If 2025 was a turbulent year for commercial property (catch Part 1 of our series), the residential sector experienced nothing short of a fundamental reset. With the Renters’ Rights Act 2025, significant leasehold reform and landmark appellate decisions on the Building Safety Act moving closer to implementation, the landscape for landlords, tenants and homeowners has shifted dramatically. This instalment of our review considers the year’s biggest reforms and their expected impact in 2026. 

The biggest shake-up in renting history?

Jessica Waters, Senior Associate

2025 has been a year of significant change for UK property, and one of the key transformations is the Renters’ Rights Act 2025. This landmark legislation, granted Royal Assent in October 2025, is being called the most radical overhaul of the private residential rented sector in decades. 

The Act aims to rebalance the relationship between the estimated 11 million residential renters and 2.3 million landlords, introducing reforms that will reshape residential renting in England. 

Among the headline changes include:

• The abolition of Section 21 “no-fault” evictions on 1 May 2026

• Fixed-term tenancies replaced with periodic assured agreements

• Stricter rent increase rules

• Decent Homes Standard extended to private rentals

Our articles Prepare to Be Spooked: What Landlords, Investors and Developers Need to Know About the Renters’ Rights Act 2025 and Ready for change? The key dates for the Renters' Rights Act 2025 you can’t afford to miss break down the details and the key dates for implementation of the Act. 

Why it matters

For residential tenants, this Act means the hope of greater security and better living standards. 

For private landlords the new legislation brings concerns about losing Section 21, slower possession routes at court, and unpredictable income with greater cost and risk.

Alongside other bold pledges such as the commitment to build 1.5 million new homes and a £39bn investment in social and affordable housing the Government calls the Act a cornerstone of its housing strategy to fix what it considers to be long-standing issues in the private rented sector such as sky-high rents, insecure tenancies, and poor standards.

Industry reaction

• Letting Agents: Some see opportunity, clearer rules, higher standards, and a chance to stand out professionally. Others fear squeezed margins, court delays and rising administration costs.

• BTR Developers: Welcome higher standards and differentiation but worry open-ended tenancies could disrupt occupancy planning and investment risk.

• Institutional Investors: Expect short-term pain and uncertainty but long-term gain and stability, betting on a more professional, transparent market.

Global perspective

International investors compare the UK reforms to similar worldwide trends noting short-term uncertainty and higher compliance costs but ultimately stabilised markets. The UK is now seen as part of a global movement to tackle housing insecurity, aligning more closely with European models that prioritise tenant security.

Final thoughts

Be prepared! Seeking early advice on the changes and how they might impact you will be critical for your long-term investment and strategy but the timeline is tight. 

From 1 May 2026, Section 21 notices will be abolished, and Assured Shorthold Tenancies (ASTs) will disappear altogether. Landlords will then have until 31 July 2026 to issue any remaining proceedings based on Section 21 in court, a deadline that only adds further pressure to an already overloaded court system. To make matters more challenging, promised digital reforms for issuing possession proceedings online are not expected to be fully operational until April 2027, leaving the sector to navigate these sweeping changes without the court capacity to properly support the extra demand. Careful planning and a proactive strategy will be essential to stay compliant and avoid costly pitfalls.

Whatever your role in the market - landlord, tenant, agent, developer, or investor one thing is clear, the Renters’ Rights Act 2025 is a game-changer, and we expect to see significantly more litigation in the new year.

Leasehold overhaul: rights, reforms and resistance

Amy Crick, Associate

The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024. The primary aim of the Act, which was formally presented by the Conservative government for the first time in November 2023, is to empower leaseholders and improve their consumer rights. This aim is to be realised via provisions that will: 

• Ban the grant of long residential leases of houses, save for certain, limited exceptions;
• Reform the law related to leasehold enfranchisement and lease extensions including via:
  • Removal of the requirement for two-year ownership before claiming a lease extension or buying the freehold of a house;
  • Increasing eligibility for collective enfranchisement where up to 50% of internal floor space is used for non-residential purposes (up from the previous 25%);
  • Entitling qualifying tenants to new leases for the unexpired term of an existing lease plus 990 years; and
  • Introduction of new valuation methods for enfranchisement and lease extensions that will result in lower premiums being payable and removal of requirements for tenants to pay some of the landlord’s costs.
• Entitle qualifying tenants with at least 150 years remaining on a lease to vary the terms to provide for a peppercorn rent on payment of a premium; and
• Increase eligibility for right to manage where internal floor space used for non-residential purposes does not exceed 50% (up from the previous 25%). 

Whilst the current government has emphasised commitment to implementing the Act and providing homeowners with greater rights, progress has been significantly delayed with the majority of provisions not yet in force. This delay is partly attributable to identification by the current government of flaws in the Act that require rectification. The Act has also been the subject of a legal challenge brought by a group of freeholders largely made up of major property investors. 

In Arc Time Freehold Income Authorised Fund and others v Secretary of State for Housing, Communities and Local Government, the Claimants sought to argue that the provisions of the Act that reform the valuation principles for calculating the premium payable when enfranchising or extending a lease, and remove the tenant’s obligation to pay the landlord’s costs, are incompatible with the European Convention on Human Rights (ECHR). More specifically, they argued that these provisions infringe their rights to protection of property under Article 1 of the First Protocol of the ECHR (A1P1). 

The High Court handed down judgment on this case in October 2025, deciding that the provisions subject to challenge are compatible with A1P1. In particular, the High Court found that addressing unfairness in the leasehold system by making enfranchisement and lease extensions cheaper and easier is a legitimate objective for the purposes of A1P1. They also found that the challenged provisions of the Act were a proportionate means of pursuing this objective and rejected arguments that charitable landlords should be exempt from the reforms. 

The impact of the decision in the Arc Time case on implementation of the Act remains to be seen. Whether or not swift action is taken to bring further provisions of the Act into force may well depend on whether the Claimants attempt to appeal the High Court’s decision. Given the size of the property interests at stake, Given the size of the property interests at stake, an application for permission to appeal may be likely.. 

Whilst further updates are awaited, leaseholders and landlords alike are encouraged to monitor implementation of the Act and consider how its provisions could impact on their investments. 

Building Safety Act 2022 in focus: What Hippersley Point means for landlords and leaseholders

Amy Crick, Associate & Chloe Fisher, Trainee Solicitor

In July this year, the Court of Appeal delivered two landmark rulings that have significant implications for the interpretation of the Building Safety Act 2022 (BSA 2022). The cases Triathlon Homes LLP v Stratford Village Development Partnership and Adriatic Land 5 Limited v Long Leaseholders of Hippersley Point were heard back-to-back by the same panel of judges. Both appeals tackled critical questions about the scope and effect of the BSA 2022, setting the stage for how its provisions will shape future building safety disputes for residential landlords and leaseholders.

In Triathlon, the Court of Appeal tackled Remediation Contribution Orders (RCO) under section 124 of the BSA 2022, upholding the First-Tier Tribunal’s (FTT) decision as to when it will be ‘just and equitable’ to impose a RCO and whether section 124 can apply retrospectively so that RCOs can be made for costs incurred prior to commencement of the relevant section of the BSA 2022. Permission has recently been granted for a partial appeal of this decision to the Supreme Court, specifically in relation to the question of whether section 124 of the BSA 2022 can apply retrospectively to costs incurred before 28 June 2022. A hearing date is currently awaited.

Hippersley Point looked at a slightly different issue, namely whether the BSA 2022 can operate to prevent a residential landlord from recovering legal and professional costs associated with relevant defects, particularly where these costs have been incurred prior to commencement of the BSA 2022. 

Background

The Hippersley Point case concerned a 10-storey mixed-use block built in 2015 and comprised of 32 residential flats and a single commercial unit. The building had structural and fire safety defects that meant remedial works were required to the fire alarm system and the external façade of the building. These works exposed leaseholders to significant service charge costs. Under section 20 of the Landlord and Tenant Act 1985 (LTA 1985), Adriatic would have had to comply with the statutory consultation requirements before carrying out any works, but Adriatic applied to the FTT for dispensation from these requirements. 

FTT decision, appeal to Upper Tribunal (Lands Chamber) and engagement of BSA 2022

The FTT granted dispensation to Adriatic on condition that they did not recover the costs of the dispensation application from the residential leaseholders through the service charge. When Adriatic sought permission to appeal from the Upper Tribunal (Lands Chamber) (UT), permission was granted and a new point was raised, namely whether paragraph 9 of Schedule 8 to the BSA 2022 (P9S8) precluded Adriatic from recovering the legal and professional costs of the dispensation application from leaseholders via the service charge.

P9S8 BSA 2022 states that “No service charge is payable under a qualifying lease in respect of legal or other professional services relating to the liability (or potential liability) of any person incurred as a result of a relevant defect.”

The UT decided that the FTT’s decision to impose the costs condition was legally wrong, but that Adriatic’s costs of the dispensation application fell within the scope of P9S8, thus meaning Adriatic was prevented from recovering these costs from leaseholders of qualifying leases (the meaning of qualifying leases is set out in s119 of the BSA 2022). This decision was made notwithstanding the fact that the relevant costs were incurred prior to the commencement of the BSA 2022 

Court of Appeal decision

Adriatic appealed the UT’s decision to the Court of Appeal, raising three key issues:

1. That costs of the dispensation application do not fall within the scope of P9S8, since a dispensation application does not “relate to” liability for a relevant defect;
2. Whether P9S8 applies to costs incurred prior to commencement of the BSA 2022; and
3. Whether retrospective application of P9S8 contravenes property rights under Article 1 of Protocol 1 of the European Convention on Human Rights (A1P1 ECHR). 

The Court of Appeal dismissed Adriatic’s appeal, ruling that:

1. P9S8 does apply to the costs of the dispensation application. The basis for this decision was a wide interpretation of when costs will “relate to” liability for relevant defects and consideration of the purpose of Schedule 8 BSA 2022, which the court accepted was to protect leaseholders and ensure those responsible for defects are held liable;
2. P9S8 does apply to relevant costs incurred prior to commencement of the Act (provided these have not been paid prior to commencement); and
3. Retrospective application of P9S8 does not violate A1P1 ECHR since the legislation pursues a legitimate public interest, is rationally connected to the objectives and falls within the state’s margin of appreciation. 

Following the Court of Appeal’s decision, Adriatic applied to the Supreme Court for permission to appeal and the Supreme Court has granted permission in relation to ground (2) above only (i.e. retrospective application of P9S8). 

Key takeaway

The judgment of the Court of Appeal in Hippersley Point reaffirms that the overarching principle of the BSA 2022 is to offer greater protection to residential leaseholders and prevent them from facing financial burdens in respect of defects for which they are not responsible. Critically, it also confirms that P9S8 can operate widely to prevent residential landlords from recovering legal and professional costs associated with liability arising as a result of relevant defects, even when those costs were incurred prior to commencement of the BSA 2022. 

Considering Hippersley Point alongside the judgment of the Court of Appeal in Triathlon, the prospect of wide ranging and retrospective application of the BSA 2022 to costs incurred before it came into force appears possible. Given the potential for these cases to shape the future of residential leaseholder protections, the outcomes of both partial appeals to the Supreme Court are awaited with anticipation. 

Taken together, the Renters’ Rights Act and the Leasehold and Freehold Reform Act and this year’s key Building Safety Act decisions represent the most sweeping changes to residential renting and homeownership in a generation. With implementation timetables still evolving, 2026 will require careful navigation. In Part 3 of our review, we explore the implications for developers — from rights of light to the growing prominence of commonhold.

To discuss how any of this year’s developments may impact your position, please get in touch with a member of our property disputes team.