three regulatory bodies impacting the real estate business planning

• Tunbridge Wells:  01892 510000
• Thames Gateway:  01322 623700

Publish date

1 February 2024

Top ten key legal areas of change affecting the real estate sector in 2024

During 2023, we experienced unprecedented legal and regulatory changes affecting all aspects of real estate. With 2024 now well underway we expect to see more of the same, particularly with a general election on the horizon!

We set out below a summary of the top 10 key areas the real estate sector should be aware of as we go through 2024.

1. Building Safety Act

The Building Safety Act 2022 was enacted primarily in a justified response to the failures in building safety resulting in the Grenfell disaster.

The Act is arguably the widest reaching piece of legislation of our time. Its provisions affect everything from a small residential house extensions to the building and management of the largest buildings (those at least 18 metres in height or with at least 7 storeys) and everything in between.

Sadly, this legislation was rushed and mechanisms imposed, which place a heavy burden on landlords and developers alike, have not always been entirely thought through. Due to this the Government has already published amendments to this Act and further updates are likely.

The legal impact of the legislation is likely to develop over the next 12 months as cases are brought and we see how the courts interpret and apply the legislation to real life scenarios. As the impact of the legislation is so broad, we recommend that specialist legal advice is sought to ensure you are not inadvertently affected.

2. Energy performance of premises

Minimum energy efficiency standards (mees).

Most buildings are required to have an Energy Performance Certificate (EPC). This certificate provides details about the building’s energy efficiency and includes recommendations for improvements. The Minimum Energy Efficiency Standards (MEES)  specify a minimum EPC rating that properties must achieve to be considered energy efficient.

Summary of the position to date:

• Since 1 April 2020, residential properties used for lettings have been required to have an EPC rating of E or above and government consultation documents indicated this would increase to a rating of C in 2025 for new lettings and will apply to continuing tenancies by 2028.
• Since 1 April 2023, commercial properties cannot be let or continue to be let if they have a rating of E or below and government consultation documents indicated this will increase to C by 1 April 2027 and B by 2030.

These targets require necessary improvements to be made to properties in order to achieve the required efficiency ratings.

However, in September 2023, Rishi Sunak PM, announced a relaxation of the Government’s approach to net zero initiatives (the Announcement). The Announcement has increased uncertainty in the real estate sector as it is unclear whether proposals for increases in MEES targets in Government consultations will be withdrawn. Whilst current requirements for MEES remain in effect, it seems, following the Announcement, that landlords may no longer be compelled to make energy performance upgrades in relation to residential property but instead will be encouraged to do so.

In relation to commercial property it does not appear that the current targets have been scrapped, although the timelines for any increases may be relaxed – for further discussion see Joe Davidson’s recent article here .

So for now, especially in relation to commercial property, real estate owners should continue to consider the energy performance of their properties and how and when they will carry out works.

Energy Act 2023

The Energy Act 2023 received Royal Assent on 26 October 2023. The scope of the Act is wide ranging.

The general nature of the Act is to enables future legislative changes by empowering the government to implement secondary legislation over a wide range of energy related topics – Part 10 is focused on energy performance of premises. There are therefore no immediate amendments or additions made to the current energy efficiency standards for properties. Though, as and when the government do decide to act, this legislation could be relied upon to facilitate such a change. For more detail on this Act see Joe Davidson’s article above.

3.Climate change and real estate

 green leases.

The real estate sector is more environmentally conscious than ever and we expect to see a rise in the use of Green Leases in commercial real estate. Green Leases encourage landlords and tenants to co-operate with one another to reduce the impact the property has on the environment. There is no standard form of Green Lease and the clauses in each lease will depend on the particular property and the aims of the individual parties. This might range from a commitment to meet regularly and monitor the energy performance of a building to a more onerous obligation on the parties to meet certain energy performance targets.

Solar taskforce

A new solar taskforce has been created by the UK Government’s Department for Energy Security and Net Zero, tasked with revolutionising UK solar power. The taskforce has resolved to publish a solar roadmap in 2024 setting out a clear step-by-step deployment trajectory, including further permitted development rights and faster connections to the grid (which can presently take up to 15 years!). According to the taskforce, commercial buildings have significant untapped potential for the deployment of solar panels.  Joseph Davidson has prepared   this article setting out more detail on the road ahead.

4. Levelling Up and Regeneration Act (LURA)

LURA received Royal Assent on 26 October 2023. Its mission is to bring new laws to speed up planning, build new homes and level up. It is a wide reaching piece of legislation:

• Putting people at the heart of development by making it easier to put local plans in place to deliver more homes in a way that works for communities
• Boosting local services by requiring developers to deliver vital infrastructure. Undoubtedly, this will place further financial pressure on developers when delivering their schemes
• Rebalancing the housing and land markets giving local councils the power to increase council tax on empty homes and reforming compensation for compulsory purchase orders by removing ‘hope value’
• Encouraging developers to build by requiring them to give updates to communities as to the progress of developments and giving local councils the ability to consider low build-out rates when approving planning. This will put pressure on developers to ensure that their sites are progressed with all due speed and bring an administrative pressure when keeping communities appraised of progress. If developments are progressing too slowly, local councils will have the power to issue completion notices and set timescales for developments to be completed by. Part 11 of LURA will place a further burden on developers to disclose information about interests and dealings in land which Katie Payne explores here .
• Bringing high streets back to life by giving local councils the necessary powers to work directly with landlords to bring empty buildings back in to use by local businesses and community groups through high street rental auctions. Local authorities will also make it faster for local authorities to give hospitality businesses permission to use outdoor seating in a similar way to that which we saw coming out of the Covid pandemic. LURA provides local councils with the power to force commercial landlords to let their property if it has been vacant for 12 months or more. Oliver Butler outlines all you need to know here .

At this stage, LURA only provides the framework for the Governments plans and much of the detail will be provided in policy, guidance and secondary legislation. LURA will, without doubt, have a huge impact on the real estate sector over the coming year (and for years to come).

LURA and nutrient neutrality

Prior to LURA receiving Royal Assent, Michael Gove, Secretary of State for Levelling Up, Housing and Communities made a last minute announcement that water pollution rules (nutrient neutrality) would be eased through LURA for house builders. The rationale behind this is to allow an additional 100,000 homes which were stalled by the nutrient neutrality rules to be built by 2030. His announcement was welcomed by developers but there was backlash from environmentalists who claimed the relaxation of the rules represented a huge threat to the health of our waterways.

The eleventh hour amendment was rejected by peers in the House of Lords. With an ever-increasing need for new housing it will be interesting to see whether further changes are proposed to unlock the currently stalled planning applications preventing development. Our comments on this and our links to nutrient neutrality can be found here .

5. Biodiversity Net Gain (BNG)

The rules in relation to BNG were introduced as part of the Environment Act 2021. They place obligations on property developers to leave any natural habitat in a better condition than before the development started.

The basic gain requirement of 10%, will take effect from 12 February 2024 and will be a mandatory condition within planning consents (save for small sites where the basic gain requirement will apply from 2 April 2024). There are some exemptions for planning applications and decisions granted made before 12 February and for retrospective applications. Whilst 10% is mandatory, some local planning authorities will opt for larger percentages therefore increasing the pressure on developers.

Developers can implement BNG either on site or by off-setting on other land. We are likely to see changes over the coming year as regulations will be required to ensure BNG applies to all routes to planning permission.

Kate Jardine updates us on the commencement dates for various site sizes here .

6. Register of Overseas Entities

Born from the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA), the Register of Overseas Entities (ROE) was created, to aid the crack down on economic crime. The purpose of ROE, which is held by Companies House, is to create a central register of the beneficial owners and/or managing officers of UK real estate owned by overseas entities. To ensure the ROE is kept up to date, overseas entities are required to update the register annually to record any changes to the beneficial interests.

On 26 October 2023, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent. It is not yet fully in force but ECCTA will bring about changes to the ROE. These include new requirements for overseas entities to disclose title numbers for qualifying estates, changes to principal office address requirements, and to disclose changes in beneficiaries under trusts.

There is also a consultation on improving transparency of land ownership involving trusts which will close on 21 February 2024 . This is taking views on widening access to trust information held on the ROE.

Laura Keatley’s article covers ROE updating requirements, enforcement and the next steps overseas entities should take.

7. Freehold, leasehold and commonhold reform

Commonhold is an alternative land ownership structure to leasehold ownership, allowing you to own property, such as a flat, indefinitely rather than for a fixed period of time. Commonhold owners are entitled to become a member of the commonhold association which will own, manage and maintain the common parts of the building and estate. The Commonhold system was introduced in 2002 but has failed to gain support and traction for a number of reasons, including the exclusion of shared ownership leases. The Government is now looking at ways to encourage and reinvigorate commonhold ownership including:

• Allowing flexibility to cater for large, mixed-use developments
• Enabling the accommodation of shared ownership leases
• Allowing commonhold developments in phases
• Simplifying the conversion process from leasehold to commonhold ownership.

If successful, the commonhold structure can offer many benefits to property owners. The indefinite ownership avoids the need for lease extensions and lease renewals and the joint ownership of the common areas provides more control over the maintenance of communal building. We await further announcements from the Government with details of their proposals in this area.

Leasehold and Freehold Reform Bill

The Leasehold and Freehold Reform Bill was introduced to the House of Commons on 27 November 2023. It aims to improve the leasehold system by making it cheaper and easier for leaseholders to manage their property and features:

• The removal of costs such as “marriage value” in relation to enfranchisement
• A ban on new leasehold houses
• An increase to the term of a statutory lease extension from 90 to 990 years.

  Whilst we now have a clear idea of the Government’s next steps, we still await a timetable for the implementation of these changes.

8. Renters (Reform) Bill

  The Renters (Reform) Bill was re-introduced in the King’s speech on 7 November 2023 and aims to reform the private rented system by:

• Abolishing fixed term assured tenancies and assured shorthold tenancies
• Amending the existing grounds for possession
• Removing no fault evictions.

  The overhaul of the system seeks to benefit both landlords and tenants. Landlords should have greater certainty that they will obtain possession of their property if they genuinely want to sell it and tenants would no longer be at risk of the “no fault” eviction. However, the Bill still has a number of hoops to go through before it becomes law and the Government has indicated that any provisions abolishing no fault section 21 evictions will not be brought into force even when the legislation is passed until a series of improvements are made in the court system so that it can cope with the volume of work the changes will trigger. We will wait to see how it progresses later this year.

Read Emma Stevenson Smith’s article linked here for further information.

9. Charites Act

The Charities Act 2022 simplifies some of the legal processes that charities must follow when dealing with charity land. It has been coming into force in stages since it received royal assent on 24 February 2022. Section 18 amends the exceptions to the general restrictions on charity land disposals and section 23 will make the statements required in instruments effecting disposals clearer. These sections are yet to be implemented but are expected to come into force in early 2024.

Caroline Cohen’s article here gives more information about the changes that have already been implemented, as well as those due to come into force in March 2024.

 10. Changes to the Landlord and Tenant Act 1954

  The Landlord and Tenant Act 1954 has been in existence for 70 years without any significant review for nearly 20 years. It therefore comes as no surprise that reports to the Law Commission conclude that the Act is  “burdensome, unclear and out-of-date”. The Law Commission is conducting a review of the Act which will consider how the right to renew business tenancies is working and set out the options for reform.

The Law Commission’s intentions are considered in more detail in Caroline Cohen’s article .

The Law Commission aims to publish a consultation paper as soon as possible in 2024 and we wait to see whether the proposals will provide the clarity and modernisation the Act requires.

2024 looks to be an exciting year for real estate with many legal changes either coming in to affect or bedding in.  For our regular updates on all things real estate over the coming year follow us on LinkedIn .

Related articles

What does the Autumn Budget mean for the real estate sector?

Key considerations for food and drink operators or retailers in negotiating a fair lease

Changes to Agricultural Holdings Act 1986 succession rules

Keep up to date with our newsletters and events

Enter your name

Enter your email address

Your interests? General Private Client General Commercial Construction Court of Protection Agriculture & Rural Affairs Commercial Property Employment Dispute Resolution Corporate & Commercial Charities & Not for Profit Food & Drink Education Transport & Logistics Family Business & Owner Managed Businesses

• How we can help
• Making a will and estate planning
• Minimising your exposure to Inheritance Tax (IHT)
• Creating a trust or family investment company
• Creating Lasting Powers of Attorney
• Making a post death deed of variation
• Meet the team
• The probate process, timeframes and costs
• Dying without a will – intestacy
• International estates
• Agricultural estates
• Digital assets
• Post death variations
• Independent Administration
• Will, Trust & Estate disputes
• Support for beneficiaries
• Divorce & dissolution
• Finances on divorce & dissolution
• Living together & separating as an unmarried couple
• Prenuptial & postnuptial agreements
• One Couple, One Lawyer
• Collaborative law
• Injunctions & domestic violence
• The conveyancing process and fees
• Buying or selling a listed property
• Transfer of equity
• Buying and selling properties with land
• Joint ownership and declarations of trust
• Buying a holiday or second home
• Lease extension & enfranchisement
• How can we help
• Employment disputes & tribunals
• Settlement agreements
• Discrimination & harassment
• Redundancy & termination
• Disciplinary, grievances & performance management
• Restrictive covenants & confidentiality agreements
• Help with clinical negligence claims
• Accident and emergency department claims
• Amputation claims
• Birth injury claims
• Brain injury claims
• Cancer – Misdiagnosed or delayed diagnosis cancer claims
• Cardiac claims
• Cauda Equina claims
• Cerebral palsy claims
• Claiming for poor care in a hospital or care home
• Compensation claims on behalf of children
• Cosmetic surgery claims
• Defective medical device claims
• Diabetes claims
• Ear, nose & throat claims
• Eyesight & vision negligence claims
• Fatal & inquest claims
• GP negligence claims
• Gynaecology negligence claims
• Hospital negligence claims
• Urology and kidney (renal) injury claims
• Meningitis negligence claims
• Misdiagnosis and delayed diagnosis claims
• ‘No win no fee’ medical negligence claims
• Orthopaedic injury negligence claims
• Pregnancy negligence claims
• Sepsis negligence claims
• Spinal injury negligence claims
• Stroke misdiagnosis claims
• Surgery compensation claims
• Help with personal injury claims
• Accident in a public place claims and accident on private premises claims
• Accidents at work claims
• Allergic reaction claims
• Asbestos & poisoning claims
• Chronic pain claims
• Criminal injury claims
• Cycling & motor biking claims
• Defective product claims
• Fatal accident claims
• Functional neurological disorder claims
• Mesothelioma claims
• Road traffic accident claims
• Self-drive & vehicle malfunction claims
• Spinal personal injury claims
• Sports injury claims
• Personal tax compliance
• Trust management & tax compliance
• Trust disputes
• Property tax compliance
• The role of the Court of Protection & deputies
• Appointing a deputy
• Lasting Powers of Attorney (LPAs)
• Statutory wills, gifts & other applications
• Personal injury trusts
• Supporting elderly & vulnerable people
• Expert witness service
• What is a Notary?
• What we offer and how we can help?
• Get in touch
• Our approach
• Mergers & acquisitions: buy-side
• Mergers & acquisitions: sell-side
• Private equity & venture capital
• Banking & finance
• Reorganisations & demergers
• Joint ventures & shareholder agreements
• Corporate advisory
• Share options & schemes
• Employee ownership trusts
• Commercial contracts
• Data & privacy issues
• Intellectual property
• Technology, IT & outsourcing
• Acquisitions & disposals
• Portfolio asset management
• Residential development
• Commercial development
• Real estate finance
• Agricultural & rural property
• The Building Safety Act
• Construction
• Real estate disputes
• Commercial & international disputes
• Construction disputes
• International arbitration
• Director, shareholder, company & partnership disputes
• Restructuring
• Fraud, insolvency & asset recovery
• Reputation management, defamation & privacy disputes
• Intellectual Property (IP), passing off, confidential information & IT disputes
• High value debt recovery
• Real Estate Disputes
• Third party funding
• Restrictive covenants, confidentiality & competition
• Employee exits & settlement agreements
• Contracts, policies & staff handbooks
• TUPE, outsourcing and M&A
• Projects, redundancy & restructuring
• Managing people (disciplinary, grievances & discrimination)
• Employment status and IR35
• Employee data protection
• Discrimination in goods & services
• Data subject access requests
• Employment advice service
• Introduction
• Project documentation
• Project support
• Construction dispute resolution
• International project advice
• All Sectors
• Agriculture & Rural Property
• Construction & Engineering
• Charities & Not for Profit
• Food & Drink
• Transport & Logistics
• Environmental, Social & Governance
• Equality, Diversity & Inclusion
• Job opportunities
• Life at Thomson Snell & Passmore
• Client stories

• SELECT YOUR LOCATION
• Global (English)
• LOCAL SITES
• Belgium (English)
• Bermuda (English)
• Cayman Islands (English)
• China (English)
• Curaçao (English)
• Cyprus (English)
• France (English)
• Guernsey (English)
• Hong Kong (English)
• India (English)
• Ireland (English)
• Isle of Man (English)
• Japan (English)
• Jersey (English)
• Luxembourg (English)
• Mauritius (English)
• Netherlands (English)
• Singapore (English)
• South Africa (English)
• Switzerland (English)
• United Kingdom (English)
• United States (English)
• United Arab Emirates (English)

All services

• Impact funds
• Digital assets
• Energy and infrastructure
• Hedge funds
• Hybrid funds
• Real assets services
• Private debt and credit
• Open-ended funds
• Private equity and venture capital
• No services to display.
• Aviation finance services
• Banking and treasury
• Collateralised loan obligations (CLOs)
• Corporate administration services
• Loan services
• Securitisation

Asset classes & fund types

Key services

Asset Owners

Foundation and endowments

Family Office

Pension Funds

Sovereign Wealth Funds

Supranationals

Intragovernmental agencies

An overview of legislation impacting real estate

16 Oct 2024

Here, we provide a global roundup of the latest legislative changes likely to impact real estate fund managers. From shifts in tax regulations to new sustainability reporting requirements, these updates reflect broader trends toward increased transparency, environmental responsibility, and regulatory rigor.

Reserved Investor Funds (RIFs) draft regulations

In response to a review of the UK funds regime, the UK government is proposing a new unauthorised contractual scheme, known as the RIF, aimed at certain investors. This scheme could provide an ‘onshore’ alternative to existing ‘offshore’ structures for UK real estate investments.

Following a consultation period from April to June 2023, draft regulations for the RIF were released in April 2024. These regulations were open for consultation until 14 May 2024, and were authorised under the Finance Act (No. 2) 2024. The following points are based on the draft regulations, which may be revised before they are finalised.

The ‘restricted’ RIF regime

The ‘restricted’ RIF regime, which requires an election to apply, will be available only under the following conditions:

• The RIF is continuously ‘UK property rich’ : This ensures non-resident investors are subject to tax, similar to the Fund Exemption Election applicable to ‘offshore’ funds. There are specific consequences for failing to meet this condition
• The RIF’s investors are all tax-exempt : This applies to investors who are exempt from tax on gains due to non-residence, including UK registered pension schemes, certain overseas pension schemes, and sovereign immune investors. This is akin to the treatment of a UK exempt unauthorised unit trust
• The RIF doesn’t invest in UK property or UK property-rich companies : There is an exception for investments of less than 10% in certain UK property-rich collective investment vehicles. If the RIF avoids UK property investments, there should be no UK tax loss for non-resident investors

Potential impact on RE fund managers

Following the successful implementation in the UK of the Private REIT regime, the RIF is expected to be also highly attractive as a fund vehicle for investment in UK commercial real estate for tax exempt investors (as mentioned above under the restriction rules). Unsurprisingly, this new vehicle has already received the backing of the Association of Real Estate Funds ( AREF ).

Summary of the Corporate Sustainability Reporting Directive

Since 2018, large companies in the EU have been required to make sustainability disclosures under the Non-Financial Reporting Directive (NFRD). However, in January 2023, the Corporate Sustainability Reporting Directive (CSRD) was introduced, expanding and enhancing these requirements significantly. The new directive aims to increase transparency and broaden the scope of reporting, affecting approximately 50,000 companies.

Key points of the CSRD

• Expanded scope : Starting with reports for fiscal year 2024, companies currently covered by NFRD will begin reporting under CSRD. From 2026, even more large companies will be required to disclose sustainability information. Small- to medium-sized enterprises (SMEs) will also fall under the directive starting in 2027
• Increased reporting requirements : The CSRD introduces more comprehensive reporting obligations, including a mandatory audit and assurance process to prevent greenwashing. This is intended to provide investors with better information on sustainability-related risks and promote transparency about the impact of companies on people and the environment
• 250 employees (down from 500 under NFRD)
• €40 million in turnover
• €20 million in total assets. Additionally, companies listed on EU-regulated markets and non-EU companies with substantial EU turnover will be subject to CSRD. Listed micro-enterprises are exempt
• Reporting standards : Under CSRD, companies must report on their sustainability impacts, risks, and opportunities, covering a broad range of environmental, social, and governance factors. The reporting will follow the EU Sustainability Reporting Standards (ESRS), which are being finalised

Preparation for CSRD : Companies should begin preparing now by understanding the new requirements and assessing their current reporting processes. Although reporting starts in 2025, early preparation is crucial to meet the updated standards and ensure compliance.

Summary of Dutch Supreme Court Ruling on German Sondervermögen

On 14 June 2024, the Dutch Supreme Court made a significant decision regarding the tax treatment of German Sondervermögen investing in Dutch real estate. The court ruled that a German Sondervermögen doesn’t qualify as a ‘special-purpose fund’ (doelvermogen) if it issues participation rights entitling holders to the fund’s capital. Consequently, such funds aren’t subject to Dutch corporate income tax (CIT) on income derived from Dutch real estate.

Key insights

• Legal form : The Dutch Supreme Court decided that a Sondervermögen should be considered a foreign legal form equivalent to a Dutch mutual fund for joint account ( fonds voor gemene rekening )
• Tax status : The Dutch Supreme Court ruled that German Sondervermögen aren’t subject to Dutch CIT on income from Dutch real estate
• Refunds possible : German Sondervermögen previously subject to Dutch CIT may be eligible for refunds of any Dutch CIT paid, subject to individual review
• Future changes : Starting in 2025, new Dutch tax classification rules will address the Supreme Court ruling, altering the tax treatment of such funds
• General application : The ruling is applicable to other German Sondervermögens and similar foreign legal forms with multiple investors that directly invest in Dutch real estate and issue capital-entitling participation rights. These entities shouldn’t be subject to Dutch CIT for current and prior tax years, potentially leading to tax refunds
• German tax treaty : The tax treaty position with Germany might also be relevant in determining tax implications

Looking forward

• Upcoming changes : New Dutch tax classification rules effective 1 January 2025, will include non-transparent foreign legal forms like Sondervermögen on the list of non-resident taxpayers. Thus, from 2025, these entities will be subject to Dutch CIT on Dutch real estate income
• End of FBI-regime : The FBI-regime will no longer apply to Dutch entities directly owning Dutch real estate starting 1 January 2025, affecting the applicability of similar arguments by foreign entities.

How IQ-EQ can help

Our team of experts offers comprehensive, tailored support services, powered by cutting-edge software and a robust data platform. From corporate structures to fund management, we tailor the appropriate solutions across various jurisdictions. Discover how we can help you establish and administer everything from special purpose vehicles to REITs.

Contact us today to learn more about how we can support your real assets needs.

About the author

Tamas Mark is Global Head of Real Assets at IQ-EQ, based in Luxembourg. With over 20 years’ experience in the industry, Tamas has extensive knowledge of managing complex real estate structures holding assets across many property sectors.

Global Head of Real Assets

Related insights

Private & Institutional Asset Owners

A guide to private funds: why, when, and where

26 Jun 2024

Fund & Asset Managers

Japan’s private equity market: a beacon in Asia

17 Jun 2024

The state of digital adoption report

17 May 2024

Working with IQ-EQ has been seamless – you and your team understand our business, advise us appropriately, and handle your side of our collective partnership so that we can focus on making good investment decisions. Evan Gibson SVP, Merchants Capital

Get in touch with us today

We’re ready to listen.

Interested in joining our team?

We are always on the lookout for passionate people that possess IQ and EQ to join our growing team.

Subscribe to updates

Help me choose a service.

Question 1 of 3

What expertise?

Question 2 of 3

Question 3 of 3

and I need:

Recommended for you

Stay informed

Subscribe to our alerts and receive our latest insights and legal updates.

You are using an outdated browser. Please upgrade your browser to improve your experience.

Please enable JavaScript in order to view this site properly.

• About Shoosmiths
• Impact report FY24
• Innovation & AI
• Recognition
• Senior leadership team
• The Shoosmiths client experience
• Business services careers
• Emerging talent
• Legal professionals
• Our responsibility
• Corporate responsibility
• Diversity, equity & inclusion
• Social mobility at Shoosmiths
• The Shoosmiths Foundation
• Media contacts
• Client login
• Pay my bill

Suggested searches

• Back arrow About
• Innovation & AI
• Back arrow Careers
• Back arrow Our responsibility
• Diversity, equity & inclusion
• Back arrow Client login

The legal changes set to shape the UK’s real estate industry in 2024

What matters.

Shoosmiths' real estate experts provide an overview of the key legal developments set to impact the industry in 2024, with guidance on when new legislation is coming into force, ongoing government consultations and the potential implications for developers, property owners, investors, funders, operators and corporate occupiers.

What matters next

2024 could see major new legislation come into force, as well as new reforms proposed. It's vital that real estate businesses recognise these changes and their potential implications, working with their professional advisers to prepare and ensure compliancy.

Shoosmiths’ legal experts outline the key legal changes set to impact the UK’s real estate industry in 2024 and beyond.

Introduction of biodiversity net gain in england.

New biodiversity net gain requirements will be introduced for large development sites from 12 February 2024 and are set to also apply to smaller sites from 2 April 2024.

Biodiversity net gain aims to create and improve natural habitats by measuring the impact of a development on biodiversity. Developers will have to deliver a biodiversity net gain of at least 10% - providing an increased or higher quality natural habitat than there was before development was undertaken as part of the planning process.

Building Safety Act 2022

Most of the Act’s provisions were brought into force by 1 October 2023. However, some secondary regulations are not yet in force, particularly in relation to the provision of information in the occupation phase, the introduction of the Building Safety Levy and a mandatory 15-year new homes warranty.

As the industry adjusts to the new regime, new practice is likely to develop in relation to standard due diligence and drafting - providing clarity as to responsibility for compliance with the Act’s many requirements throughout the lifecycle of a development.

For the time being, it is critical that development agreements are consistent with the building contract and other construction documentation - taking into account the wider implications of the Building Safety Act that apply to all construction works, including the new competency requirements for the developer and key members of the development team.

For more in-depth analysis, Shoosmiths has investigated the construction legal developments to prepare for in 2024 .

The Levelling up and Regeneration Act 2023

The Act received Royal Assent in October 2023, with further regulations expected in 2024 to bring the various aspects of the Act into force.

The Act includes wide-reaching changes affecting the real estate sector, including reforms to the planning system, and the Community Infrastructure Levy. This is alongside key provisions around rental auctions – allowing local authorities to intervene to improve the local economy by creating lettings of high streets or in town centres, the compulsory disclosure of agreements that give a person control over the development of land and detailed obligations to disclose beneficial interests in land.

Further regulations will set out how the rental auction process will work, including the terms of the agreement for lease and the lease that will be imposed on landowners whose land is subject to the rental auction process.

The government has recently launched a major new consultation on its proposals to capture information about contractual control agreements intended to secure land or property for residential, commercial or mixed-use development. The scope of the contracts disclosable under the proposed regulations is very wide and will affect many forms of contracts for the development of land.

The government has also issued a separate consultation on transparency of land ownership where trusts are involved in the ownership structure.

Changes to the Register of Overseas Entities to tighten transparency rules under the Economic Crime (Transparency and Enforcement) Act 2023

The precise timetable for implementation is unclear, but some measures will come into force in 2024.

Overseas entities will be required to disclose and verify HM Land Registry title numbers for their qualifying estates and provide further details about trust structures. This will apply to new registrations and to the annual updating of registration details.

If an overseas entity fails to respond to any requests for information from Companies House, it will not be able to dispose of UK real estate assets, as it will not be a “registered entity”. 

The Act contains many other changes for companies, aimed at providing further transparency over ownership and combatting financial crime.

Charity land disposal provisions in the Charities Act 2022

The third stage of implementation of the Charities Act 2022 is due in early 2024. 

Some provisions relating to the disposal of charity land came into force on 14 June 2023, but others are outstanding. These include changes about what must be included in statements for disposals and mortgages by charities, together with no future need for charity trustees to certify compliance with the Charities Act 2011 regime.

New provisions will also cover the taking out of mortgages by liquidators, provisional liquidators, receivers, mortgagees, or administrators.

Minimum Energy Efficiency Standard (MEES)

Formal responses to consultations relating to MEES are expected in early 2024, with secondary legislation to follow to implement Government policy.

Following Government announcements in autumn 2023, it appears that the MEES scheme in relation to residential properties will not change. Commercial properties may still be subject to higher EPC ratings, but on a slower trajectory than the previously announced B by 2030.

EPCs will also be reformed through delivery of the EPC Action Plan.

Leasehold and Freehold Reform Bill

The Leasehold and Freehold Reform Bill was introduced to Parliament in November 2023 and is likely to be subject to debate and amendment throughout the first half of 2024.

The Bill implements some of the government's longstanding proposals to make further reforms to the residential long leasehold market, including making it cheaper and easier for existing leaseholders to extend their lease or buy their freehold, while also increasing the standard lease extension term from 90 to 990 years for both houses and flats, with ground rents reduced to £0 under those leases.

Some of the qualifying conditions for tenants exercising their rights have been removed or reduced to enable more tenants to exercise their rights.

Residential service charge protections are extended to freehold owners on private estates.

Abolition or capping of ground rents under existing residential leases

The government issued a consultation paper on its proposals for abolishing or capping ground rents in December 2023. Once the preferred option is settled, it will be included in the Leasehold and Freehold Reform Bill. The government is consulting on whether there should be a transitional period.

Although the use of ground rents in new residential leases has largely been prohibited since June 2022, this had no impact on existing residential leases reserving a ground rent.

Whichever of the options in the consultation are adopted, landlords are likely to lose ground rent income. The government does not intend to compensate for this, or allow landlords to recover it through other means, such as the service charge.

Renters Reform Bill

The Bill was introduced into Parliament in May 2023, but is going through a lengthy process to become law and is in the Report stage of the House of Commons. At the moment, there is no indication of when the Bill will complete its passage through Parliament and be brought into force.

The intention of the Bill is to improve security for tenants and standards in the private rented sector. Its flagship policy is to abolish section 21 ‘no fault’ evictions and move to a simpler tenancy structure where all assured tenancies are periodic. However, it was announced in October 2023 that the abolition of section 21 would be delayed until stronger possession grounds and a new court process is in place.

Future Homes Standard and a Future Buildings Standard in England

To allow the real estate industry time to adapt, legislation to implement these standards will be introduced in 2024, with either a six or 12-month period before it comes into force in 2025, followed by a 12-month transitional period.

The aim of the standards is to decarbonise new residential and commercial buildings in England through changes to the Building Regulations and Approved Documents. The focus will be on improving heating, hot water systems, and reducing heat waste.

A Government consultation was issued in December 2023.

Government-backed Law Commission consultation on the Landlord and Tenant Act 1954

The consultation is due to be launched as soon as possible in 2024.

The security of tenure aspects of the 1954 Act will be comprehensively reviewed to ensure they are consistent with modern business leases. The aim is to create a legal framework that is widely used and supports the efficient use of space in high streets and town centres. It will take into account other legislative frameworks, including those within the government’s net zero and levelling up policies.

Law Society Code for signing and exchange of contracts

This is currently under consultation – intended for launch in 2024 – with Law Society proposing a complex code for use to agree protocols for signing and exchange of contracts. It is unlikely to be mandatory for use for commercial agreements, but is intended to be mandatory for Conveyancing Quality Scheme residential transactions.

Law Society real estate sector specific guidance on the impact of climate change

This is under development by the Law Society and intended for launch in 2024.

The guidance will set out the Law Society’s view of solicitors’ duties specifically in relation to climate change and real estate transactions. This follows the Law Society’s guide to the impact of climate change on solicitors, including in-house lawyers, issued in April 2023.

This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.

Share this page

Read the latest articles and commentary from Shoosmiths or you can explore our full insights library.  

• Log in to your account
• Sign up as individual
• Sign up as builder/agent
• Login to add properties to your shortlist

Importance of Regulatory framework and policies in Real Estate

Real Estate (Regulation and Development) Bill, 2013

In order to bring about systematic changes in the Real estate sector and make it more organised and regulated, the government decided to implement a regulatory framework along with well-defined policies. This move was also meant to substantiate the government’s agenda to bring about economic reforms through poverty alleviation and by providing affordable housing to economically weaker sections of society. Eventually after considerable debate and deliberations on the issue the Real Estate (Regulation and Development) Bill , 2013 was approved by the Union Cabinet in June, 2013. Subsequently, it was introduced in the Rajya Sabha in August, 2013.

Importance of regulations in the sector

The real estate sector at present is associated with many vices, which hopefully can be cleansed by bringing about stringent regulations and effective policies. One of the pressing needs is to rid it from the influence of black money supply. Currently, the sector contributes to about 70 per cent of the black money generated in our country. Considering the impact the sector has created in the form of contribution to the total GDP of our country as well as in employment generation, both skilled and unskilled, it is high time that the government accords the industry status to the sector. Such a move assumes more significance especially in the backdrop of the government opening up the sector to FDI , thereby benefiting developers in a large way.

Stakeholders

Implementation of regulations in the real estate sectors should be carried out in such a manner that clear roles are assigned for all the stakeholders involved, without any overlap or trespass into each other’s territory. Some of the major stakeholders in the regulatory process are:

·  The State governments by delegating the implementation of regulations through their Housing ministry. This will then be sub-allotted to different districts, municipalities and panchayats.

·  Builders and developers through a self-regulatory body like CREDAI .

·  Banks and other financial institutions through the National Housing Bank (NHB) / RBI .

·  Real estate agents and brokers through a body like National Association of Realtors (NAR) India.

·  Buyers or end users.

Role of the Government

The role of the government as a regulator is very crucial since it has to clearly define its responsibilities in providing compensation for those affected due to the government’s failures. In this regard, computerisation of government functions and networking it with other departments across States assumes utmost importance. Moreover, data should be updated regularly with easy access to the general public to various services like obtaining an Encumbrance certificate (EC) or Patta through designated service centers.

Role of Builders

Builders on their part should provide prospective buyers transparency with regards to the projects they are trying to sell. Moreover, they should ensure that proper approvals are got for their projects without misleading buyers. Those builders and developers following best practices can be rewarded by local bodies or government agencies. It is also important to impose strict penalties on those erring, and debar those who are regular offenders.

Role of NHB

The NHB should provide proper guidelines and clearly spell out their terms of finance for various housing projects. Priority should be given for low cost housing as well as economical and affordable housing projects with concessional rate of interest being granted for such projects. Besides, there should not be any hidden charges like processing fee and the loan term should be at least for five years. Moreover, various provisions should also be extended to those buying property in suburban as well as rural areas to facilitate reverse migration of those living in cities.

Role of Real Estate agents and buyers

Real estate agents and brokers should be well-qualified to pursue their profession and should always stick to the guidelines drawn by the NAR India. Professionalism and transparency are important qualities that they should pursue at all times. While the role of the buyer or end-user is minimal, it is of immense significance. They should be aware of the responsibilities of the other stakeholders so that their interests can be safeguarded.

Related Articles

The Union Budget 2024-25 has introduced several measures that can impact the real estate sector in India. The budget presents both opportunities and challenges for real estate developers. The main focus of the real estate budget 2024 is on boosting affordable housing, infrastructure development, and improving overall economic stability. The finance minister also announced significant […]

India’s construction industry is witnessing significant growth that is driven by foreign direct investment, and the country’s urbanization process. According to Union Minister Piyush Goyal, India is about to become the 3rd biggest market of construction. RERA also plays a crucial role in the development of this sector. Wondering what are the top companies in […]

Pune, no doubt, is a well-known city in India that is expanding quickly. It draws people from entire parts of the nation because of its numerous IT parks and business centers. Due to this, there is a significant demand for housing so we can see a large number of builders enter the real estate market. […]

Hyderabad regularly ranks among the top cities in India for living standards. This city has gained popularity because of the IT boom and is home to IT giants such as Microsoft and Infosys. Living in Hyderabad is fit for every lifestyle and budget. So, it’s easy to find posh as well as affordable places to […]

Trending Article

How Union Budget 2024-25 Will Affect Real Estate Developers

Decoding bhk: full form and real estate meaning, a guide to know- best direction to sleep as per vastu, transforming pune: top 10 construction companies 2024-25, latest properties - flats, flats for sale in bangalore, flats for sale in delhi, flats for sale in mumbai, flats for sale in pune, flats for sale in chennai, flats for sale in kolkata, flats for sale in hyderabad, flats for rent in bangalore, flats for rent in delhi, flats for rent in mumbai, flats for rent in pune, flats for rent in chennai, flats for rent in kolkata, flats for rent in hyderabad, projects for sale in bangalore, projects for sale in delhi, projects for sale in mumbai, projects for sale in pune, projects for sale in chennai, projects for sale in kolkata, projects for sale in hyderabad, latest properties - villas, villas for sale in bangalore, villas for sale in delhi, villas for sale in mumbai, villas for sale in pune, villas for sale in chennai, villas for sale in kolkata, villas for sale in hyderabad, villas for rent in bangalore, villas for rent in delhi, villas for rent in mumbai, villas for rent in pune, villas for rent in chennai, villas for rent in kolkata, villas for rent in hyderabad, project for sale in bangalore, project for sale in delhi, project for sale in mumbai, project for sale in pune, project for sale in chennai, project for sale in kolkata, project for sale in hyderabad, luxury properties, luxury properties in bangalore, luxury properties in delhi, luxury properties in pune, luxury properties in chennai, luxury properties in hyderabad.

Area Calculator

• Quick Links

Square Feet

Square meter, square yard, latest videos.

• Browse Cities
• Properties for Sale in Bangalore
• Properties for Rent in Bangalore
• Browse Projects in Bangalore
• Browse Localities in Bangalore
• Agent Directory for Bangalore
• CommonFloor Groups
• Post Your Requirements
• Get Mobile App
• Call Us: 080-67364545
• All India Apartment Directory

Your details has been submitted successfully.