What to expect in Real Estate in 2026 - Top 12 legal picks

The real estate sector is expected to see notable legal and regulatory change in 2026, reflecting shifting economic priorities, sustainability goals and evolving market practices.

We set out below a summary of 12 key areas the real estate sector should be aware of in 2026.

1 – The Renter’s Rights’ Act 2025 – Roadmap for 2026

On 13 November 2025, the Ministry of Housing, Communities and Local Government published its roadmap for implementing the Renters’ Rights Act 2025.

This is a substantive reform and represents a significant shift in the balance between landlords and tenants in the Private Rented Sector (PRS). Collectively, these reforms are expected to improve tenant protections and housing standards, while requiring landlords and investors to adapt to a more regulated and structured rental market.

The most significant provisions are due to come into force in May 2026 via a phased approach.

Phase 1 will come into effect on 1 May 2026 which will see:

The end of assured shorthold tenancies and the abolition of section 21 “no fault” evictions. Existing assured shorthold tenancies will automatically convert to assured periodic tenancies (month to month) and no new fixed term tenancies can be granted
Grounds for possession will change as landlords can only recover possession by relying on the amended statutory grounds in the Housing Act 1988
Landlords will only be able to increase rent once a year via a new statutory procedure and tenants will have greater powers to challenge initial rents and rent increases in the First Tier Tribunal
Landlords and agents must state the proposed rent in all adverts and may not accept a higher rent – which will bring rent bidding wars to an end
Landlords will only be able to accept one month’s rent in advance.

Phase 2 which is due to come in in late 2026

Will stipulate that all PRS landlords will be required to register on the PRS database, pay a fee and provide certain personal information. After the database has been implemented, the Government will establish the new PRS Landlord Ombudsman which will provide a redress service for tenants.

Phase 3

Will be subject to prior Government consultations and will extend The Decent Homes Standard and Awaab’s Law, currently only relevant in social housing, to the PRS. This is to ensure that all PRS housing stock meets a minimum standard and if it falls short, local councils will be able to take enforcement action.

2 – Ban on upwards only rent reviews

The proposals to ban upwards only rent reviews for business tenancies in The English Devolution and Community Empowerment Bill came as a surprise in 2025 – as there had been no prior consultation on it.

This bill is now making fast progress and is now at Committee Stage in the House of Lords.

As well as prohibiting upwards only rent reviews, the drafting includes provisions allowing a tenant to trigger a rent review in certain limited situations. Stepped rents which allow rent to increase to a pre-agreed level at a specified time, are expressly excluded from the ban.

The bill is expected to become law later this year. However, it is currently unclear whether the measures in relation to upwards only rent review would come into force straight away.

As currently drafted, the proposals will apply to new business leases and renewal leases granted after the legislation takes effect. Existing leases, and leases granted pursuant to an agreement for lease entered into prior to commencement, will not be affected.

3 – Minimum Energy Efficiency Standards (MEES) and Energy Performance Certificates (EPCs)

This year, the Government is expected to confirm its proposals for the reform of EPCs and MEES requirements for domestic properties. It is anticipated that:

All domestic properties will need to meet a minimum EPC rating of C by 2030, with new tenancies required to meet the minimum by 2028. Landlords are expected to spend up to £15,000 to bring properties up to the minimum standards. Exemptions from complying with MEES may last longer, increasing from 5 to 10 years
The validity of EPCs could be reduced from the current 10-year period and a valid EPC may be required to be held throughout the period of any tenancy. This would result in increased compliance and assessment costs for landlords.

New proposals looking at similar changes for non-domestic properties are anticipated.

4 – Commonhold reforms

In March 2025, the Government published a white paper setting out its intensions for a comprehensive new legal framework to “reinvigorate commonhold” which, despite existing since 2002, has yet to displace the traditional leasehold structure.

Commonhold is a form of freehold ownership and would enable homeowners (typically in flats and apartments) to have a stake in the ownership of their buildings. This provides owners with enhanced control over how their buildings are run.

In the foreword to the white paper, Mathew Pennycook said : “At the heart of the commonhold model is a simple principle: the people who should own buildings, and who should exercise control over their management, shared facilities and related costs, are not third-party landlords but the people who live in flats within them and have a direct stake in their upkeep”. There is support for a more workable commonhold regime. However, concerns remain that insufficiently developed and thought out reforms could disrupt transactions and delay new schemes.

As part of the reform the Government intended to launch legislation to ban the sale of new flats on a leasehold basis in order to help ensure that commonhold becomes the standard tenure.

Draft legislation in the form of the Leasehold and Commonhold Reform Bill was expected before the end of 2025. However, Mathew Pennycook wrote to the chair of the Housing, Communities and Local Government select Committee stating that “due to unforeseen delays, we will not be in a position to publish the draft Bill and accompanying consultation on the banning of the use of leasehold for new flats before he Houses rise for the Christmas Recess”. The target date is now “early in the New Year”.

So, this is a Bill we expect to see imminently!

5 – Estate Planning for Farmers

The Autumn Budget 2025 saw the Government finally announce that the combined 100% Agricultural Property Relief (APR) and Business Property Relief (BPR) allowance would be transferable between spouses and civil partners which was a notable shift from its previous position.

In response to widespread feedback from the farming community following the Budget, on 23 December 2025 there was some good news for the farming community as the Government announced that the new allowance for 100% APR and BPR for inheritance tax will be increased from £1m to £2.5m with 50% relief continuing to apply to qualifying assets above that level. This enables families to plan succession more strategically, ensuring inheritance tax relief is preserved across generations with less extensive restructuring than previously envisaged.

6 – Assets of Community Value

Assets of Community Value (ACVs) are typically land or buildings that provide a benefit to the local community and can include pubs, libraries, playing fields, or other spaces that contribute to the social well-being of a local area. ACV’s are centrally governed to ensure they are not sold for commercial benefit.

The English Devolution and Community Empowerment Bill seeks to amend the governing framework of ACVs under the Localism Act 2011. It aims to fundamentally shift power from central government to England’s regions, moving away from a deal-based approach to a standardised statutory framework. The Bill is currently progressing through Parliament and is anticipated to achieve Royal Assent in 2026.

The Bill proposes the following key reforms:

Introduction of a community “right to buy” in England, replacing the existing “right to bid.”
A notice-driven process overseen by local authorities, which will include:
- Defined timeframes for agreeing a valuation between owners and community groups
- Appointment of an independent valuer if no agreement is reached
- Restrictions preventing owners from selling to another party if the community group agrees to purchase at the agreed price
Expansion of the definition of ACVs, including the creation of a separate list for sporting assets
Enhanced powers for community groups, allowing them to challenge refusals to list assets through the First-tier Tribunal (FTT)
Extends the moratorium period for community groups from six months to twelve months for freezing a sale to allow more time for communities to put together funding.

The reforms are expected to increase community control, improve transparency in transactions, and provide stronger protections for assets valued by local communities. However, it also brings uncertainty for asset owners and the market, especially for those who own assets that previously would not have qualified for ACV status.

7 – Security of Tenure – Changes to the 1954 Act part 2

The Law Commission consulted on the reform of Part 2 of the Landlord and Tenant Act 1954 which provides for business tenants to acquire security of tenure in the premises they occupy. The conclusions from this consultation indicate that any proposed reforms are likely to be limited in scope. It seems, rather than a wholesale replacement of the current regime, the security of tenure framework is likely to be redefined.

There will now be a second consultation on the details on the revised proposals and revised legislation is anticipated later this year and is expected to focus on the technical details of how the 1954 Act might be reformed, including potential changes to the “contracting-out” procedure and lease renewal process.

Landlords and tenants should anticipate procedural adjustments to this process rather than fundamental changes.

8 – Building Safety Act (BSA)

No doubt 2026 will be another big year for the BSA. Our top picks to look out for in 2026 are:

The Building Safety Levy

The Building Safety Levy (BSL), a new tax on the development of residential buildings designed to fund the repair of building safety defects across England, will come into effect from 1 October 2026.

If an application is submitted which falls within The Building Safety Levy (England) Regulations 2025 the applicant will be liable to pay the levy (unless exempt). The regulations will apply to major residential developments of 10 new dwellings or more or 30 new bedspaces or more regardless of whether they fall into the high risk category of the BSA and will include retirement housing, purpose-built student accommodation and mixed use schemes with residential floorspace. The BSL is a further cost developers will need to consider in their development budgets, with the amount payable dependent on the building’s size and location.

The ‘two staircase’ rule

A requirement for second staircases in all new residential buildings over 18 metres will come into force on 30 September 2026. Transitional provisions apply to schemes with a building control application made before this date, provided works are sufficiently advanced within the following 18 months, allowing the current rules to continue to apply.

Developers should review their current pipelines to assess whether existing schemes will be caught by the new rules. The new rule is likely to have viability implications, developers may need to mitigate the loss of lettable or saleable floor space due to the second staircase by increasing the height, scale or massing of a scheme.

Appeals

In 2026, the Supreme Court will hear appeals in relation to the retrospective effect of the BSA in Adriatic Land 5 Limited v. Long Leaseholders at Hippersley Point [2025] EWCA Civ 856 and Triathlon Homes LLP v. Stratford Village Partnership v. (1) Get Living Plc and (2) East Village Management Limited ]2025] EWCA Civ 846.

The Court of Appeal will also hear an appeal on the interpretation of Schedule 8 of the BSA 2022 in Almacantar v. Centre Point Nominee No. 1 Ltd and Another v. De Valk and Others [2025] UKUT 298 (LC).

9 – Biodiversity Net Gain (BNG)

BNG is built into the planning process and requires developers to show they have compensated for any loss of habitat or biodiversity caused by their developments. On 16 December 2025, the Ministry of Housing Communities and Local Government stated they would make changes to BNG.

As part of the consultation on reforming the National Planning Policy Framework (NPPF), they announced that there is likely to be reform of the following areas of BNG:

An area based exemption on the current requirements for smaller sites up to 0.2 hectares (2,000 square metres)
Consult on a possible exemption for residential development on brownfield sites up to 2.5 hectares (25,000 square metres)
Introduce measures to make the delivery of BNG offset measures simpler for medium sized developments.

The report following this consultation is likely to be published in 2026.

The Government also launched a consultation in May 2025 regarding the implementation of BNG for Nationally Significant Infrastructure Projects (NSIPs), with the current proposal that BNG will apply to all NSIPs from May 2026. This consultation report is expected to be published later in 2026.

10 – Planning and Infrastructure Act 2025

The Planning and Infrastructure Act 2025 received Royal Assent on 18 December 2025 and introduces changes to the planning landscape in England and Wales.

The Act will include the following:

Delegation in local planning decisions
Introduction of local planning fees
Introduction of spatial development strategies
Introduction of environmental delivery plans implementing the option of a nature restoration levy for developers as an alternative to environmental mitigation
Reform to development of nationally significant infrastructure projects.

The Government has stated that its aim with the Act is to ‘streamline’ development with fewer legal challenges and opportunities for judicial review. Only time will tell whether this aim is achievable.

11 – Contractual controls register

The Levelling Up and Regeneration Act 2023 introduced a framework requiring greater transparency over who owns and controls land by introducing a requirement for ‘contractual control agreements’ including option agreements, pre-emption rights and conditional contracts to be detailed in a public register.

The Government then launched a consultation on draft regulations in this regard in 2024. The Government’s response to this consultation is still awaited, but regulations and a pilot register could launch in early 2026.

As drafted this legislation will catch any written agreements over registered land which will result in the future development of that land and which last 12 months or more. Failing to comply may result in criminal consequences.

12 – Business rates

New business rates will be introduced in April 2026 with a five-tier system of multipliers (moving from the previous two tier system). The Government considered that that this new system was is designed to provide permanent business rates cuts especially for the retail, hospitality, and leisure sectors as they were provided with lower rates, funded by a higher multiplier for large properties.

The Government stated that the aim of this new system was to create “certainty”. However, in the weeks following the budget many business owners (especially those in the higher tiers of the new system) made it clear that they would be facing a significant financial cost. This is because the withdrawal of Covid pandemic reliefs has coincided with the 2026 rateable value revaluation (which some commentators report has seen a significant increase in rateable values – particularly in the hotel and hospitality sectors), compounding the impact of these multiplier changes further.

The Government has already proposed a U turn in relation to pubs. However, many commenters consider it is not just pubs that should be helped by any U turn as, the new system is having a detrimental effect on many businesses.

Summary

2026 promises to be another big year of legal change in the Real Estate sector. Our 45 strong team of Real Estate professionals has experts in all areas to help you with these changes. Click here for details of our team and their expertise. For ongoing insights into the key legal developments shaping the real estate sector in 2026, follow us on LinkedIn for our regular updates.