Real Estate
Contents
- Legislation
- Terrorism (Protection of Premises) Act 2025
- England Devolution and Community Empowerment Bill
- Ban on Upwards-only Rent Reviews
- Renters’ Rights Act 2025
- Landlord and Tenant Act 1954
- The Planning & Infrastructure Act 2025
- Introduction of The Building Safety Levy
- Future Homes Standard
- Changes to Leasehold/Commonhold
- News
- Case law
- Building Safety Act 2022
- Triathlon Homes LLP v Stratford Village Development Partnership, Get Living PLC and East Village Management Ltd [2025] EWCA Civ 846
- Adriatic Land 5 Ltd v Long leaseholders at Hippersley Point [2025] EWCA Civ 856
- Almacantar Centre Point Nominee No.1 Ltd v De Valk [2025] UKUT 298 (LC)
- The Health & Safety Executive v Integritas Property Group (IPG) Ltd [2025] EWHC 2613 (TCC)
Key contact
Darren Williamson
Partner & National Head of Real Estate
Key anticipated events
Upcoming
- Early 2026: Government response due on Future Homes Standard consultation
- Functions of the Building Safety Regulator transfer from the Health & Safety Executive to a new independent regulatory body
- National Housing Bank expected to become operational
- Certain aspects of the Renters’ Rights Act 2025 come into force
- 1 October 2026: Building Safety Levy becomes payable in respect of new building control applications for chargeable dwellings
- 1 January 2027: Implementation of Future Homes Standard regulations
Upcoming
January
2026
April
2026
May
2026
October
2026
2027
Legislation
Terrorism (Protection of Premises) Act 2025
The Terrorism (Protection of Premises) Act 2025 received Royal Assent on 3 April 2025. Forming part of the Government’s wider counter-terrorism strategy, it introduces significant obligations for certain premises and event organisers in the UK. Commonly known as ‘Martyn’s Law’, this legislation aims to enhance public safety by requiring venues to assess and mitigate the risk of terrorist attacks. Understanding the scope, compliance requirements, and enforcement provisions is essential to ensure readiness and avoid penalties once the Act comes into force.
Scope of the Act
The Act applies to qualifying public premises and events. It introduces two tiers of duty:
-
Standard Duty for premises with a capacity of 200–799 people
-
Enhanced Duty for premises and events with a capacity of 800 or more
Compliance requirements
Under the Standard Duty, the person with responsibility for the premises or event must implement basic security measures and staff training. For Enhanced Duty premises, you are required to develop and maintain a detailed security plan, conduct risk assessments, and appoint a senior individual responsible for compliance.
Enforcement and penalties
The Security Industry Authority (SIA) will carry out the regulatory functions in the Act. The Act empowers inspectors to monitor compliance and take enforcement action. Failure to comply can result in civil penalties, including fines up to £18 million or 5% of worldwide turnover, or restrictions on premises and events, for serious or persistent breaches. Some breaches of the Act are criminal offences.
Implications for businesses
- Increased compliance costs for venues and event organisers, particularly under the Enhanced Duty
- Potential reputational risk if obligations are not met and enforcement action is taken
- Greater emphasis on security planning and staff training as part of operational resilience
Actions for businesses to consider
Although a 24-month implementation period is anticipated, businesses which own and operate qualifying premises and events should consider early action:
- Conduct a capacity assessment to determine whether premises fall under the Standard or Enhanced Duty
- Develop or update security plans and ensure staff receive appropriate counter-terrorism training
- Monitor official guidance and prepare for inspections by maintaining accurate compliance records
- Integrate security planning into operational risk frameworks
Further details
The SIA will issue further guidance, but you can find the Home Office’s Overarching Factsheet here and a more detailed factsheet on Martyn’s Law here.
England Devolution and Community Empowerment Bill
2026 will be a pivotal year for English local governance. The English Devolution and Community Empowerment Bill (Bill) was introduced into Parliament in July 2025. It aims to standardise devolution arrangements, expand mayoral and local powers, and strengthen neighbourhood-level decision making across England. It also, unexpectedly, includes reforms to commercial leasing by proposing a ban on upwards only rent reviews in new and renewed business tenancies.
This article focuses on two aspects of the Bill of interest to real estate owners, investors and occupiers – the Community Right to Buy and the proposed ban on upwards-only rent reviews in business tenancies.
Community Right to Buy
The Bill introduces a new community right to buy, replacing the current ‘community right to bid’ regime for the preservation of Assets of Community Value (ACV) which was brought in by the Localism Act 2011.
If enacted, this new right would give community groups the first opportunity to purchase an ACV when the owner puts it up for sale. The current moratorium on the sale of the ACV would be extended from six to 12 months, giving community groups more time to raise funds to buy the asset but restricting the owner’s ability to sell the asset to its preferred buyer and delaying potential development for a longer period.
In addition, a wider range of assets would be brought within the definition of an ACV, including assets that support the community’s economy and those that were historically important to the community.
A new designation is proposed specifically for Sporting Assets of Community Value (SACV) and all eligible sports grounds (along with supporting facilities such as car parks) would automatically, and permanently, be designated as SACVs.
Implications for businesses
Businesses that own property listed as an ACV or an SAVC may be negatively impacted:
- Reduced control over sales: owners will have to wait for a community group to decide if it wants to buy the asset and then wait for it to raise funds
- Extended sales process: sales could be delayed, which is a particular concern for businesses who need to liquidate assets quickly to alleviate financial pressures or facilitate winding up
- Uncertainty: it won’t necessarily by clear to property owners when and if a community group will buy a particular asset and other interested buyers may not be prepared to wait
Ban on upwards-only rent reviews
The stated aim of this aspect of the Bill is to “make commercial leasing fairer for tenants, ensure high street rents are set more efficiently, and stimulate economic growth” by allowing rents to go down as well as up.
If enacted, upwards-only rent review clauses in new and renewal business tenancies will be unenforceable. The rent review methodology set out in the lease will still be used, but the new rent may be higher, lower or equal to the previous rent. Tenants would also be enabled to trigger the rent review, even if the lease does not provide for this.
The changes, which would not be retrospective and so would not affect leases already in place or already contracted to be granted before the commencement date, would take effect as amendments to the Landlord and Tenant Act 1954. A very limited number of leases, such as agricultural tenancies and mining leases, would be excluded from the ban. Stepped rents would not be outlawed.
There are a number of anti-avoidance measures, preventing tactics like:
- Minimum rent reductions (known as collars)
- Side agreements to offset rent decreases
- Landlord-only rent review triggers
Implications for businesses
Inclusion of the ban in the Bill took the market by surprise, coming as it did without any prior consultation or engagement with the industry. It immediately caused nervousness amongst investors and funders, given the potential impact on rental streams, which go to the heart of an investment property’s value. The British Property Federation has lobbied MPs and has been in dialogue with the Government, pointing out that the measures are unlikely to affect the very tenants the Bill aims to protect, because retail leases in the current market are so short, they don’t even contain rent reviews. As drafted, the provisions could therefore have a disproportionate impact on the office and industrial and logistics sector, where longer leases are more common.
More specifically, the implications of course depend very much on whether you are a landlord/investor or a tenant!
In other jurisdictions which already ban upward-only rent reviews, such as Ireland, there was an initial period of adjustment whilst landlords and tenants reassessed lease structures, but the markets quickly moved on
Landlords may prefer granting shorter leases without security of tenure so that rent can be re-negotiated on renewal to maintain flexibility across portfolios
Domestic investors are concerned that the uncertainty of not knowing whether rent will go up or down will deter investment, although international investors are already used to more flexible lease arrangements
Particularly smaller self-invested personal pensions, which rely on stable rental income from commercial property, may see reduced returns
It’s an irony that landlords may start to charge higher rents up front to offset the risk of future rent reductions
In order to protect their yield, landlords may offer fewer rent-free periods or lower contributions to fit-out costs. They may also look to impose tighter conditions on tenant break options
In the long term, market rents will better reflect economic conditions, potentially reducing costs for tenants (and ultimately consumers) during downturns
Government expects this to help high street rents adjust more realistically and stimulate growth
Actions for businesses to consider
The Bill is still in its early stages and is likely to be amended in the back-and-forth of the parliamentary process, given the strength of feeling from industry bodies such as the BPF. Landlords and investors should review portfolios and pipeline transactions to:
- Assess the scale of the impact: particularly when leases come up for renewal and where there are current void
- Consider any headlease/underlease mismatches: a specific issue for intermediate landlords with existing leases containing upwards-only rent reviews is that they won’t be able to pass any headlease rent increases on to new undertenants
- Viability: consider the viability of transitioning to compliant lease structures with market rent or index linked rent review models, with appropriate caps that still allow downward movement – landlords should be prepared for tenants asking for this, even though the ban is not yet in force
- Review lending covenants: lenders may increase debt service coverage ratio requirements and reduce loan-to-value ratios; they may also increase lending interest rates to mitigate the increased risk and unpredictability in rental income
Further details
You can access the current version of the Bill here and you can track its progress through Parliament here.
Renters’ Rights Act 2025
2026 will be a transitional year for private renting in England. The Renters’ Rights Act 2025 received Royal Assent in October 2025, and the Government has set out the phased plan to ‘switch on’ the new framework.
Phase 1 commences on 1 May 2026 and will:
- abolish Section 21 ‘no fault’ evictions
- convert all assured tenancies to periodic status
- limit rent increases to once per year via a statutory notice, replacing contractual rent review clauses. Tenants will also be able to challenge rent increases
The Government roadmap also trails strengthened local authority enforcement, with civil penalties of up to £40,000 for serious or repeat breaches, and later phases for the Private Rented Sector (PRS) Database and a new Landlord Ombudsman.
For further detail, see the Property Litigation section here.
You can read the Government guidance on the Act, issued in November 2025, here.
Landlord and Tenant Act 1954
To read more about this topic, see our article in the Property Litigation section here.
The Planning & Infrastructure Act 2025
To read more about this topic please refer to our articles in the Planning section here and in the Environment section here.
Introduction of The Building Safety Levy
The Building Safety Levy is a new tax on all but the smallest residential developments in England, designed to offset the Government's costs relating to fixing building safety defects. Developments that will be impacted by this levy are those which will create more than 10 dwellings, or more than 30 bed spaces in the case of student accommodation, although there are broad exemptions for social housing and supported housing. It will be payable in respect of all chargeable dwellings where the application for building control approval is made on or after 1 October 2026.
The named client/applicant on the building control submission is automatically responsible for paying the levy, with the local authority bearing responsibility for collecting the levy, even if building control is outsourced to registered building control approvers. The levy is attached to the relevant planning permission, as opposed to individual building control applications, to prevent avoidance by splitting up a development into multiple smaller applications that do not qualify to pay the levy.
Individual rates have been published for each local authority in England, with the rate for previously-developed land set at 50% of the full rate, with the intention of encouraging regeneration projects.
Implications for businesses
The levy introduces a significant new cost which, while structured to align with the scale of the development and local values, adds an additional burden to developers with impact on developments of marginal viability likely.
Actions for businesses to consider
Developers should ensure that sufficient allowance is made for the cost of the Building Safety Levy in site appraisals and is taken into account in the price agreed in fixed-price land contracts, or is a deductible. Existing long-term contracts and options should be reviewed to assess whether the new levy is deductible or not. Landowners should anticipate that the cost will be factored in to the valuation of residential land.
Further details
For further details you can read the Government’s Building Safety Levy guidance here.
Implications for businesses
It is now expected that new dwellings commenced after 1 January 2027 will need to meet the new standards, with transitional provisions applying until early 2028. The Government has said it is expecting to respond to the 2023-2024 consultation in early 2026 and table legislation later in the year, so during 2026 it should become clear exactly what the additional costs of compliance with the new standards will be.
Actions for businesses to consider
Developers should ensure that sufficient allowance is made for the cost of building to the new standards in site appraisals and is taken into account in the price agreed in fixed-price land contracts, or is a deductible. Existing long-term contracts and options should be reviewed to assess whether the cost of compliance is deductible or not. Landowners should anticipate that the cost will be factored in to the valuation of residential land.
Further details
For further details you can read the Future Homes and Buildings Standards 2023 consultation here.
Changes to leasehold/commonhold
The Government continues to pursue a major shake-up in property ownership with a renewed push to reform leasehold and promote commonhold. The Government’s white paper, published in March 2025, sets out a clear vision: to phase out leasehold for residential developments by making commonhold the standard for new flat developments and creating a fairer and more transparent model for existing properties.
Leasehold reform is already underway under the Leasehold and Freehold Reform Act 2024, which received royal assent in May 2024. Initial steps have been implemented, including removing the two-year ownership requirement for lease extensions and expanding the right-to-manage provisions. We expect secondary legislation to go even further, potentially banning ground rents, simplifying lease extensions and increasing transparency over service charges and managing agents. Commonhold is being repositioned as a modern alternative. Under the Government’s plan, new leasehold flats will be banned once the improved commonhold framework is in place. Owners would hold their unit outright, while a commonhold association would look after shared areas. This model gives greater control to residents and removes the scope for excessive fees and vaguely-explained decision making.
A draft leasehold and commonhold reform bill is expected shortly. Regulators will consult further on measures like service charge disclosure, the regulation of managing agents, and the removal of freeholders’ ability to forfeit leases over minor breaches.
Implications for businesses
Transitioning from leasehold to commonhold could simplify ownership structures, reduce friction, and offer a more predictable framework for managing communal property, although commonhold in its current form has notably not been used on any scale since its introduction over 20 years ago. However, the changes likely to be brought in during 2026 look set to change the landscape of homeownership, with implications for how buildings are financed, managed, and marketed.
News
RICS Professional Standard, Service charges in commercial property (second edition)
The Professional Standard came into effect on 31 December 2025. It promotes consistency, fairness and transparency in service charge management and administration. It applies to RICS members and RICS-regulated firms, and introduces mandatory obligations covering budgeting, accounting, apportionment, disclosure and custody of funds, alongside best practice guidance that will be used as a benchmark in disputes.
The requirements in the Professional Standard are:
- Landlords and agents must only seek to recover expenditure that is covered by the terms of the lease
- Agents cannot seek to recover more than 100% of the proper and actual cost of the services provided – landlords should not make a profit from the supply of services to tenants
- Agents must issue budgets to tenants at least one month before the service charge year starts and must provide service charge year end accounts within four months of the end of the service charge year
- Where these timeframes are not met, tenants must be given a timely explanation for the delay as well as an indication of when the budget or accounts will be provided
- Agents must also supply tenants with a service charge apportionment matrix with the budget and the accounts; the matrix must set out how the service charge has been calculated and apportioned
- Service charge funds must be held in a separate bank account and interest must be credited to the account after appropriate deductions
Implications for businesses
Although the Professional Standard does not bind landlords directly, and does not override express lease provisions, failure to comply may be a consideration if a managing agent is alleged to have been negligent in performing its service charge management duties.
Existing lease provisions should be interpreted as far as possible in line with the 2025 Professional Standard, taking account of the size, nature and type of property in question as well as the total amount of service costs and the amount each tenant has to pay. Where lease terms are ambiguous (or absent), service charges should be managed and administered in accordance with the Professional Standard.
There is also a greater emphasis on the use of Alternative Dispute Resolution (ADR), with the ability for either party to require ADR for dealing with service charge disagreements. Advisors should remind both landlords and tenants that even where the lease does not specifically allow for ADR, the parties can still agree to use it as a cost-effective and more timely alternative to court proceedings. Resolution through ADR also means the landlord-tenant relationship is likely to be preserved.
Actions for businesses to consider
- Review service charge processes: ensure you can meet the deadlines for providing both budgets and reconciliations, and that you are transparent about how costs are calculated and apportioned
- Develop/maintain routine tenant engagement: holding regular meetings, responding promptly to enquiries and making supporting documentation, such as quotes and invoices, available, all go towards building trust and reducing disputes, especially during periods of inflationary cost pressure
Further details
You can read the Professional Standard in full here.
£39bn grant funding allocation
The Government has announced a 10-year £39 billion Social and Affordable Homes Programme (SAHP) to support social and affordable housebuilding across England. The promise is for a sustained pipeline of grant funding to Registered Providers, local authorities and housebuilders and is primarily designed to support an increase in social-rent homes but also to allow for more ambitious mixed developments.
The precise delivery mechanisms are to be confirmed and are likely to develop throughout the decade, but the broader direction is already clear: moving from patchwork funding towards a more predictable, strategic model.
Implications for businesses
The Government aims to create the conditions for more consistent use of modern construction methods, better supply-chain planning and a stronger foundation for multi-year regeneration schemes and more ambitious partnerships. 2026 should see some of the impacts of the funding stream start to become clear.
Government Mortgage Equity Loan Scheme (Help to Buy 2?)
The prospect of a new Government-backed mortgage equity loan scheme is gaining traction, with industry voices and political pledges hinting at a revival of something akin to Help to Buy, although the November 2025 Budget contained no announcement of any such scheme. While the original scheme closed in 2023, its impact on first-time buyers and housing delivery remains fresh in the minds of policymakers and developers alike.
The Government permanent mortgage guarantee scheme (Freedom to Buy), which was introduced in July 2025, partially addresses the issue by supporting high loan-to-value mortgages. It allows buyers to access 91–95% loan-to-value loans with a 5% deposit. The Government provides lenders with a guarantee to reduce default risk, encouraging high-LTV products. The Government expects it to facilitate around 36,000 additional mortgages for first-time buyers annually.
The Home Builders Federation has proposed a model where buyers contribute a 5% deposit, the Government provides a 15% equity loan, and developers add a small percentage of the purchase price. This structure would mirror the original Help to Buy but with refinements aimed at balancing risk and cost. However, with interest rates gradually falling, it remains uncertain whether the Government will consider it necessary to introduce further demand-side measures to support the housing market.
For further details you can read the 2025 Mortgage Guarantee Scheme guidance here.
Golden Brick Changes
Recently the Housing Forum and National Housing Federation welcomed the fact that the Government has announced a consultation on reform of VAT rules to incentivise the development of land intended for social housing. The proposed reform under discussion would allow for zero-rating on sale of land to social housing providers earlier than the ‘Golden Brick’ stage, potentially once outline planning permission has been granted.
Of course, the Golden Brick treatment is embedded in existing VAT and tax law; changing it requires legislative or regulatory amendment and governments typically move slowly with changes to tax rules. However, in light of the Government’s desire to support social housing, Golden Brick reform seems reasonably possible and the consultation on VAT treatments of social housing sites suggests momentum.
Implications for businesses
Depending on the outcome of the consultation, social housing developments may become easier to unlock and parties will be free to contract on more flexible terms without falling into a VAT trap.
National Housing Bank
In June 2025, the Government announced the creation of the National Housing Bank as a subsidiary of Homes England, with the intention of making available up to £16 billion in lending and guarantees to support projects that traditional lenders have been hesitant to finance, especially those that require long-term commitments or carry higher complexity. Potentially this marks a significant shift in the UK’s approach to housing finance, and access to more flexible funding could unlock stalled developments and accelerate schemes that have been sitting on the margins of viability.
While the main focus is on smaller builders in the SME sector and affordable and social housing, the benefits are likely to reach across the housebuilding industry. Developers working on mixed-tenure projects may find that low-interest loans and risk-sharing options reduce the financial strain of upfront costs. Currently, the bank is expected to be fully established and start operations in April 2026.
For further details you can read the Government's press release here.
Case law
Building Safety Act 2022
Enforcement of the Building Safety Act 2022 (BSA) kept the tribunals and courts busy in 2025, with a slew of cases, some of which made it to the Supreme Court and others with appeals to the highest court pending for hearing in 2026.
Triathlon Homes LLP v Stratford Village Development Partnership, Get Living PLC and East Village Management Ltd [2025] EWCA Civ 846
The Court of Appeal confirmed that Remediation Contribution Orders, which can require a wide range of parties to contribute towards the cost of safety remediation works, can be used to recover costs incurred before the BSA came into force. Permission to appeal to the Supreme Court has been granted in relation to the retrospectivity of the BSA, so we should have a definitive decision in 2026.
For more information on this case, please see our article in the Construction & Engineering section here.
Adriatic Land 5 Ltd v Long leaseholders at Hippersley Point [2025] EWCA Civ 856
As part of the same hearing, the Court of Appeal confirmed that Schedule 8 of the BSA, which prevents landlords from passing historical building safety costs on to tenants via service charges, includes costs incurred before the BSA came into force in June 2022. Landlords who did not take steps to recover relevant costs before that date are now prevented from doing so, although permission to appeal to the Supreme Court has been granted, again on the retrospectivity point.
Almacantar Centre Point Nominee No.1 Ltd v De Valk [2025] UKUT 298 (LC)
The Upper Tribunal confirmed that qualifying leaseholders are not liable for service charge costs relating to the removal or replacement of unsafe cladding, even where the unsafe cladding system was not a ‘relevant defect’ as defined by the BSA. Leaseholder protections in Schedule 8 of the BSA were found to apply to unsafe cladding irrespective of when it was installed – in this particular case, the cladding system was installed in the 1960s when the building was constructed. The landlord has been granted permission to appeal and the Court of Appeal hearing is set to be heard by October 2026.
The Health & Safety Executive v Integritas Property Group (IPG) Ltd [2025] EWHC 2613 (TCC)
In late 2025, the Health & Safety Executive (HSE) as the then Building Safety Regulator (BSR) under the BSA, was successful in obtaining an interim injunction preventing the occupation of a higher-risk building that did not have a building regulations completion certificate. The developer, Integritas Property Group (IPG) Ltd, had been actively marketing a property for student accommodation, despite having been issued with a contravention notice, a cancellation notice and a stop notice. The court felt that, given the seriousness of the safety concerns, damages would not be an adequate remedy and so granted an interim injunction. The decision was significant because it was the first time the HSE had sought an injunction in exercise of its regulatory functions under the BSA – it does not specifically give such a power to the HSE. Whilst the functions of the BSR are transferred to a new independent body under the arms-length control of the Ministry of Housing, Communities and Local Government with effect from 27 January 2026, we may see more cases brought where there are extreme safety concerns.
Key contact
Darren Williamson
Partner & National Head of Real Estate
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