Property litigation predictions for 2026

Renters' Rights Act 2025

All of those working within the residential landlord and tenant arena will be aware that the Renters Right Act 2025 ("the RRA 2025") received Royal Assent on 27 October 2025 and promises to revolutionise the rental market. It remains to be seen as to whether this revolution will be positive or not.

The provisions of the RRA 2025 will be brought into force in stages. The main focus will, of course, be on the abolition of Section 21 "no fault" evictions and that all assured shorthold tenancies will now become assured tenancies in May 2026. On a practical point, landlords and managing agents must also bear in mind the information which must be provided to their tenants prior to 31 May 2026 (the details of which are yet to be announced).

We expect to see an influx of litigation ahead of the deadline at the end of April 2026 and all engaged in this area will be keen to see how the already stretched court system will cope. See our podcast on this here.

Leasehold and Freehold Reform Act 2024

The Leasehold and Freehold Reform Act 2024 ("LFRA 2024") received Royal Assent in May 2024, however, whilst a few provision are already in force, the majority of the Act is not yet in force. Over the last year, the government have undertaken various consultations on the implementation of the reforms which may lead the way to more parts of the LFRA 2024 coming into force during the next year.

The High Court dismissed the judicial review challenge in respect of the new valuation methods for enfranchisement and lease extension. However, it may well be that there will be a successful appeal from that decision so this dispute remains a key focus for practitioners at this time.

Landlord and Tenant Act 1954 reform

2026 promises to be a landmark year for the Landlord & Tenant Act 1954. Having concluded last year that the existing security of tenure and contracting out model should remain in place, the Law Commission has said that it expects to publish its second consultation paper dealing with the detail of how the Act might be reformed in the spring of this year. We should expect the Law Commission to take into account the broad consensus between landlords and tenants that aspects of the Act are burdensome and out of date and stand in the way of modern commercial practices. Reforms which might be suggested by the Law Commission potentially include:

• A simplification of the contracting out process
• How and in what forum lease renewal disputes should be resolved, with less reliance on the Courts so as to ensure unopposed disputes are resolved more quickly and at less expense
• The terms of the new lease must take into account environmental considerations in addition to the terms of the existing lease
• A review of the 7 statutory grounds on which a landlord can rely to oppose a tenant's lease renewal application, with particular focus on the ingredients of the landlord's intention required for the redevelopment and own occupation grounds
• Whether a turnover rent can be included on renewal.

All will be revealed in the coming months.

Landlord and Tenant (Covenants) Act 1995

The Law Commission is set to review the Landlord and Tenant (Covenants) Act 1995 hopefully with the intention of clarifying by statutory amendment the ability of guarantors to guarantee the tenants performance under an authorised guarantee agreement "AGA", such that the assignor's guarantor would be able to repeat the guarantee with a group company assignee, to guarantee both the assignor and assignee's obligations, or to provide a sub-guarantee in an intra group assignment. If well drafted this could make many complex leasing transactions easier.

Landlord and Tenant Act 1987 – rights of first refusal

The law of the rights of tenants' first refusal under the Landlord and Tenant Act 1987 is set for some further hoped for clarification by the Court of Appeal in March in the appeal of the case of SGL1 Ltd v FSV Freeholders Ltd, where the court will look again at the question of what constitutes a single building for the purposes of the Act. The decision relates to whether four blocks of flats constitute a single building for the purposes of the Act. The position is currently confused with questions as to shared single accessways and shared underground carparks or foundation slabs often being determinative.

Building safety – service charge cases

We expect 2026 to be another busy year as we see litigation regarding the application of the Building Safety Act 2022 ("the BSA 2022") and, in particular, in relation to the recovery of costs for building safety works, to continue to make it way through the courts.

All eyes will be on the Supreme Court who granted partial permission to appeal in the Hippersley Point and Triathlon Homes cases. The Supreme Court will be asked to consider whether costs incurred before the BSA 2022 are recoverable under the relevant provisions of the BSA 2022.

Additionally, in Almacanter Centre Point Nominee No 1 Ltd and another -v- de Valk and other [2025] the Court of Appeal will be considering whether service charge is payable by qualifying leaseholders in relation unsafe cladding systems even if there is no relevant defect.

Insolvency

A pivotal decision is expected from the Supreme Court in early 2026 in the matter of Waldorf Production UK plc v HMRC and others, the first appeal concerning a Part 26A restructuring plan to reach the Supreme Court. The Court is being asked to clarify the correct approach to the treatment of “out‑of‑the‑money” creditors and the appropriate weight to be given to fairness and creditor engagement before sanctioning a cross‑class cram‑down. The High Court's initial refusal to sanction Waldorf's proposed plan on the grounds of fairness to dissenting creditors is consistent with a general push by the Courts throughout 2025 towards more engagement with, and better consideration of, dissenting creditors by plan companies. A decision of the Supreme Court in favour of stricter fairness obligations has the potential to raise recovery levels for unsecured creditors - including landlords - by requiring improved negotiation and more generous distributions. This could put landlords on a stronger footing in restructuring scenarios. 

Ban on upwards-only rent reviews

The proposed ban on upwards-only rent reviews in new and renewed commercial leases in England and Wales, anticipated to take effect in 2027-2028, is likely to continue to cause ripples through 2026 as landlords plan how they might adapt to the change. On the retail side, we are likely to see a continuation of the trend towards turnover linked rents, while elsewhere fixed or stepped increases could become the norm. Longer term, recalibration of lease terms to manage revenue risk and maintain investment value looks inevitable – but whether this will be possible within the parameters of 1954 Act renewals remains to be seen. The ban will only accelerate the shift towards shorter leases, which in turn will mean more active asset management on the part of both landlords and tenants as expiries become more frequent.

Rates revaluation and Section 25 notices

Under the Landlord and Tenant Act 1954 (Act), where a landlord wishes to oppose the renewal of a lease which has the benefit of security of tenure at the end of its contractual term, they are entitled to seek possession on “no-fault” grounds (such as redevelopment or own occupation) by serving a section 25 notice or a counter-notice in response to a tenant's section 26 request for a new lease. In such instances, where the landlord is successful, compensation is payable to the tenant. Under section 37(5) of the Act, statutory compensation is calculated based on the rateable value of the property at the date the section 25 notice is served. As rateable values are set to increase for many properties post-revaluation in April 2026, any section 25 notice served from 1 April 2026 onwards could trigger significantly higher compensation payments for landlords. See our more detailed alert on this here.