Living In 2026: Living Sector Legal Talking Points For The New Year

In 2025, the new Housing Secretary, Steve Reed, implored the sector to "build, baby, build", with the Government sticking to its ambitious target of delivering 1.5 million new homes by the end of this Parliament.

For our clients, this means delivering the right homes in the right locations.

Across the sector there is a growing choice of for sale and rental housing options, and we remain strongly of the opinion that all of these options must be promoted in order to deliver on housing targets, and to provide the variety of accommodation required by a population with diverse needs, from senior living to first time buyers.

The sector is operating in market conditions which remain challenging and, in some locations (such as London), the combined headwinds of existing market conditions and emerging regulatory challenges are making many types of schemes unviable at present. When considering recent and emerging legislative and regulatory changes across the sector, it's clear that, whilst the various Living asset classes share many similarities, important differences in their markets and models mean that they are impacted in distinct ways by these reforms. The Government needs to take these differences into account at it rolls out its programme.

As we move into 2026, we hope that the Government can unlock the potential of all of the asset classes across the housing and Living sectors to deliver on its substantial housing policy and growth objectives. In this article, we consider some of the key legal and regulatory changes for the Living sector.

Building Safety Act 2022: what's next?

2026 is expected to be another pivotal year for building safety. Developers must start to prepare for levy compliance, while regulators and industry professionals should anticipate structural changes to oversight and enforcement. For leaseholders and residents, these reforms promise greater protection and accountability.

The Building Safety Act 2022 (BSA) and its related legislation continues to reshape the Living sector, impacting all stakeholders from Government to housebuilders, developers, investors, funders, operators, freeholders, leaseholders, housing associations, property managers, occupiers and others.

Stakeholders with interests in both England and Wales will be watching closely for any divergence as the Welsh Government brings forwards its own position in the Building Safety (Wales) Bill.

For full analysis see our article Building Safety: what will see in 2026? - Levy, BSR Reform, second staircases and remediation Bill, including key points around:

• Introduction of the Building Safety Levy - due to come into force in England on 1 October 2026. The levy will apply to most new residential developments Including build to rent and student accommodation, It is likely there will be a surge in building control applications in the first three quarters of 2026 as developers seek to avoid levy liability.
• Further progress on Grenfell Inquiry recommendations
• Building Safety Regulator (BSR) Reform and "Fast Track process"
• Introduction of Remediation Bill
• Supreme Court appeals on retrospectivity of the BSA

In addition, property managers will continue to be involved in the building safety conversation in 2026 as the role and involvement in compliance develops.

See our recent insight: Two years on: the property manager's role in occupation phase building safety for further information.

Renters' Rights Act 2025: what to expect in 2026

The Renters' Rights Act 2025 introduces the most significant overhaul of England's private rented sector in decades, aimed at enhancing tenant security and raising standards.

Key reforms include abolishing fixed term assured tenancies in favour of open-ended periodic ones, ending section 21 "no fault" evictions and requiring landlords to rely on revised statutory possession grounds. Rent increases are restricted to once a year and subject to challenge, while rental bidding and large upfront payments are banned. The Act also extends the Decent Homes Standard and Awaab's Law to the private sector, mandates landlord registration on a national database and establishes a new Ombudsman for dispute resolution. Additional measures prohibit discrimination against families and benefit claimants and introduce a statutory right for tenants to request pets.

These changes impact all Living sector rental assets and a more detailed account can be found in our article on the key takeaways for the private rented and Living sectors.

There are nuances around student accommodation and further information can be found in our update on student tenancies: a lesson in legislative change.

The Government's roadmap to implementation of the reforms is explained in our article: Renters' Rights Act: the countdown to 1 May 2026 begins.

Planning reform: unlocking housing and infrastructure growth

The Planning and Infrastructure Bill is expected to get Royal Assent imminently. Although there have been some changes during its progress through Parliament, Government still aims to unlock the development of 1.5 million homes and fast-track 150 infrastructure projects. It seeks to cut friction in planning and delivery, driving a policy shift towards speed and flexibility under centralised control. These changes carry significant legal and commercial implications for investors, developers, promoters and infrastructure providers.

We will be releasing more analysis when the Bill gets Royal Assent. In the meantime, if you would like to discuss any aspect of the Planning and Infrastructure Bill and how it might impact you, please contact our Planning and Environment teams.

In addition, Government recently announced new planning measures to help to fulfil its commitment to build 1.5 million homes:

• to provide a "default yes" to planning applications within a 15 minutes' walk of well-connected stations;
• to consider intervention if a local planning authority intends to reject a planning application for developments with 150 homes or more; and
• to remove certain organisations from the list of statutory consultees in planning applications.

The "default yes" policy is to apply to land around both train and tram stations with a sufficient frequency of services. It also extends to greenbelt land. However, the greenbelt golden rules apply which are: ensuring higher levels of affordable housing, local infrastructure and green space are provided to local communities.

Further details on what is meant by "default yes" are yet to be confirmed. However, given the fact that this reform is likely to target brownfield sites, it is possible the criteria before a "default yes" will include a consideration of the following risks: contamination, flooding, transport and highways impacts and the impacts of noise.

It is expected that this detail will follow shortly after a revised version of the National Planning Policy Framework. These latest proposals, together with the Planning and Infrastructure Bill – and the Government's response to the Biodiversity Net Gain public consultation (also expected imminently) mean that there will be much for the development industry to consider as they promote planning applications in 2026.

With recent policies opening the door to conversations around lowering affordable housing requirements to boost scheme viability in London, in 2026 might we see this conversation extend nationally to help unlock viability challenged schemes?

We expect Government to give us more of an indication on the future direction of developer contributions following recommendations in two separate reports in recent months. Currently new amenities such as GP surgeries and schools are funded through a mix of section 106 agreements, and the Community Infrastructure Levy. On 17 October 2025, the Public Accounts Committee published a report: "Improving local areas through developer funding". Among other things, this highlighted that at least 17,000 affordable housing units provided through section 106 agreements remain unsold. Shortly afterwards, the Housing, Communities and Local Government Committee published Delivering 1.5 million new homes: Land Value Capture favouring iterative reform over wholesale replacement of the current system. The British Property Federation analysed the recommendations and while supporting several (including greater standardisation of s106 agreements) the BPF expressed concerns regarding recommendations to mandate specific levels of social rent and affordable housing provision in New Towns, citing potential pressures on development viability. The government is expected to respond to the committee's report shortly.

Minimum Energy Standards: higher ratings required for domestic property

We expect changes to the energy performance certificate (EPC) regime and the minimum energy efficiency standards for domestic properties to be finalised in 2026.

Government consulted early in 2025 on various proposals linked to increasing the minimum EPC rating for let domestic property. The main proposals were:

• Increasing the minimum to EPC rating C (or equivalent under new metrics that might be introduced after changes to the EPC regime).
• New leases would be required to meet the minimum standard from 2028 and all let property from 2030.
• The cost of improvements to be capped at £15k per property (after which the landlord would be exempt for 10 years).
• Expanding the regime to short term lets.
• Changes to the existing exemptions.

Government also expects to introduce the minimum standards to the social rented sector by 2030 (also with a minimum EPC rating C).

Consultation feedback continues to be analysed but it seems likely that the changes to the EPC assessment criteria and the minimum standard will be finalised early in 2026 to give landlords enough time to implement before 2028. This change is often cited with other potential landlord costs and tax changes as a reason why private landlords may exit the market – releasing their properties to private owner occupiers. This remains to be seen – a more obvious consequence may be that additional costs and flexibility for tenants results in higher rents for renters. Another concern that could have implications for the wider market is the availability of EPC assessors if there is a rush for EPCs at the same time assessors are adjusting to a new methodology.

Leasehold and Freehold Reform Act 2024 – current status

The Leasehold and Freehold Reform Act 2024 was passed in the last days of the previous Government. It was intended to improve consumer choice and fairness in leasehold and to implement recommendations made by the Law Commission in 2020. However, most of the provisions are not yet in force – many require further consultation and secondary legislation to be commenced. The new Government also reported that a small number of provisions had serious flaws which must be rectified by primary legislation.

In can be difficult to keep track of whether particular provisions are in yet in force. To date the Government has:

• laid regulations which came into force on 31 January 2025 to permit leaseholders to extend their lease or buy their freehold without having to wait for two years after purchasing their property;
• implemented (with effect from 3 March 2025) the Act's right to manage provisions which include changing the qualifying criteria to give more leaseholders the RTM and removing the requirement for leaseholders to cover the freeholder's legal fees when make a RTM claim;
• consulted on proposals to increase transparency of buildings insurance fees. The Government is analysing the feedback on this consultation which closed in February 2025, and;
• consulted on measures to strengthen protection over charges and service – this consultation closed in September 2025.

Other provisions, including the ban on the sale of new leasehold houses and the abolition of ground rents in existing long residential leases, remain idling on the statute book. With no firm timing, these will remain talking points until there is an implementation timetable or Government expressly tells us there is to be a change in policy.

Commonhold Reform: opportunities and concerns

In the King's Speech following the July 2024 election, the Government committed to "take steps to bring the feudal leasehold system to an end".It aimed to publish a draft Leasehold and Commonhold Reform Bill in the second half of 2025.

The aim is to reinvigorate the commonhold tenure by modernising the legal framework which already exists. Commonhold is a way of enabling the freehold ownership of flats and purports to avoid the perceive problems of leasehold ownership.

Although many in the Living sector would not object to the introduction of a more workable commonhold system – there is concern that a rushed or problematic system could cause problems and delays for new schemes and transactions as the market adjusts. Government will need to be careful that the updated commonhold is introduced in a way that encourages developers, investors and occupiers rather than creates uncertainty that discourages investment – and ultimately the Government's aim to drive growth.

Our article, Commonhold is about to become more common, sets out the details of the Government's Commonhold White Paper which will form the basis of the draft Bill (which has not been published at the date of this article).

Changes to the process of buying and selling houses

The Government is proposing major reforms to the conveyancing process in a bid to simplify house buying. They want to cut costs, speed up transactions and reduce the number of sales that fall through before exchange.

To this end, a consultation is open until 29 December 2025 and interested parties can respond to the proposals. These include:

• Mandatory information upfront – certain key documents, search results, surveys, title information and planning information must be available before a property can be marketed.
• Early binding offers – parties could enter binding contracts early to make it harder for either to walk away.
• A mandatory code of practice for estate agents and conveyancers.

Fewer failed transactions and faster completions will be welcome by everyone, however, thought will need to be given about how this will work. For example, will buyers and lenders be prepared to rely on a survey commissioned by a seller? Searches ordered before a property is marketed may be out of date by the time parties are prepared to exchange contracts and ordering fresh ones will be costly and cause delays. Some will remember the ill-fated Home Information Packs introduced in 2007 and scrapped in 2010 because of similar issues. Hopefully, these can be addressed in the new proposals.

Once the Government has had a chance to review responses to the consultation, it plans to publish a roadmap for change in 2026.

What are the tax implications for the Living sector following the Autumn Budget 2025?

The Budget headlines were somewhat unspectacular, but there are potential implications for the Living Sector, from the non-property measures and some of the property related detail including:

• income tax thresholds were frozen which may have implications for the cost of labour and affordability for home buyers over the next 5 years;
• an increase in income tax for property income is targeted at private landlords – but is likely to be passed on to tenants through higher market rents over time (notwithstanding the rent protections given to tenants in the Renters Rights Act);
• the "mansion tax" is a new annual tax on residential properties from April 2028 (officially known as the High Value Council Tax Surcharge) levied on properties worth over £2 million (on 2026 valuations). The annual charge starts at £2,500 and rises to £7,500 for properties valued over £5 million. Early media coverage has focussed on the effect on prices and demand for high value properties and the effect on (so called) "property rich, cash poor" individuals. The implications for the wider Living sector remain to be seen but sceptics are concerned this could be the "thin end of the wedge", such that once the tax is introduced, its scope could expand in the future to lower valued domestic property;
• Government announced a consultation will follow on VAT reform to incentivise the development of land for social housing. Developers and providers will be watching closely – particularly for any sign that deal structures could be simplified by removing the need to structure around the "golden brick" (in simple terms - selling land after construction begins);
• a permanently lower business rates multiplier for retail, hospitality and leisure will be funded from higher rates on more expensive properties (such as warehouses used by online retailers with rateable values of £500k or more). Developers and operators of mixed used Living assets with a commercial element will be looking at how this might help demand for and/or viability of those commercial units, and;
• the standard rate of Landfill tax will increase by RPI with the lower rate increasing by the cash equivalent of the amount by which the standard rate increases (to maintain the differential between the two rates). Plans to transition to a single rate by 2030 have been dropped which was welcomed by the Home Builders Federation.

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