Year-end Reflections: New Year Directions

As 2025 draws to a close, we reflect on a year of significant legislative changes shaping the real estate market and consider what they mean for the sector as we head into 2026.

In today's blog we're continuing our annual tradition of looking back over the year to see what we've been gifted in terms of developments in the law, and how these might continue to impact the real estate market in 2026. It's been another busy year for legislative change, with the government seeking to accelerate the promises it made in its manifesto to "Get Britain Building" and to streamline the planning process to allow key infrastructure projects to proceed. Here are some of the highlights from the past year...

Renters' Rights Act 2025

Having begun life as the Renters (Reform) Bill under the previous Conservative government, the Renters' Rights Act 2025 ("RRA") was finally passed in October 2025.This fundamental reform of the private rented sector will see a shift in the balance of control between landlords and tenants, with much increased regulation for landlords and greater security for tenants.

Following publication of the government'sroadmap for implementationof the RRA, we now know that the first major wave of provisions to be brought into force will take effect from 1 May 2026.From that date, allnew and existingtenancies will be rolling, periodic tenancies with a maximum period of one month.Whilst tenants will have the ability to terminate their tenancies at any time on at least two months' notice, the picture is somewhat different for landlords.The abolition of section 21 no-fault evictions (which also comes into force on 1 May 2026) will mean that landlords have much less flexibility when it comes to regaining possession of their premises, and will have to rely on section 8 of the Housing Act 1988 and one of the grounds contained in schedule 2 in order to bring a tenancy to an end.Contested terminations will need to be heard before the County Court and it is widely acknowledged that the Court system, already under pressure and under-funded, is not ready for a further influx of cases which will arise as a result of the RRA.As we look forward to 2026, it will be interesting to see how the government fulfils its promise to support the courts to ensure there is sufficient capacity in the system to handle the anticipated increase in workload, with a "digital end-to-end [court] service" promised by Spring 2027.Again, this is something that has been long-promised, but not yet delivered.

For further commentary on the RRA and steps that landlords can be taking now to prepare for implementation, take a look atForearmed– our guide to likely trends in real estate disputes in 2026 and beyond.

Leasehold and Commonhold Reform

This time last year, our review of the key developments in 2024 highlighted the continuing emphasis on reform of the leasehold ownership system, with the government announcing its intention to implement changes in 2025 to the leasehold regime anticipated by the Leasehold and Freehold Reform Act 2024.These included increasing the limit on non-residential floor space for enfranchisement and right to manage from 25% to 50%, lease extensions being granted for 990 years and introducing a new valuation basis for lease extensions that excludes marriage value and for enfranchisement that notionally caps ground rent to 0.1%.

With less than a month to go until the end of the year, most of these changes have not yet been implemented – Q1 2025 brought the abolition of the two-year ownership requirement for lease extensions and the changes to the right to manage onlyA human rights challenge in the High Court over the valuation changes proposed by the Act was no doubt a key cause of the delay. However, the government has doubled down on its leasehold reform plan, with yet further changes announced in March of this year with the release of the Commonhold White Paper.Further detail on the proposals for reform of the little-utilised commonhold system can be found in ourblog on the White Paper.Again, further detail on these changes was promised by way of a draft Leasehold and Commonhold Reform Bill in the second half of 2025, but this has yet to be released for scrutiny.Suffice to say, if all of the promised reform emerges in 2026, it is going to be a busy year for those invested in the residential market.

Ban on upwards only rent review

Draft legislation to ban upwards only rent reviews (UORR) in commercial leases wasunexpectedly introduced in Julyas part of the English Devolution and Community Empowerment Bill (theBill), which has since passed through the House of Commons and entered the House of Lords. The ban will apply to new and renewal commercial leases in England and Wales, requiring landlords to agree either fixed rents or review clauses that allow rents to fall as well as rise. Existing leases remain unaffected, except for certain superior tenancies, and any UORR clause in a new or renewal lease will be unenforceable.

The latest version of the provisions published on 27 November offers little reassurance to landlords. The ban still applies across all commercial leases, despite its retail-focused rationale, and timing remains uncertain—implementation might not be until 2027. The Bill's second reading in the House of Lords, where there will be a general debate on all aspects of the Bill, is scheduled for 8 December. Industry bodies such as the BPF continue to lobby for a narrower scope, but for now, landlords should prepare for significant changes ahead. See ourForearmed 2026 Guidefor practical steps to take now.

Planning - the promise of reform

Summing up this year in terms of planning reform is no easy feat. The government has been very busy, rolling out two major Bills – the Planning and Infrastructure Bill, and the English Devolution and Community Empowerment Bill – alongside a flurry of working papers, consultations, updates to planning practice guidance and technical changes to the system itself. The government has been taking a holistic approach to reforming the system, recognising the essential role that it plays in delivering the government's goals of building 1.5 million homes and consenting 150 nationally significant infrastructure projects by the end of this Parliament. Already, we're seeing the impact of last year's "grey belt" policy in appeal decisions, and the ambition to deliver at least three New Towns signals a genuine intent to kickstart growth.

For all the activity (and recognising that we are expecting announcements about some of this any day now), at the moment much of the government's joined-up thinking remains just that. Although tantalisingly close, the Planning and Infrastructure Bill has not yet received Royal Assent, and the English Devolution and Community Empowerment Bill has some distance to travel. Even when this legislation makes it onto the statute books, the real test will be in the secondary legislation that follows. We're still waiting for the draft National Management Development Policies (NDMPs) and the much-anticipated updates to the National Planning Policy Framework. We've recently heard more on the promised overhaul of the local plan-making system, although draft secondary legislation still waiting in the wings. We await further news on other changes consulted upon, including potential changes to mandatory biodiversity net gain and to the statutory consultee system. And let's not forget Environmental Outcomes Reports, which we're told this government intends to pursue but about which we have no news as yet.

For those of us who've been following planning reform since the 2020 White Paper, it's tempting to sigh "plus ça change". Yet this time, the government is committed to fundamental change, not just tinkering at the edges, and is close to bringing forward the primary legislation and changes to national policy which are necessary to make this happen. Over the coming weeks we will see the true shape of NDMPs and the revised National Planning Policy Framework, and we hope that we will also have news of any further changes to the system. We look to 2026 with cautious optimism, hoping it will deliver the step-change needed for a planning system that truly meets the demands of modern development and investment.

Construction and the continuing impact of the Building Safety Act 2022

The Building Safety Act 2022 (BSA 2022) continued to impact real estate development projects this year; particularly in the well-publicised delays in securing approval for higher-risk buildings at the building control "gateways". The government announced a package ofreformsin June to accelerate housebuilding and the industry will continue to hope that the measures improve the system throughout 2026. The government also announced that implementation of the Building Safety Levy would be pushed back to 1 October 2026. The levy will be payable on "major residential developments" (ie developments of 10 or more new dwellings, or 30 or more new bedspaces in PBSA developments) subject to some exemptions, as provided for in theBuilding Safety Levy (England) Regulations 2025.

The policy aims of the BSA 2022 were upheld in the courts this year, with the Supreme Court supporting developers to recover the costs of remediating buildings from their contractors and consultants in the decision inURS Corporation v BDW Trading. See our analysis in:The final verdict on URS v BDW - Supreme Court supports recovery of remediation costs in residential projects. The Court of Appeal also confirmed the retrospective nature of the BSA 2022 and dismissed an appeal against some of the first Remediation Contribution Orders to have been made under the BSA 2022. For more, see our update inCourt of Appeal confirms the Retrospective Reach of the Building Safety Act 2022: Triathlon and Adriatic Land.

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