There’s a good chance you’ve got one. An old dairy parlour that has sat empty since the herd was sold. A grain store that is only ever half full these days. A machinery shed at the far end of the yard that hasn’t seen a tractor in years, but is still structurally sound and locked up for no particular reason.
Most farmers walk past these buildings without a second thought. But a growing number of local businesses would look at that same space and see exactly what they need.
We speak to farmers regularly who are surprised to learn just how popular this has become. Renting out sheds, barns, stables and yard space to tradespeople, small manufacturers, storage operators and start-ups isn’t a fringe idea any more – it’s now the single most common form of farm diversification in England, and, on average, the most profitable.
Our team has looked at the numbers behind this, what you can realistically rent your buildings for, how to do it without landing yourself in a legal mess, and what your options are if you need funding to convert a building or put up a new one.
The Numbers Look Very Promising
According to DEFRA’s Farm Business Survey, this isn’t a fringe strategy; it’s close to the norm:
- 72% of farm businesses in England had some form of diversified activity in 2024/25, up 10 percentage points since 2015/16.
- Letting out buildings is the most popular diversification activity. Half of all farm businesses do it – well ahead of solar (27%) and everything else on the list.
- It’s also the most profitable, bringing in an average of £27,900 a year for the farms that do it. That’s almost the same as the combined total for tourist accommodation and catering (£8,700) or other renewable energy (£19,800).
- For 16% of farms, letting buildings was their only diversified activity. You don’t need a whole strategy here; spare space is often enough on its own.
For more than a quarter of diversified farms, income from diversification made up at least half of their total Farm Business Income. This isn’t pocket money for some businesses; it’s a genuine part of how they stay afloat.
Why This Makes Sense for So Many Farms
You’re not buying anything new here. You’re putting a building you already own, one that’s currently earning nothing, to work.
Demand is real too.
Rural and semi-rural businesses are increasingly priced out of industrial estates and town-centre units, so tradespeople, online retailers, remote workers and small manufacturers are actively looking for affordable space with decent access. Farms tend to be well placed to offer exactly that.
It’s flexible, as well.
Some farmers let a single shed on a short lease just to see how it goes; others end up converting a whole range of buildings into something closer to a small business park after they’ve seen it work. And unlike livestock or arable diversification, it generally doesn’t compete for your time or labour – it sits alongside what you are already doing rather than pulling you away from it.
Perhaps the most underrated benefit, though, is that it’s a fixed income. Farm input costs, weather and commodity prices are all outside your control. A rent cheque that lands on the same date every month, regardless of how the harvest went, is a different kind of financial buffer to have.
What Can You Actually Rent Your Farm Buildings For?
This is usually where farmers get stuck, not because the idea doesn’t appeal, but because it’s hard to picture who’d actually want the space. In practice, demand tends to come from a fairly predictable set of local businesses:
- Storage and self-storage – indoor container storage, drive-up shipping containers, or just hardstanding yard space for vehicles and trailers. This is about as low-effort as it gets, and it works particularly well near towns and commuter routes.
- Light industrial workshops – Larger machinery sheds can often be split into smaller units for mechanics, carpenters and other tradespeople.
- Rural offices and co-working space – Old stone barns or milking parlours, converted into quiet, broadband fibre-enabled offices. Demand from remote and hybrid workers looking for an alternative to a city-centre lease has grown considerably.
- Food processing and commercial kitchens – Hygienic units turned into shared kitchens for local bakers, caterers or small food producers, and a natural fit if you’re already producing anything that could be turned into a finished product.
- E-commerce fulfilment – Small online retailers and courier services need dry, secure, local warehousing more than ever.
- Vehicle and equestrian use – Classic car storage, restoration work, and equestrian liveries remain a steady, unglamorous source of demand.
You don’t need to chase all of these. Most farms simply let to whatever use fits the buildings they already have, then think about expanding once they’ve seen it work.
Worth A Mention
Co-working and serviced office space is a step up from a standard let. Instead of one tenant on a long lease, you are offering flexible desks and shared facilities to several people at once.
Pricing in this space runs from around £10–£20 a day for hot-desking up to £150–£500 a month for a dedicated desk, depending on location. It’s more hands-on to run and market than a simple let, and comes with its own insurance considerations (more on that below), but the returns per square foot can be considerably stronger.
How Easy Is It, Really?
Easier than most farmers expect, but there are a few things worth getting right from day one, and one in particular that catches people out.
Start by identifying the space – Old livestock buildings, redundant grain stores, machinery sheds, even yard space – anything genuinely underused. Buildings with their own access, ideally separate from the main farmyard, tend to let fastest.
Then check the basics – Planning permission is the obvious one. Many buildings can be let for storage or light business use under existing rules or permitted development rights, though a change of use to something like offices or food production may need proper consent.
A call to your local planning department or a rural surveyor sorts this out quickly. You will also need to tell your insurer and add commercial letting cover. If you are offering shared space, you may need public liability, employer’s liability, business contents, and business interruption cover on top. Basic safety compliance, electrics, fire safety, and access rounds out the list.
Now, the part people skip – If a tenant has exclusive use of a building in exchange for rent, they can pick up statutory protected rights under the Landlord and Tenant Act 1954 – regardless of what you called the arrangement on paper.
Calling it a “licence” instead of a lease doesn’t change anything if, in practice, it functions like a tenancy. Get this wrong, and you can end up tied to a tenant indefinitely, or owing them compensation just to get your own building back.
We have heard from more than one farmer who assumed a friendly handshake deal with a “temporary” occupier was low-risk, only to find out later it wasn’t nearly as temporary as they thought.
The fix is simple, but it has to happen before anyone moves in: get a proper written agreement, make sure it reflects what is actually happening rather than a convenient label, take advice on excluding those statutory protections if that is your intention, and don’t hand over a key until it’s all signed. A rural solicitor can usually turn this around in a few days, and it’s a small cost against the risk of getting it wrong.
Then it’s just a matter of finding a tenant – word of mouth, local Facebook groups, Rightmove Commercial and specialist rural listings all work well, and decent buildings with good access tend not to sit empty for long.
And collecting the rent – Once the paperwork’s right and a tenant’s in, a single unit can bring in anywhere from a few hundred to several thousand pounds a month, for very little ongoing effort.
When You Need To Build Or Convert
The buildings you already have are usually only the starting point. Once farmers see the income potential, the next question is often, “Could I do more with this?”
That might mean converting an old cattle shed into several smaller, more lettable units. It might mean putting up a purpose-built steel-frame unit, which tends to attract stronger rents and more reliable tenants than a converted agricultural building.
A few farms go further still and effectively build a small rural business park, spreading their risk across several tenants rather than relying on one.
The sticking point is almost always the same: funding.
Conversion and construction costs can run into tens or hundreds of thousands of pounds, and understandably, most farmers don’t want to drain cash reserves or disturb existing borrowing to cover it.
That’s the point at which a specialist agri finance broker such as Evangate FS becomes genuinely useful.
Why Farmers Use A Broker To Fund These Projects
Diversification projects sit in an odd space – part agricultural, part commercial property, part small business and high-street banks don’t always know what to make of that.
Approach your usual bank on its own, and you can end up with the wrong product, a slow decision, or a flat “no,” simply because that lender’s appetite doesn’t stretch to this kind of thing.
N.B., we have covered this in previous posts, including bank loan alternatives.
A broker who works specifically in agricultural and rural finance tends to add value in a few concrete ways:
- Matching the project to the right lender – agricultural mortgage providers, specialist property lenders, development finance and asset finance all suit different stages of a project, and rarely the same lender twice.
- Structuring the funding properly – a development loan to build, a bridging facility to convert and re-let quickly, or a longer-term commercial mortgage once units are tenanted and earning.
- Speeding things up – brokers know exactly what a lender needs to see (planning status, projected rents, tenant demand) and can help put together an application that gets a faster, more informed answer.
- Keeping your existing finances untouched – good structuring often means funding the project without disturbing your existing agricultural borrowing or working capital.
- Giving you real options – rather than a single yes or no from one bank, you typically end up choosing between a shortlist of realistic offers.
The Bottom Line
Letting out farm buildings isn’t a niche idea any more – it’s the diversification route most farms are already taking, and the one delivering the best average returns.
For most, it comes down to getting the fundamentals right: planning, insurance, and an agreement that actually protects you, then finding the right tenant.
For farms ready to go further, converting old buildings or putting up new commercial units can unlock considerably stronger returns – and the right funding, arranged through a broker who understands agricultural and rural property finance, is usually what makes that step possible.
If you are considering renting out farm buildings, or need funding to convert or build units for commercial letting, speak to our team. We work with farmers across the country to secure the right finance for exactly this kind of diversification project.
