. In England, SDLT non-residential is 0% to £150,000, 2% to £250,000 and 5% above. On a £600,000 purchase that is £18,500 in Scotland or £19,500 in England — against £33,350 at Scottish residential rates, or £81,350 if the 8% Additional Dwelling Supplement applied. The mixed-use element must be genuine, so have your solicitor confirm the treatment before missives.
Two things: security and serviceability. On security, the valuation and resulting loan to value, and whether the holding is valued as a whole or dwelling-only. On serviceability — usually the binding constraint — three years of accounts, budgets and cash flows with gross margins for anything new, your track record, and stress testing typically at 5% to 7% rather than the pay rate. Farm accounts routinely show low profit after depreciation and drawings while generating strong cash; agricultural lenders normalise for that, and generalist lenders often do not.
A twenty-minute conversation will tell you what you can realistically borrow, what it will cost and whether it is worth doing. It is free, and we will tell you honestly if the answer is no.
About these figures. Loan to values, terms and cover ratios on this page describe what lenders in this sector were offering as at August 2026. They are market ranges, not an offer or a quotation, and they are not based on cases we have placed. What any individual lender will do depends on the business, the property, the covenant and your circumstances. Criteria change frequently — ask us for the current position before you rely on any figure here.