On the horizon

Spring has sprung. The nights are becoming lighter, the weather is becoming warmer, and the stamp duty land tax thresholds for residential purchases and first-time buyers have returned to where they were before the mini-Budget of September 2022. The chancellor’s Spring Statement brought no surprises for real estate. So what does property law have in store for us over the remainder of 2025? The death of ASTs It may be spring, but assured shorthold tenancies are very much in the autumn of their lives. The Renters’ Rights Bill cleared the House of Commons in January, and the committee stage in the House of Lords is scheduled to begin on 22 April. There is much to discuss, with 50 pages of amendments for their lordships to consider. And once the lords finish with the Bill, it will have to return to the House of Commons for final agreement before royal assent. Nonetheless, the Bill remains on course to become law by summer. The question will then be how quickly the government implements the various provisions of this wide-ranging legislation, much of which will require secondary legislation. The government has previously committed to early implementation of the ban on section 21 “no-fault” evictions (under the Housing Act 1988) and the abolition of fixed-term tenancies. Once implemented, there will be no more fixed-term assured tenancies. Assured shorthold tenancies will disappear and all new and existing tenancies will become periodic assured tenancies. It will be harder for landlords to remove tenants, giving tenants greater long-term security. Annual rent increases to the market rate will be permitted, but only pursuant to the section 13 procedure (under the 1988 Act). Those changes are significant enough, but this legislation will also do more once fully implemented. One of the most publicised measures is the right to keep a pet – although in truth this is not an absolute right, it is simply that a landlord cannot unreasonably refuse. The application of the Decent Homes Standard and Awaab’s law to the private rented sector are far more significant, seeking to ensure basic safe living conditions for tenants. Bidding wars will be outlawed, as will demands for large payments of rent in advance. It will also be unlawful to discriminate against prospective tenants who have children or receive benefits. The enforcement regime will also be strengthened. A new Private Rented Sector Database and PRS Landlord Ombudsman will be established, civil penalties will increase and the maximum amount of a rent repayment order will be doubled to two years’ rent. The rebirth of commonhold? Successive governments have decided that commonhold is the way forward for owning and managing flats. Flatholders should own their flats outright, they argue, with communal areas held by a commonhold association controlled by the flatholders. After so many false dawns, the recent White Paper (March 2025) represents the latest attempt to replace “feudal” leasehold structures with commonhold ownership. The government intends to force new flat developments down the commonhold route by banning new leasehold flats. The conversion of existing leasehold schemes to commonhold will also be easier. Before any of that can happen, we are promised a consultation and a draft Leasehold and Commonhold Reform Bill in the second half of this year. That Bill may also be the vehicle for promised new legislation tackling issues such as ground rents in existing long residential leases and forfeiture. Running alongside this is the implementation of the remaining provisions of the Leasehold and Freehold Reform Act 2024, which will continue throughout the year. In? Out? Shake it all about! Watch out for the second stage of the Law Commission consultation on reforming the Landlord and Tenant Act 1954, once the Law Commission has considered the responses to the recently concluded first stage and decided which of the four possible models to take forward. Should all business tenants enjoy security of tenure and renewal rights? Or none of them? Should we keep the current model, where business tenants have statutory rights unless they contract out? Or should the default be flipped, as championed by the British Property Federation, so that business tenants enjoy no rights unless they contract in? Although we can all point to deficiencies in the current regime that could usefully be improved, the fundamental question of whether business tenants should enjoy statutory protection – or be left to free market economics – is an overtly political decision. It will be fascinating to see how the Law Commission approaches the matter, and whether the government ultimately agrees with it. Efficiency drive Under previous proposals to increase the Minimum Energy Efficiency Standard for commercial properties (the energy performance certificate rating below which it is unlawful for landlords to be renting out premises, unless an exemption applies), 1 April 2025 would have seen the opening of the first compliance window ahead of the interim increase to EPC C in 2027. That obviously didn’t happen. The government’s December 2024 response to the Climate Change Committee’s latest progress report promises that we will finally receive a response to the 2021 consultation “early in 2025” – but don’t hold your breath, we have been here before. The government is also currently consulting on proposals to increase the Minimum Energy Efficiency Standard for residential properties to EPC C, with effect from 2028 for new tenancies and 2030 for all tenancies – and with an increased cost cap of £15,000. That consultation closes on 2 May 2025. The government also intends to reform the EPC regime in the second half of 2026. Any changes to the EPC regime have the potential to affect MEES compliance, especially since the recent EPC consultation picked up some of the outstanding issues from previous unimplemented MEES consultations, such as bringing all heritage buildings within scope and requiring EPCs to be renewed as they expire. Going once, going twice… The new government’s decision to resurrect legacy legislation from the Levelling-up and Regeneration Act 2023 and establish high street rental auctions with effect from 2 December 2024 raised eyebrows among those who had always been sceptical as to whether the policy could actually achieve its objective of breathing life into tired high streets and town centres. However, the government announcement on 6 March that “eight more local authorities have committed to implement HSRA powers as the latest wave of early adopters” suggests local authorities might be seeing things differently. And the early adopters are a geographically diverse bunch, ranging from Darlington and North Somerset to Westminster. It is too early yet for any council to have reached the stage of actually renting out vacant high street premises on behalf of a landowner, but are we in the early stages of a race to be the first authority to hold a rental auction? Will the threat of local authorities taking control be enough to encourage recalcitrant landlords to take action themselves? Or will it all be a damp squib? Having waited three years since the policy was first announced, we are about to find out the answer. Beyond the horizon Other things to look out for this year include: The Building Safety Act 2022 – expect more legal developments, more cases, more appeals, and the much-anticipated Court of Appeal judgments in Triathlon Homes LLP v Stratford Village Development Partnership and others [2024] UKFTT 26 (PC); [2024] PLSCS 16 and Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point [2023] UKUT 271 (LC); [2024] EGLR 2, which at the time of writing have both been part heard by the Court of Appeal. Climate change risk – the Law Society’s practice note on climate risk and conveyancing is expected imminently. Service charges – the second edition of the RICS professional standard, Service charges in commercial property is due to launch in summer 2025 and will apply to all service charge periods commencing six months from publication. Stamp duty land tax – will the government use 2025 to honour its manifesto pledge to increase the non-resident surcharge to 3%? Bill Chandler is a professional support lawyer at Hill Dickinson LLP