Throughout history, politics and law have always gone hand in hand and 2025 is no exception. With a new Labour government in power, their policies, views and plans impact every industry, from the Assisted Dying Bill impacting Medical Law to the changes to the Building Safety Act impacting conveyancing. Real Estate is not far behind in such changes. A report published by Handelsbanken stated that a large amount of people expect significant growth in demand for commercial assets over residential assets. With this change in investor preference on the horizon, this article looks at the upcoming changes and the impact it can have on clients.
High Street Rental Auctions
The Levelling-Up and Regeneration Act 2023 introduced the high street rental actions with the aim of addressing and fixing the issue of the long-term vacant commercial properties as found in the town centre. This came into effect on 2 December 2024. This new initiative allows councils to take control and auction off leases of properties that have been vacant for over 12 months. The crux of this is the fact that the use is required to benefit the local economy, society or the environment.
The council is expected to work with the landlords in questions and to obtain their input, as suggested by the guidance. For clients looking to invest in their local high street, obtaining a vacant and existing lease via auction will allow them to work with the council to “bring businesses back to high streets”[1]. Whilst the process is quite extensive and complex, this boost along with the £1 million funding is designated to bring more life back to the local high streets, after years of closures, an area worth capitalising on.
EPC reform
With the new EPC changes in place, landlords will need to ensure their rental properties are at a minimum EPC rating of C. Existing tenancies have to comply by 2030 but new tenancies have an earlier deadline of 2028. It is important to note that the government is planning to transform the EPC system in 2026 by changing the way the ratings are given.
For tenancies not yet granted, it is important for landlords to understand that this is a cost they will have to shoulder, unless agreed otherwise, in due course. This includes preparing to finance these costs and allocating a portion of this to the tenant. Landlords may wish to also review any alterations made or proposed by the tenant to review its impact on energy efficiency. It is important for current and future landlords to note this change and ensure they review and futureproof their portfolios in readiness.
Planning and Infrastructure Bill
Dubbed as a “radical evolution” of the current planning system, the draft Bill is aimed at tackling and fixing the delays in implementing and delivering infrastructure schemes. This includes streamlining consultation processes and reducing chances to take challenges to the High Court, with only one attempt being allowed in some occasions. The Labour government’s focus is to build physically and economically. This bill will allow them to delivery new homes but also work alongside clean energy projects.
Developer clients will be benefited by the newer streamlined planning process. Whilst perhaps, in the eyes of many people, an overhaul of the system was required; these changes will allow for expediting projects which can lead to increase in demand and a reduction in delays. It remains to be seen how developers change their future plans and strategies to tie them into the flexibility this Bill may allow them.
Conclusion
In this ever-changing market and evolving landscape, it is important for all clients to keep themselves aware and updated as to the changes and their impacts on them. Remaining proactive is key to thriving amongst fluctuating markets and legislative changes.
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[1] Vacant shops to be filled as high streets revitalised – GOV.UK