Welcome to the GT London Real Estate Practice’s Spring 2026 quarterly legal update, reviewing recent legal, regulatory, and policy developments affecting stakeholders across the UK real estate sector.
New Contractual Control Regulations
On 9 March 2026, draft regulations (the Provision of Information (Contractual Control) (Registered Land) Regulations 2026 (the Regulations)) on the disclosure of contractual control rights over registered land were published.
The Regulations introduce a new statutory regime requiring transparency around options, conditional contracts, pre‑emption rights and similar arrangements that confer control over future development or disposal for development.
Once in force, the Regulations will impose a new disclosure duty on beneficiaries of contractual control rights, with submissions to be made to HM Land Registry via a new digital submission system. This duty will apply not only when rights are granted, but also on assignment, variation, exercise or termination, with a standard 60‑day reporting window. Importantly, the regime focuses on the substance of the rights, not labels or drafting, meaning agreements that confer control over development outcomes may be caught even where “development” is not expressly referenced.
Although the scope is broad, exemptions are relatively narrow and must be actively considered and documented. Transitional provisions will also apply, with certain rights created before the Regulations come into force (see below) still needing to be reported by 6 October 2027, and from 6 April 2027 onwards all trigger events will fall within the ongoing 60‑day reporting requirement. Failure to comply — or providing false or misleading information — will constitute a statutory offence, carrying serious criminal sanctions.
Matthew Priday and Rachel Whittaker last flagged this topic in a January 2024 GT Alert. A key point of continuity is that the regime will not be backdated to 2021, as originally proposed. However, these developments will now need to be considered as part of transaction structuring, documentation and funding arrangements, including express registration obligations and potential financing conditions tied to evidence of compliance.
The Regulations may be finalised in the first half of this year and come into force on 6 April 2027.
Proposed Ban on Upwards Only Rent Reviews – Retrospective Impact
In an April 2026 GT Alert, Simon Elliott analyses the proposed statutory ban on upwards only rent reviews (UORRs) in commercial leases and highlights a significant development arising from amendments to the English Devolution and Community Empowerment Bill. While the ban has been anticipated since mid-2025, a Lords’ amendment introduced in March 2026 creates a limited but important retrospective effect for renewal options agreed now. Under the current drafting, the ban would apply not only to rent review provisions in new and renewal leases, but also to the day one rent payable under a renewal lease granted pursuant to a renewal option entered into on or after 17 March 2026, even though the legislation is not yet in force. The proposals are already influencing lease negotiations, asset management strategies and funding assumptions, as landlords reassess whether and how to include renewal options going forward.
Renters’ Rights Act 2025 & Purpose‑Built Student Accommodation
The first tranche of reforms under the Renters’ Rights Act 2025 comes into force on 1 May 2026, introducing material changes to tenancy structures and possession rights.
Key measures taking effect include:
- the removal of fixed term assured tenancies in favour of periodic tenancies;
- the abolition of “no fault” section 21 evictions; and
- the introduction of revised and expanded statutory possession grounds.
Landlords, asset managers, and investors may wish to actively prepare operational processes and documentation to ensure compliance from day one.
In terms of qualifying private Purpose‑Built Student Accommodation (PBSA) – this will fall outside the new regime, but only where specific conditions are met under the Student Accommodation (Miscellaneous Provisions) (England) Regulations 2026. To benefit from the exemption, PBSA providers must ensure they are members of the ANUK/Unipol Code of Practice (or appoint a Code‑compliant managing agent) and that the accommodation is student‑only or principally student‑occupied. Where available, the exemption allows PBSA providers to continue granting fixed‑term common law tenancies aligned with the academic year, retain flexibility on rent in advance, and recover possession at the end of term without reliance on the new statutory possession regime.
The exemption is not retrospective, meaning existing student ASTs (and those entered into before 1 May 2026) will automatically convert into assured periodic tenancies on commencement. Providers should therefore take transitional steps, including issuing the Government information sheet to affected tenants by 31 May 2026 (failure to do so can attract civil penalties of up to £7,000) and, where relevant, serving Form 3A by 29 May 2026 in order to preserve access to the transitional modified student possession ground (Ground 4A) for the next academic year. With limited scope to rely on section 21 beyond commencement, PBSA providers may wish to review Code membership status, tenancy documentation, tenant communications and internal processes to avoid lost exemptions, reduced control over possession and operational disruption for the 2026/27 academic year.
AIFMD II Implementation
On 16 April, amendments to the Alternative Investment Fund Managers Directive (AIFMD) took effect across Europe to implement AIFMD II, reflecting increased regulatory focus on credit and debt funds. The reforms have been driven by concerns around the growth of private credit and perceived regulatory gaps, and are primarily aimed at strengthening risk management, transparency and investor protection in loan‑originating AIFs.
Key changes include new restrictions on loan origination activity: AIFs must generally retain at least 5% “skin in the game” on loans they originate and may not lend more than 20% of AUM to other AIFs or financial institutions, nor lend to their own AIFM. The amendments also introduce leverage caps (300% for closed‑ended AIFs and 175% for open‑ended AIFs), enhanced cost and expense disclosure relating to loan administration, and more prescriptive risk‑management requirements. While AIFMD II amends rather than replaces the existing directive (Directive 2011/61/EU), and references to “AIFMD” in fund documentation will remain unchanged, the changes are having practical consequences for fund structuring, portfolio construction and ongoing compliance for private credit strategies.
For further background, see our December 2023 GT Alert by Tim Dolan: AIFMD II: New Regulation of Debt Funds and Other Key Changes.
Commonhold and Leasehold Reform
In January 2026, the Government published the Draft Commonhold and Leasehold Reform Bill (the Bill), proposing a significant overhaul of residential property ownership in England and Wales. The Bill seeks to make commonhold the default tenure for new flats, effectively banning the grant of long leasehold interests in most new residential developments, while also reforming the commonhold framework to make it more workable for both new and existing schemes. For existing leaseholders, the proposals include a cap on ground rents at £250 per year, with ground rent reducing to a peppercorn after 40 years, and the abolition of forfeiture, to be replaced with a more proportionate enforcement regime.
Alongside publication of the draft Bill, the government launched a consultation: Moving to commonhold: banning leasehold for new flats, seeking views on implementation, exemptions and transitional arrangements. This consultation is part of the Bill’s pre‑legislative scrutiny process and closed on 24 April 2026.
The Government will now consider responses before finalising the legislation for introduction to Parliament.
Non-Bank Lending in the Spotlight
Non-bank lending in real estate continues to expand, driven by tighter bank capital requirements and evolving regulatory constraints.
In a four‑part GT Alert series Partha Pal and Tim Dolan analyse this growth through the lens of the House of Lords Financial Services Regulation Committee’s inquiry into non‑bank financial institutions (NBFIs). The alerts explore the Committee’s concerns around systemic risk, leverage and liquidity in the non‑bank sector, and assess what this emerging regulatory scrutiny could mean in practice for private credit funds and alternative real estate lenders. The series also considers how non‑bank lenders are currently operating across the real estate capital stack, how deal structures and pricing are developing, and the key structuring, security and enforcement issues for borrowers and investors navigating an environment of increased regulatory attention.
Links to the four alerts:
Non-Bank Lending in the Spotlight: Regulatory Capital and Its Impact (October 2025)
Do Non-Bank Financial Institutions Pose a Systemic Risk? (December 2025)
* Special thanks to colleagues across the London Real Estate Practice for their contributions to this update.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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