Gemma Cook
- Knowledge Director
- Real Estate
Quarterly in Advance: Commercial Real Estate – What is on the Horizon?
Autumn has arrived, bringing the familiar sense of a fresh start. For commercial real estate, the next few months are unusually busy, with reforms affecting development costs, building safety, leasing strategy, property management and residential portfolios. In this edition, Gemma Cook looks at what clients should have on their radar now, what is coming next, and what may shape longer-term planning.
If any of the matters raised in this summary could affect your investment, occupation or development strategy, please speak to your usual contact in the team.
In this edition, we have indicated a red, amber and green rating to indicate those topics which may need more imminent consideration:
- Red: action or review likely needed now.
- Amber: monitor and prepare over the next 6 to 12 months.
- Green: longer-term horizon, keep under review.
Overall summary
- Developers should factor the Building Safety Levy and second staircase requirements into viability, timing and procurement.
- Landlords and asset managers should monitor Martyn’s Law, MEES and insurance commission developments.
- Residential investors and managers should prepare for landlord registration and continuing building safety reform.
- Deal teams should keep contractual control registration and possible rent review reform in mind when structuring transactions.
Building Safety Levy: 1 October 2026
The Building Safety Levy is a new levy that applies when a developer seeks permission to develop certain residential buildings, regardless of height, in England. It comes into effect on 1 October 2026. The levy is linked to building control applications and:
- Transitional arrangements mean that some applications made before 1 October 2026 are outside the regime;
- Developers will need to build the levy into cost planning and viability appraisals; and
- Purchasers and funders will increasingly expect evidence that building control and levy requirements have been properly addressed.
For further detail, please see our article: Are you ready for the Building Safety Levy?
Building Safety (Wales) Act 2026 (“BSWA”)
The BSWA has been enacted and establishes a new building safety regime in Wales, from:
- 1 July 2026, in relation to Welsh building regulations which introduced statutory duty holder roles, competence requirements, and procedures for higher-risk buildings during the design and construction phase; and
- Expected from 2027, for the occupation phase regime and ongoing safety management for existing multi-occupied residential buildings, with the exact commencement date to be determined by secondary legislation.
The Welsh regime is likely to catch more buildings than the equivalent English occupation-phase regime (contained in Part 4 of the Building Safety Act 2022 (“BSA”)). Some key differences between the BSA and the BSWA are:
|
|
BSA (Part 4) |
BSWA |
|---|---|---|
|
Nature of the building |
Applies to “higher-risk buildings” (“HRB”), which are buildings that are at least 18 metres high or have at least 7 storeys and contain 2 or more residential units. |
Applies to all buildings with 2 or more residential units (subject to narrow exceptions). It divides buildings into three categories, with different duties applying to each category of building. Category 1: at least 18 metres in height or has at least seven storeys. Category 2: at least 11 metres, but less than 18 metres in height and comprises five or six storeys. Category 3: less than 11 metres in height and comprises fewer than five storeys. |
|
Nature of risk |
Focuses on “building safety risks”, which are risks to the safety of people in or about a building arising from (a) the spread of fire or (b) structural failure in an HRB. |
Has provisions relating to structural safety risks and fire safety risks. The fire safety risks apply to all three categories of building. |
|
Registration |
Only required if a building is an HRB. |
Applies to Category 1 and Category 2 buildings and allows scope for other requirements to be extended in the future. |
|
Responsibility for enforcement |
Lies with the Building Safety Regulator. |
Either the local authority or the fire and risk authority depending on the nature of the obligation. |
Terrorism (Protection of Premises) Act
More commonly referred to as Martyn’s Law, the Terrorism (Protection of Premises) Act will impose obligations aimed at strengthening the security of public premises and events. Government guidance and further regulations have been released by the government to help those with premises caught by the Act to prepare ahead of the Act coming into force no earlier than April 2027.
Those responsible for certain premises, including shops, restaurants and galleries, and events will need to consider how they would respond to a terrorist attack. Larger premises and events are subject to further obligations to reduce vulnerability to terrorist attacks. The regulations, which come into force on 15 October 2026, set out the rules for determining the principal use of premises where premises are used for two or more purposes. The regulations provide that the principal use is the use which relates most closely to the purpose and nature of the premises, taking account of matters such as whether the premises were built or modified for a particular use, whether that use continues, the physical characteristics of the premises and how the premises are treated by a local authority. Please get in touch if you would like to discuss how the Act applies to your assets.
A new national landlord registration scheme for the PRS
The latest element of the reform of the private rented sector under the Renters’ Rights Act 2025 is a new register for residential landlords in England. The register is intended to provide additional protection for tenants and help responsible landlords distinguish themselves from rogue operators who fail to meet required standards.
There will be a phased regional rollout, beginning with the West Midlands on 15 December 2026, before extending across the rest of England over the following 12 months and reaching London on 15 July 2027. Registration will become mandatory as the scheme is introduced in each region. For further information, please refer to: Attention landlords: the new national property database is coming.
Still to come
With so many areas of reform on the agenda, it can be tricky to keep track. Here is our ready reckoner of the state of play for the reform of the commercial real estate sector. This table is intended as a quick reference guide rather than a detailed legal analysis.
Theme |
Legal Point |
Timing |
|---|---|---|
Deal structures |
||
|
Contractual controls register |
New registration requirements for relevant options, pre-emption agreements and conditional contracts. (Transitional arrangements apply from 8 June 2026 to 6 October 2027.) |
8 June 2026. |
Commercial leases |
||
|
Upwards only rent reviews |
Whilst the English Devolution and Community Empowerment Act 2026 has passed, the ban is not yet in force. New leases completed before commencement are not generally caught, but there is an important retrospective feature for some renewal arrangements, options and agreements entered into on or after 17 March 2026 with existing tenants. |
Commencement date awaited, leaving uncertainty on rent assumptions, valuation, pricing, option strategy and renewal negotiations. |
|
MEES |
The government’s proposal for an EPC of B for larger non-domestic buildings is not yet in force and requires further legislation to bring it into effect. But landlords and tenants should treat energy performance as part of ordinary asset management, not a point to revisit only at letting or sale. Political and fiscal priorities may affect the final shape and timing of reform. The uncertainty continues to impact capital expenditure, letting strategy and finance and asset value. |
From 2031 it is thought the EPC of B will apply for larger non-domestic buildings. |
|
Commercial leasehold reform |
The Law Commission’s consultations considered the Landlord and Tenant Act 1954, the Landlord and Tenant (Covenants) Act 1995 and the Landlord and Tenant Act 1987. These could bring in changes to tenant renewal rights, tenant liability and rights of first refusal. |
Closed 16 September 2026. Final reports and recommendations are awaited. |
Property management |
||
|
Martyn’s Law |
The Terrorism (Protection of Premises) Act 2025 is expected to come into full effect. |
No earlier than April 2027 but preparation should be underway now. |
|
Leaseholder Remediation (Building Safety) Bill |
The bill proposes strengthened protections for residential leaseholders affected by building safety defects by requiring building owners to take responsibility for remediation works and complete them within prescribed timescales. |
The Committee stage, which is the line by line examination of the draft bill, is yet to have a date scheduled. |
|
Insurance commissions in leases |
London Trocadero (2015) LLP v Picturehouse Cinemas Ltd settled before the Court of Appeal hearing. In the absence of any further comment from the government, landlords should continue to check policy placement, commission arrangements and lease recovery wording whilst we wait for any potential new legislation on the point. |
The Law Commission’s consultation on introducing permitted insurance fees for landlords closed in July 2025 and indicated widespread leaseholder concerns. |
|
Chancel repair |
The project aims to ensure that chancel repair liability does not bind purchasers of land unless it is registered. |
The consultation closed on 15 November 2025. |
Building safety |
||
|
Second staircase |
The requirements for a second staircase for new residential buildings in England that are over 18 metres in height. Transitional arrangements mean that projects that receive building regulations approval before 30 September 2026 and are “sufficiently progressed” by 30 March 2028 can proceed without a second staircase. |
30 September 2026. |
|
Building Safety Levy |
The levy regime is due to apply to relevant building control applications in England, subject to transitional provisions. |
1 October 2026. |
|
Building safety case law |
Three building safety appeals are progressing through the appellate courts and may affect who ultimately bears remediation, service charge and professional cost liabilities. Almacantar Centre Point Nominee No.1 Ltd v De Valk Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point Triathlon Homes LLP v Stratford Village Development Partnership |
Autumn 2026.
|
|
Vulnerable people |
The Fire Safety (Residential Evacuation Plans) (England) Regulations 2025 mandate the use and review of Residential Personal Emergency Evacuation Plans (“PEEPs“) for residents with disabilities or impairments in buildings containing 2 or more domestic premises which are: · At least 18 metres/contain 7 storeys; or · More than 11 metres in height and have a simultaneous evacuation strategy. These plans will identify equipment and adjustments to aid their fire safety and evacuation. |
6 April 2026. |
|
Remediation Bill |
The proposed Remediation Bill is intended to accelerate remediation of unsafe cladding in residential buildings. The proposal is a new legal duty to remediate defective cladding together with another new register for mid-rise buildings (11–18 metres) in England requiring remediation. |
The bill is yet to be introduced in Parliament and timing remains to be confirmed. |
|
Building safety in Wales |
The Building Safety (Wales) Act 2026 has introduced a separate Welsh building safety regime. The requirements for the occupation phase of the BSWA will come into force in stages from 2027. Separate regulations covering the design and construction phase came into force in July 2026. |
From 2027. |
Residential sector |
||
|
Renters’ Rights Act 2025 |
A new register for residential landlords in England has been introduced by way of draft regulations. Registration will become mandatory as the scheme is introduced in each region. |
From 15 December 2026. |
|
Commonhold and Leasehold Reform Bill |
The government’s desire to reform the residential leasehold system, including the capping of ground rents. |
The reports have been published and the government has indicated an intention to bring forward legislation, but the final bill still needs to be put to Parliament and considered by both the Commons and the Lords. |
To close
The direction of travel is becoming clearer in some areas and more complex in others. The common theme is that real estate businesses should not wait for every detail to be finalised before planning. This update pulls together the main themes on the horizon, but it is necessarily general and is not tailored to the particular issues affecting your business, portfolio or sector. If you would like to discuss how any of these developments may affect your activities, please contact your usual Wedlake Bell adviser.
This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.
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