For developers, 2025 delivered a series of influential decisions and policy commitments that will shape future schemes. From landmark rights of light guidance to the government’s renewed interest in commonhold, this final part of our review examines key risks and opportunities for those planning or delivering development projects. 
 

The Bankside rights of light case: What it means for developers and property owners

Caroline DeLaney, Partner

It is rare that disputes relating to rights of light make it to the courts. It is even rarer to have such wide-ranging consideration as that contained in June’s High Court decision in Cooper v Ludgate House Ltd; Powell v Ludgate House Ltd [2025] EWHC 1724 (Ch). This makes it a significant case, not because it reflects a marked change of direction, but rather because it provides detailed judicial guidance on rights of light claims and insight on how the courts seek to balance private rights against redevelopment schemes.

Rights of light

Rights of light are complex and cannot be explained properly within the constraints of this piece, but in essence are easements that give owners rights to the access of a minimum amount of light through defined apertures – usually windows, skylights and glass doors.  If that light is blocked by development, it potentially entitles the owners to an injunction requiring the demolition or cut-back of that development, alternatively to damages.

The background

The claimants were the owners of two leasehold flats in Bankside Lofts near the Tate Modern gallery. The defendant developers were constructing Bankside Yards, a development of a number of high-rise blocks including an office block known as Arbor.

The developers had previously accepted that Bankside Yards would significantly interfere with the light of its neighbours and had offered financial compensation. Some owners had accepted these offers, some had not. 

The developers had sought to protect the development against action by the remaining owners by engaging the London Borough of Southwark to use its statutory powers under section 203 of the Housing and Planning Act 2016. This allows development notwithstanding interference with property rights by converting an affected owner’s claim into compensation. In circumstances peculiar to this case, this section 203 protection did not extend to Arbor as it had already been constructed.

The claimants sought an injunction requiring the demolition of substantial parts of Arbor due to interference with their rights of light, alternatively damages in lieu of an injunction.

It is a challenge distilling Mr Justice Fancourt’s 86-page judgment into a number of key points, and every aspect is not covered, but here goes:

Key points

• Injunctions vs damages: Injunctions are not necessarily to be preferred and detailed assessment of the parties’ respective positions is required on a case-by-case basis.  Here the court refused to grant an injunction, awarding damages instead. This is a pragmatic approach: where developers act transparently and public interest is strong, financial compensation is more likely than cutting back construction.
• Technical assessment methods are evolving: The court reaffirmed the use of the Waldram method of assessing interference with light even though it was devised in the 1920s but acknowledged the existence of modern techniques like Radiance analysis and BRE guidance. Although these were rejected as currently less reliable and subjective, it is acknowledged that there is likely be a gradual shift toward more sophisticated light assessments as they continue to evolve.
• Damages based on hypothetical negotiation/developers’ profit are to be preferred: Rather than calculating loss by reference to property value reduction and the application of a multiplier, the court adopted the “hypothetical negotiation” model position, that is what the developer might reasonably have paid to settle the claim prior to construction.  Although falling short of ransom, this basis involves an element of profit share which generally results in higher awards - at least in profitable schemes.  In this case the damages awarded were £350,000 and £500,00 respectively. This sets a clearer precedent for compensation assessment in future disputes.
• There is a role for Section 203 Housing and Planning Act 2016: The judgment clarified how councils are able to override easements using this statutory mechanism, barring injunctions as a remedy for affected owners and converting them to compensation based on diminution in value alone (not profit share). The rules are complex, but the mechanism can play a crucial role for developers planning major schemes.

Practical implications

For developers: 

• Early assessment of the rights of light impact in a scheme and realistic assessment of risk should be a key element in development planning. Engagement of affected neighbours and transparency are key elements. Courts are less likely to grant injunctions if you act in good faith.
• Even if the threat of demolition or cut-back may be reduced, the quantum of damages based on a hypothetical negotiation/profit share model may be significant.
• Develop a robust rights of light strategy early on which should include consideration of the potential role for the local authority in supporting the schemes.

For property owners: 

• Rights of light remain enforceable, but remedies may lean toward financial compensation rather than demolition.
• Even in the absence of an injunction damages may be significant.
• The combination of potentially significant compensation and the focus on proactive engagement by developers mean that the protection of these rights should not be overlooked.

The clarification of this case is welcome but serves to emphasise the complexity of this area of law and its increasing role in urban developments. The need for early specialist input for both developers and property owners alike remains key.

Ownership reimagined: Will Commonhold reshape tomorrow’s developments?

Stephanie Newton, Senior Associate 

In March this year the government stated that it intends to make Commonhold the standard model of tenure by the end of this Parliament. This change means that developments currently proposed or under construction may be sold as commonhold units, rather than traditional leaseholds, which could alter the planning and sales strategies of those developments. 

Commonhold is a form of property ownership where each unit (typically a flat) is owned outright, and all owners collectively manage the building through a Commonhold Association. There’s no freeholder, no ground rent, and no lease expiry. 

The proposed reforms envisage Commonhold making block management more democratic and putting unit holders at the centre of decision making for the blocks they live in. Commonhold will abolish the threat of forfeiture for long leaseholders and give back control over building maintenance, budgets and fire safety. The new reformed Commonhold is expected to be suitable for a wider range of developments, including mixed-use projects.

The property industry should be ready to respond to changes, and although proposals are in their infancy, a commitment is stated to making commonhold the standard model in the future. Housebuilders will need to give thought to how to structure their developments to best provide for the Commonhold model and stay informed of legislative changes. 

The reforms also include bold ambition to convert existing leaseholds into Commonhold, which could have significant implications for investor landlords. There is little detail on how such a scheme would work, and how landlords might be compensated, but the changes, if brought forward, could have the potential to impact on asset values.

As 2025 draws to a close, developers face a legal environment that is both more complex and more clearly defined. Rights of light strategy and the possibility of a future dominated by commonhold will all influence development planning in 2026 and beyond. Staying ahead of these shifting requirements will be essential — and early, specialist advice remains key. 

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.

Catch up on the series:

• Part 1 - Commercial property
• Part 2 - Residential property