On the horizon - Summer 2025

On the horizon

In the latest edition of his quarterly column for Estates Gazette, Bill Chandler previews some of the most significant legal developments affecting real estate expected in the coming weeks and months.

Summer is here. Several official heatwaves have prompted a series of amber heat-health alerts and the inevitable hosepipe bans. But what does the summer season hold in store for real estate law?

Summer holiday

The Renters’ Rights Bill remains the star attraction. The Bill completed its passage through the House of Lords on 21 July, but that did not leave enough time for the Bill to be ratified by the House of Commons and receive Royal Assent before the summer recess. The consideration of the Lords’ amendments by the House of Commons will have to wait until Parliament reconvenes in September.

But even when the Bill is passed, very little will actually change immediately.

Once passed, a small number of mostly administrative provisions will take immediate effect. Another batch of provisions will then go live two months after Royal Assent. This includes the welcome removal of the trap whereby long residential leases can currently become assured tenancies – and therefore vulnerable to the mandatory possession grounds in the Housing Act 1988 – if the ground rent exceeds £1,000 per annum in London and £250 per annum elsewhere. The Bill will exclude existing leases longer than seven years and new leases longer than 21 years from the assured tenancy regime.

The blockbuster provisions of the Bill will however require implementation regulations. Hopefully a timetable for implementation will follow once the Bill becomes law. The abolition of assured shorthold tenancies (ASTs) and ‘no fault’ eviction under section 21 of the Housing Act 1988 is perhaps now looking unlikely to happen in this calendar year.

Back to school

One area to keep a particular eye on is student accommodation. The quest to protect residential tenants by banning fixed term tenancies does not sit easily with a sector that needs to know that one year’s occupants will have vacated by the time the next year’s students roll in.

The Renters’ Rights Bill addresses that concern by introducing new ground 4A into the Housing Act 1988, allowing landlords to obtain possession of student properties at the appropriate time. Ground 4A may be limited to houses in multiple occupation (HMOs), depending on the outcome of the House of Lords’ amendment to remove this restriction. Ground 4A also attempts to rewrite the student letting market, by applying only to tenancies granted up to six months in advance.

Providers of Purpose Built Student Accommodation (PBSA) should be fine in the long term. The government has confirmed that PBSA will be exempted from the assured tenancy regime, provided they have signed up to a government-approved code of practice. However, the suggestion that only new tenancies will be exempted risks creating precisely the sort of two-tier market in the student sector that the government has been so keen to avoid in the wider housing market.

Tenancies for academic year 2024/25 have largely now disappeared in the time-honoured way, but 2025/26 is a potentially problematic transitional year for both PBSA and traditional student housing. Tenancies will largely have been granted as ASTs, but risk being converted into periodic assured tenancies mid-year when the relevant provisions of the Renters’ Rights Bill come into force – and in many cases without the protection of ground 4A, perhaps because the tenancy was granted too early in the previous academic year, or because it isn’t an HMO (if that condition survives). 

Student landlords will face an interesting dilemma when the autumn term begins. With the new regime unlikely to be in place, will PBSA providers wait for exempt status rather than granting tenancies for 2026/27 that could morph into periodic assured tenancies? And will providers of traditional student housing be prepared to wait until 2026 before granting tenancies for 2026/27, in the hope of being able to rely on ground 4A?

And of course there is still time for further changes, whether through the Bill itself or secondary legislation.

What goes up

The English Devolution and Community Empowerment Bill, which was introduced to Parliament on 10 July 2025 for its first reading, contains a surprise bombshell for business tenancies.

The Bill contains provisions (to be inserted into the Landlord and Tenant Act 1954) banning upwards only rent reviews in new commercial leases. This will apply regardless of whether the rent review is based on open market rent, index-linked or turnover.

Similar provisions will apply to setting the initial rent for a lease granted pursuant to a put option under which a tenant can be required to take a new lease (but not, apparently, where the tenant has an option to renew).

The Bill also gives tenants the power to trigger a rent review (and take other action to make the rent review happen) where the lease does not allow the tenant to do so.

Those of us of a certain vintage will recall previous attempts to ban upwards-only rent reviews, so it is by no means certain that this will happen, but it is certainly something to keep an eye on when the Bill returns to Parliament in September.

Time flies

When precisely does it stop being ‘early in 2025’?

The government’s December 2024 response to the Climate Change Committee’s progress report promised that we would finally receive a response to the 2021 consultation on the Minimum Energy Efficiency Standard for commercial properties ‘early in 2025’. We are now more than halfway through the year and the commercial real estate sector is still waiting to learn exactly what will be required of it and when.

We can however expect to hear more about MEES for privately rented homes, following the recent consultation that closed in May and which proposed increasing the minimum standard to EPC ‘C’ for new tenancies from 2028 and all tenancies from 2030 (and with an increased cost cap of £15,000 per property).

And we also have the proposed reform of Energy Performance Certificates (which underpin the MEES regime), which is scheduled for 2026.

Business (tenancies) as usual

The Law Commission’s interim statement on 4 June set out their ‘provisional conclusion’ that the current business tenancy regime under the Landlord and Tenant Act 1954 should be retained. Business tenants should continue to enjoy security of tenure and renewal rights, unless they specifically ‘contract out’ of those statutory protections.

The only significant change proposed is to extend the existing exclusion of tenancies not exceeding six months, to raise the threshold to two years.

Whilst no timescale has yet been set, the second part of the consultation will consider how the existing regime could be improved. As well as addressing perceived issues with the lease renewal process, hopefully this will also culminate in the streamlining and derisking of the contracting out procedure.

We should also see the outcome of the consultation on implementing the changes to the 1954 Act effected by the Product Security and Telecommunications Infrastructure Act 2022. Those changes will see lease renewals under the 1954 Act valued on the same basis as under the Electronic Communications Code where the primary purpose of the tenancy is to confer Code rights. The government expects to publish its response later this year and bring the relevant provisions into force shortly after.

Separately, the Law Commission launched a consultation in July on reforming chancel repair liability, which runs until 15 November 2025. Whilst the proposals stop short of abolishing chancel repair liability altogether, they seek to remove the uncertainty that has persisted since chancel repair liability lost ‘overriding interest’ status in 2013 - by clarifying (and with retrospective effect) that a purchaser cannot be bound by chancel repair liability unless it is protected by notice on the title.

Coming soon

The consultation and draft Leasehold and Commonhold Reform Bill promised in the recent Commonhold White Paper are expected in the second half of the year, together with further implementation of the Leasehold and Freehold Reform Act 2024.

Following the controversy over the fifth edition of the TA6 Property Information Form for residential conveyancing, the Law Society expects to launch the new sixth edition in October. It will become mandatory for Conveyancing Quality Scheme members from March 2026.

And in October all eyes will be back on the Chancellor for the autumn budget.

Beyond the horizon

Other things to look out for later this year and in 2026 include:

• Planning – expect progress with the Planning and Infrastructure Bill and the various consultations and policy papers on issues such as housebuilding and biodiversity net gain (BNG). The government is proposing to introduce BNG for nationally significant infrastructure projects from May 2026, whilst consulting separately on improving the BNG regime for minor, medium and brownfield development.

• Contractual controls – Part 11 of the Levelling-up and Regeneration Act 2023 provides for a register of third party controls over land, such as conditional contracts and option agreements. The government’s May policy paper ‘Speeding up build out’ confirms its intention to make contractual control agreements ‘more transparent’, while a March letter from the minister to the Land Registry suggested the register will launch in 2026.

• High Street Rental Auctions – although several local authorities are at varying points in the process of designating qualifying areas, it seems we still have a while to wait until we actually see a council-run auction of vacant high street premises under the statutory procedure introduced in December 2024.

• Building Safety Act – expected developments in this wide-ranging area include progress on the Remediation Acceleration Plan launched in December 2024 (and the July 2025 update) and the implications of the judgments from the Court of Appeal in Triathlon Homes LLP -v- Stratford Village Development Partnership & others [2024] UKFTT 26 (PC) and Adriatic Land 5 Ltd -v- Long Leaseholders at Hippersley Point [2023] UKUT 271 (LC). The Building Safety Levy is not now expected until autumn 2026.

An earlier version of this article appeared in Estates Gazette.