Real Estate: update and 2026 expectations

The previous year has been an eventful one for the commercial property sector. There are many developments to keep an eye out for in 2026 with particular impact on commercial leasing and operations. It is essential to stay ahead of the changes to avoid falling short of the new obligations.

Commercial Leasehold reform

In July 2025, we wrote about the Law Commission review of Part 2 of the Landlord and Tenant Act 1954. As set out then, it has been 20 years since any significant update to this legislation. The Law Commission Interim Statement laid out three provisional conclusions, most importantly concluding that the current contracting out model is the right and appropriate model striking a fair balance between the rights of landlords and tenants. The Law Commission stated that a second consultation will follow in due course which will focus on technical details of the proposed reforms. No timescales have been set out, so we will look out for further details throughout 2026.

The Law Commission also set out what seems to be early comments on another review relating to the law governing the maintenance and repair of commercial buildings. In the Law Commission’s view, there is scope for the law to catch up on current issues such as environmental suitability of buildings and improving on issues affecting our high streets. The focus of the review will be on the law relating to dilapidations, service charges and correlation between environmental frameworks and commercial leasehold law. We look forward to seeing further statements on this over the coming months.

Proposed ban of upwards only rent reviews

In August 2025, we wrote about a surprising proposal regarding the ban of the upwards only rent reviews. English Devolution and Community Empowerment Bill which contains the proposed changes is currently at Committee Stage in the House of Lords.

The current system of the upward only rent reviews strongly favours landlords, ensuring predictable income streams and lending valuations. With the high streets’ high level of vacancies, it is perhaps expected that the government is looking for solutions to the current state of affairs.

The Energy Performance of Buildings regime

Around this time last year, we also wrote about the government’s proposal to reform the Energy Performance of Buildings (EPB) regime . The consultation on changes to Energy Performance Certificates, Display Energy Certificates and air conditioning inspection reports closed on 26^th February 2025 and the government is reviewing the findings.

As the government remains committed to the net zero emission policy, we will watch the space for the changes that are to align the current framework with the government’s vision that the certificates and reports under review will provide property owners, landlords and tenants with a clear indication of the relative performance of their building and information on whether their buildings comply with the forthcoming legislation. Coupled with the revised minimum ratings planned by 2030, the changes to the EPB regime require careful planning ahead by commercial landlords.

The Planning and Infrastructure Act

The Planning and Infrastructure Bill, which we wrote about previously ‘Real Estate update and 2025 expectations‘ received Royal Assent on 18^th December 2025 becoming the Planning and Infrastructure Act (the ‘Act’).

The Act delivers on the government’s many objectives including delivering a faster and more certain consenting process for critical infrastructure, improving certainty and decision-making in the planning system and introducing effective new mechanisms for cross-boundary strategic planning.

As regards infrastructure, the Act provides for major changes to the Nationally Significant Infrastructure Project (NSIP) regime. National Policy Statements (NPSs) are to be updated every 5 years to take into account any legislative and government policies changes or the relevant court decisions to ensure that the NPS remains reflective of the up to date infrastructure needs. The provisions of the Act are also aimed at streamlining planning consultations through enabling shorter and more concise reports and the Planning Inspectorate being able to require corrective action on an application rather than having to request the application withdrawal or rejection as well as streamlining the judicial review process.

The Act is also to establish a new framework for spatial development strategies (‘SDS’). The adopted SDS would become part of the development plan which would guide the Local Authorities consideration of planning applications. SDS are to enable effective new mechanisms for cross-boundary strategic planning based on the system that has been developed for London over 20 years ago to ensure that planning decisions are not disjointed but instead align with broader economic and infrastructure objectives.

The new Nature Restoration Fund (NRF) is to be established under the Act which is to enable Natural England to bring forward Environmental Delivery Plans setting out conservation measures for specified types of development. A new nature restoration levy which will attach to the land is to allow developers to discharge environmental obligations whilst not hindering the developments.

Our property team can help navigate Commercial Real Estate in 2026.