UK Real Estate Round Up July 2026

Training

Our PROPcast series continued in July with Episode 6 when our subject was “The End of Retentions – Preparing for the Commercial Payments Bill”. The Government’s newly published Commercial Payments Bill marks a watershed moment for the UK construction industry. With a phased ban on retention payments, tighter final payment deadlines and significant changes to payment mechanisms, the legislation is set to fundamentally reshape how parties manage cash flow, risk and security in construction contracts. In this PROPcast, Lauren Morrison and Josh Curry from our Construction team unpacked the key provisions of the Bill, explored the practical implications for the industry and shared proactive strategies to help you navigate and prepare for this evolving landscape. You can listen back here. 

PROPcast takes a summer break in August – we will be back in September, and you can sign up for updates here.

Legal Updates

Building Safety Act 2022

“Higher risk building” in England: 18m or seven+ storeys high and two or more residential units
“Higher risk building” in Wales (for design and construction only): 18m or seven+ storeys high and one or more residential units
“Relevant building” in England: 11m or five+ storeys high and two or more dwellings

New draft regulations amend Building Safety Levy Regulations

The Building Safety Levy (Amendment) (England) Regulations 2026 are proposed to clarify how the original Building Safety Levy regulations treat previously developed land for the building safety levy.  The original regulations provide for a lower levy sum to be payable for “previously developed” sites, and a site is previously developed if at least 75% of the land is previously developed. The new regulations clarify that wholly underground buildings and unlawful developments, are excluded from the 75% calculation, and confirm that permanent man-made structures, surfaced areas, plant and machinery can be in scope. The regulations also correct and refine some provisions around the administration of the levy, including service of notices and certificates. The intention is for these provisions to come into force on 1 October 2026, when the Levy comes into force. Further guidance here: Building Safety Levy: Guidance - Guidance - GOV.UK

• modifying the risk-based approach, initially concentrating on organisations responsible for multiple HRBs
• carrying out sample interventions based on risk or intelligence about buildings, organisations or duty holders
• granting smaller, volunteer-run resident management companies more time to prepare their evidence
• supporting applicants whose applications are being processed, as well as those who were previously refused and given building safety actions to complete before reassessment

Contract

Deposit or Penalty? 

It is generally accepted that a high deposit which could be lost in the case of non-completion could be construed as being a penalty leaving a seller unable to keep even the usual 10%. The penalty rule generally focuses on whether the provision imposes a detriment out of all proportion to any legitimate interest in performance. In Amaal Ventures Ltd v Eros Ltd [2026] EWHC 870 (Ch), applying that approach in the context of a high-value off-plan transaction, the court regarded additional stage payments as a commercially justified form of performance security rather than an extravagant or disproportionate sanction for breach. In that case the buyer was a “commercial” buyer of a number of apartments intended for renting out.  The case is an important reminder to consider carefully the facts in each case when considering whether a deposit could be considered a penalty.

Land Law

Roxlena Ltd v The Ramblers' Association & Ors, R (On the Application Of) {2026} EWCA Civ 534

The Court of Appeal considered the meaning of the phrase “actually enjoyed by the public as of right and without interruption for a full period of 20 years" in s.31 Highways Act 1981, which provides that where a way has been so used by the public, it is presumed to be dedicated as a highway. The issue in this case was that there had been a break in public use during a foot & mouth outbreak. The appellant, Roxlena, argued that this meant that the 20 year period of enjoyment had not been established. The Court of Appeal disagreed. The decision emphasises that a short period of non-use is not automatically fatal to a s.31 claim; the focus is on whether the public's use, viewed as a whole, demonstrates continuous assertion of the claimed right over the relevant 20‑year period.

Land Registry

HM Land Registry's customer newsletter – July 2026

Practice and Process July 2026

Landlord and Tenant

Landlord’s insurance commission case – appeal settled out of court

The landlord’s appeal in the case of London Trocadero v Picturehouse Cinemas, was due to be heard by the Court of Appeal in June, but the parties reached a confidential settlement out of court.  So, we won’t get to find out what the Court of Appeal’s view would have been on the landlord’s approach to insurance commissions, and the High Court decision stands.  In general terms, an element of commission is standard and acceptable in the insurance market as payment to the broker for the work done in arranging the insurance cover, so it is only lease drafting or behaviours that go outside this norm that are likely to be open to  criticism. The court in this case had found that landlord was, during some of the years in dispute, setting the amount of commission it wanted to receive at a very high level and asking the insurers to work backwards from that, which did result in significantly higher insurance rents for the tenants (because the premium was increased commensurately with the level of commission paid).

Renters' Rights Act 2025 – unintended right of first refusal exposure for PBSA 

Private purpose-built student accommodation ("PBSA") meeting the relevant criteria is exempt from the assured tenancy framework under the RRA, allowing landlords to grant students common law tenancies with fixed terms aligned to the academic year, with rent payable in advance. Pre-RRA, most PBSA tenancies were ASTs (or, since 1 May 2026, assured periodic tenancies), so tenants were not "qualifying tenants" for the purposes of the right of first refusal under the Landlord and Tenant Act 1987 ("1987 Act"). New PBSA tenancies granted post-1 May 2026 are common law tenancies rather than assured tenancies, meaning those tenants may now qualify for the right of first refusal. This could have the practical effect that a disposal of PBSA that would previously have fallen outside the 1987 Act may now be caught, triggering an obligation to first offer the disposal to qualifying tenants.

It might be that units within PBSA do not fit the Act’s definition of “flat” (bed-sits with communal kitchens/bathrooms are unlikely to qualify as self-contained flats) but pending government intervention to fix the issue (which happened quickly to exclude Welsh occupation contracts from having 1987 Act rights) it is an issue which should be considered on every PBSA disposal.

Mortgagee in possession treated as a landlord for the purposes of residential tenancy legislation in Wales

A mortgagee who goes into possession of a tenanted property in Wales will be treated as a “landlord” for the purposes of both the Renting Homes (Wales) Act 2016 and the Housing (Wales) Act 2014, and must comply with landlord registration and licensing requirements. The High Court in: Kensington Mortgage Company Ltd v Price and others [2026] EWHC 1577 (Ch) (29 June 2026) has confirmed that a mortgagee who goes into possession of a tenanted residential property in Wales will be treated as a “landlord” for the purposes of both the Renting Homes (Wales) Act 2016 and the Housing (Wales) Act 2014, and must therefore comply with Rent Smart Wales registration and licensing requirements.

The lender sought to distinguish the two statutory regimes, arguing it could be a landlord under the 2016 Act (so as to serve a section 173 notice) without being a landlord under the 2014 Act and therefore without needing to register or be licensed. The court rejected that approach. It held that, while the mortgagor remains the landlord in the ordinary course, a mortgagee becomes the landlord only on taking possession, at which point it displaces the mortgagor and assumes the role of “immediate landlord” across both regimes. The statutory grace periods for new landlords do not apply because a mortgagee in possession does not acquire its interest by assignment.  On the facts, the lender had not yet gone into possession: where a tenancy binds the mortgagee, possession requires asserting control over the tenancy, typically by directing tenants to pay rent to the mortgagee. Issuing possession proceedings alone was insufficient. The court also rejected an A1P1 challenge, noting that a mortgagee in possession assumes both the rights and regulatory burdens of a landlord.  There was no good reason why it should not be subject to the regulatory requirements imposed on other landlords.

Updated right to rent codes of practice

The Home Office and UK Visas and Immigration have added updated versions of two codes of practice under the residential right to rent scheme, both of which come into force on 1 October 2026. The updated codes cover the right to rent scheme for landlords and their agents and the avoidance of unlawful discrimination when conducting right to rent checks in the private rented residential sector. The codes provide guidance for landlords, homeowners and letting agents affected by right to rent immigration checks. The updated codes can be accessed here: Right to rent immigration checks: landlords' code of practice - GOV.UK

New Tenant Fees Act 2019 guidance 

Guidance has been updated in respect of guarantor agreements which were entered into before May 2026 where the Renters’ Rights Act 2026 may have an impact. There is separate guidance for landlords and for tenants.

Consultation on exemption from ground rent cap for “quid pro quo” leases

The Commonhold and Leasehold Reform Bill is expected to cap ground rents at £250 per year for most existing residential long leases, with those ground rents eventually reducing to a peppercorn 40 years. The government is now considering a narrow exemption to this policy for ‘quid pro quo’ leases – where a higher ground rent is agreed between the leaseholder and freeholder for a corresponding reduction in premium and has launched a consultation seeking views and technical feedback on whether there should be an exemption and, if so, how it should be defined and how it should work. The consultation is open until 27 August and can be accessed here: Quid pro quo leases and the ground rent cap - GOV.UK

New consultations – residential long leases

The government has launched a consultation seeking views on prescribing the valuation rates used in leasehold enfranchisement claims under the Leasehold and Freehold Reform Act 2024 (LFRA).  LFRA will set a standard valuation method for calculating how much a leaseholder must pay to buy the freehold, extend their lease or buy out the ground rent. Leasehold enfranchisement valuation rates - GOV.UK  It is also consulting on the costs of the leasehold enfranchisement process - Leasehold enfranchisement process costs - GOV.UK. Both consultations close on 23 September 2026.

Planning

MHCLG Consultation: Time-Limited CIL Relief in London

• MHCLG has published draft regulations proposing a temporary relief from borough-level CIL for qualifying residential developments in Greater London, aimed at improving viability for stalled housing schemes.
• The relief would apply only to eligible residential developments on non-excluded land and the consultation seeks views on the precise scope of qualifying developments and land categories. 
• Enhanced relief is proposed for schemes delivering higher levels of affordable housing, with the consultation inviting views on the appropriate thresholds and levels of relief. 
• Developers seeking to claim relief will need to provide viability evidence and statutory declarations; the government proposes simplified evidence requirements compared with the earlier 2025 consultation.
• The draft regulations include provisions for claims, verification, monitoring and clawback arrangements, with consequential amendments to the CIL Regulations 2010.
• The proposed commencement deadline for eligible developments is 31 March 2030; the consultation closes on 18 September 2026.

Articles & Publications

The Summer 2026 edition of our Real Estate Deal Sheet has been published, sharing some of the standout transactions we have advised on this quarter. Read more here: Deal Alert

We are delighted to have been shortlisted for Law Firm of the Year at the Estates Gazette awards for our work on a deal with Westminster City Council, funding the refurbishment of thousands of social housing units, led by Richard Lampert in our London team.

Our Real Estate Disputes team have published the Summer edition of their InFocus magazine. You can read it here: InFocus Summer 2026 | Newsletter

Our Real Estate Disputes team have also published a number of Lawbites this month:

• An article on a dispute involving rules governing a shared housing development in Scotland - Building Barriers – a Scottish neighbour dispute
• Sections 33-35 of the Renters’ Rights Act 2025 introduces targeted anti-discrimination protections for private renters in England. These provisions, which are already in force, prohibit landlords and letting agents from excluding prospective tenants because they have children or receive benefits, and render certain discriminatory tenancy terms ineffective. These protections against discrimination also extend to some extent to private rented properties in Wales. Read more here: Renters’ Rights Act 2025: Turning the Spotlight on Lettings Discrimination/ LinkedIn
• The Law Commission’s planned review of agricultural tenancies law as part of its 14th Programme of Law Reform. Read more here: Lawbite: Agricultural tenancies: sowing the seeds of reform / LinkedIn.
• On the consultation outcome Improving proportionality and safety outcomes in building control: telecommunications work - government response. This publication, together with the Directions published on 9 July, confirm that on and from 1 September 2026 certain telecommunications works in England will face a lighter-touch building control regime. Specified fibre-optic cabling works will not require prior building control approval, and procedural requirements will be dispensed with for certain rooftop mobile communication mast works on buildings within the scope of the higher-risk building regime under the Building Safety Act 2022 for Gateway two only. Gateway three requirements will remain. Read more here: Lawbite: Connecting Buildings Faster: Government Eases Telecoms Controls / LinkedIn.
• On Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 1354 (TCC), where the High Court held that the landlord was responsible for remedying dangerous ACM cladding at a 16-storey hotel under the terms of the lease. The decision is significant because, despite hotels falling outside the Building Safety Act’s leaseholder protection regime, it demonstrates that traditional landlord and tenant covenants can still provide an effective route for allocating and enforcing responsibility for building safety remediation. Read more here: Lawbite: Building Safety Beyond the BSA — Hotel Landlord Ordered to Replace Dangerous ACM Cladding / LinkedIn.
• The decision in Secretary of State for Housing, Communities and Local Government v (1) EDR Builders Limited (2) Hollybrook (UK) Limited LON/00BB/BSB/2024/0011, where the FTT ordered a developer's associated company to pay almost £3.7 million towards the cost of remedying fire safety defects at a London residential development. The decision is significant because it develops our understanding of remediation contribution order ("RCO") applications under s.124 of the Building Safety Act 2022, including whether remedial works can be challenged as unnecessarily expensive and whether litigation costs can be recovered in such applications. It’s also notable as it is the first successful RCO application brought by the government to recover Building Safety Fund expenditure. Read more here: The FTT orders £3.7 million remediation contribution order in the Hallings Wharf decision / LinkedIn.

Telescope Report

The latest Telescope report: “Building the digital infrastructure of tomorrow: market, regulatory and delivery trends shaping data centers” available here: Home - Telescope – Data center legal trends 2026 introduced by Mark Chester, and including a spotlight on our German data centres team, power and site selection, investment priorities and regulatory updates.

Defence Investment Plan

The Defence Investment Plan was published at the start of July, alongside an announcement from the PM that some capital projects, e.g road and energy projects, “will no longer go ahead as planned”. In their latest briefing, our Energy team have taken a look at what this means for the energy sector.

LinkedIn
UK’s Defence Investment Plan diverts funds from energy projects 

FCA consultation article

An article from our Financial Services team on an FCA consultation proposing changes in response to concerns that depositaries may cease offering services to authorised AIFs investing in certain private market assets, due to depositaries of certain AIFs being increasingly unwilling to hold legal title to real estate assets because of ancillary liability risks, particularly under the Building Safety Act 2022 - UK: FCA consults on fund asset registration in CP26/16